Business blog

Focus on the first day, amongst other things, is on the high levels of unemployment and consequent risk of more protectionism. As unemployment is already at a very high level – an average of 10 per cent in most western economies and youth unemployment at least double that rate – social stability and long-term social damage are major issues.

As a jobless recovery kicks in, particularly in mature economies, the problem is likely to worsen and, as a result, protectionism will rear its head even more.

Organisations such as the ILO and WTO are pushing for more social programmes to cushion structural unemployment. Business generally argues that Western European economies, in particular, are not flexible enough. In America, although structural change is equally difficult and unpleasant, there is a mobility and flexibility that is absent from Western Europe, where higher taxation and social charges make plant location and similar investment decisions more difficult.

No doubt, the Global Competitiveness Forum in Riyadh was an excellent curtain raiser for Davos. The agenda for the latter seems set – management and timing of the withdrawal of the short-term economic stimulus, cutting and funding deficits in the longer-term, concern about co-operation over regulation, following President Obama’s recent unilateral moves, Paul Volcker’s new role, G2 or G7 or G8 or G20, American/Chinese relations (tyres and Google), protectionism, the environment, Palestine, Iran, Afghanistan and terrorism, energy policy, some cathartic banker-bashing (why not have some symmetrical regulator-bashing too!) and last, but most important, support for the Haitian tragedy.

Don’t get the feeling that much of the Obama administration will be present. Nor the presidents or prime ministers from Russia or Turkey or Japan, mostly as last year. No prime minister Brown, but UK shadow leader David Cameron will be there and the British lunch on Friday will be the first ever in six to host a conservative leader. There is, however, great representation from Latin America – Lula, Calderon and Uribe. In the developed world, President Sarkozy is left centre stage, for the opening big session with Professor Schwab.

Snow yesterday threatened to level things, but now it’s a beautiful, but cold day. The media star, so far, seems to be ‘Dr Doom’, Nouriel Roubini, with his pronouncements on economic performance. His consulting practice must be going gangbusters. The biggest concern seems to be the direction of the US. Last Thursday’s announcements and policy changes seemed to be un-coordinated and tactical. And who was in control – Volcker, Geithner or Summers? Everyone is looking for coherence in this evening’s State of the Union speech – which is a long way away from Davos! We’re in the wrong place!

The unexpected story, so far? Why did the head of security for Davos allegedly commit suicide?