I’m in Davos this week to talk about an issue that I’m especially passionate about: helping mothers and children in the developing world.
Research shows that helping women stay healthy and achieve financial security has an amazing ripple effect. A healthy woman is more likely to give birth to a healthy child. She can earn money to feed her family, send her kids to school and buy medicine when they’re sick. When women thrive, their families thrive and their entire community prospers.
Earlier this week, I visited Benin and Malawi to see some of the great progress the two countries are making. In Benin I had the honour of travelling with Carla Bruni-Sarkozy, the first lady of France and an amazing advocate for women and children. We went to the village of Dangbo, where we visited a hospital that provides a full range of free health services for pregnant women. They have a fantastic program that integrates these services with HIV testing, counselling and treatment. We talked to several women there who had come in for prenatal care and then decided to get tested for HIV. If they test positive, they can immediately get drugs that will help keep them from passing the virus on to their babies. Read more
It is snowing in Davos. I don’t know why that should surprise me. It is a ski resort, after all. The locals – who apparently do not simply disappear when the World Economic Forum leaves town – are pleased, since it means there will be plenty of snow on the slopes for the school half-term. But for some delegates, the snow seems to be a bit of a downer – adding to the discomfort of Davos. I saw one South African delegate struggling into his heavy coat and gloves and moaning, “this is torture.” The Chinese, however, are pleased. A senior Chinese official claims that there is an old Chinese saying that – “Heavy snow means there will be a good harvest.” This was slightly more interesting than his claim that the nations of the world “have common but differentiated responsibilities” over climate change.
I have spent much of the day in meetings of the Davos “International Media Council” which brings together a group of journalists from all over the world for off-the-record briefings with important people. This is all very flattering – but also slightly frustrating, since I am not allowed to report what they say. Read more
The hotel vestibules were buzzing as I arrived – seems President Sarkozy pulled no punches in his address yesterday and people are up for ‘rethinking and redesigning’. But, I asked my dinner companions, to what extent? If you were going to redesign a global economic system right now, would you tolerate design flaws that leave 70m kids out of school?
But what grabs people’s attention is the Tiger Woods back-story and how well his erstwhile corporate sponsors handled the PR crisis – must say I never expected that as a Davos theme. Read more
By Chris Giles, the FT’s economics editor
I am at a so-so lunch discussing the prospects for long-term economic growth and have just heard the best comment on global imbalances and the worst suggestion for international organisations. Both came from Angel Gurria, secretary general of the OECD. Read more
One of the big topics of conversation here in Davos is the economy. In panel discussions and hallway conversations, people are talking about the long-term effects of the recession of 2009. While it’s true that we will see lingering unemployment and huge government deficits for quite some time, I think the big story is actually much more positive. I believe we can make amazing progress in the years ahead to improve people’s lives around the world. The key is to keep investing in innovation. It is what makes the difference between a bleak future and a bright one.
During the past two centuries, a huge number of innovations have fundamentally changed the human condition-more than doubling our life span and giving us cheap energy and more food. If we project what the world will be like ten years from now without continuing innovation in health, energy, or food, the picture is quite dark. Health costs for the rich will keep escalating, forcing tough trade-offs, and the poor will be stuck in the bad situation they are in today. We will have to increase the price of energy to reduce consumption, and the poor will suffer from both this higher cost and the effects of climate change. We will have big food shortages because we won’t have enough land to feed the world’s growing population. Read more
Most editors of news organisations spend a lot of time worrying about their business models these days, so it is unusual to talk to one who has no concerns about his.
On June 14th, Matthew Winkler, editor-in-chief of Bloomberg News, will celebrate the 20th anniversary of the first story going out over its terminals. The story was about corporate bonds and was written by a journalist who is still employed at Bloomberg. Read more
When a French president praises capitalism an Englishman is conditioned to smell un rat, indeed a whole nest of them. And Sarkozy did not disappoint, in his grand opening address at Davos.
He offered three interpretations of the causes of the crisis: global imbalances, short-termism, and bankers being tempted into speculation and away from real banking. Arguably they point to quite different solutions, but they were all grist to his moulin. Read more
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. Read more
I spent my day being interviewed by other media organisations and preparing my Friday column. So I did not attend any sessions. I rely on the excellent reporting of my colleagues to tell me what is happening in Davos, just like all the other readers of the FT and ft.com. But I have still managed to learn something from chance encounters here.
So what have I learned so far?
First, my criticism of the “Volcker rule” in banking, subject of my column this morning, is controversial. The desire of many non-bankers to cut the bankers down to size is, even here, quite noticeable. Have I gone soft on bankers? I do hope not. But this new addition to the already pressing weight of uncertainty worries me greatly. Read more
By Chris Giles, the FT’s economics editor
I have a terrible problem when I listen to chief executives talking about what they do for the world:how they give people livelihoods; how their fine management has given thousands of people jobs; how families would be destitute were it not for them. My problem is that I thought slavery had ended – quite some time ago. Read more
It was a sprightly and cheerful George Soros who addressed journalists at a lunch today in Davos on the aftermath of the financial crisis.
The crisis has been good for the credibility of Mr Soros and he drew a notable group of editors to listen to his recommendations, including John Micklethwait of The Economist, James Harding of The Times, Jacob Weisberg of Slate and Marcus Brauchli of The Washington Post. Read more
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. Read more
By Gideon Rachman, the FT’s chief foreign affairs columnist
Jesus drove the money-changers out of the temple. Now the World Economic Forum has driven the wine-tasters out of Davos. In previous years, one of the highlights of the forum was a small but spectacular tasting of fine wines. But last year Klaus Schwab, the forum’s mastermind, decided that guzzling first-growth clarets was an inappropriate way of celebrating the global economic meltdown - and the wine-tasting was cancelled. We all hoped that this was a temporary abberation, but apparently not. The new Puritanism is here to stay – Davos wine-tastings are off the menu until further notice. Read more
By Chris Giles, the FT’s economics editor
One of the joys of the World Economic Forum is the occasional real-time deflation of egos that you can witness. I am sitting in a session on asset price bubbles where one private sector speaker insisted that you can’t spot bubbles and you should not. I can’t name him because Chatham House rules apply. Then one econmics professor (not hard to guess who) and a prominent regulator, went through all the reasons why you can spot bubbles, and should think about using tools, such as capital requirements or loan to value ratios to limit the size of bubble. Back came a rather deflated first speaker, completely contradicting his earlier point, and arguing that there are some bubbles that can be spotted and need to be addressed with credit restrictions. Did he realsie his views had reversed? Sadly, I doubt it, but his ego was not what it was.
It can be hard to find an actual disagreement at Davos, given the social effects of sticking a lot of people in workshops and asking them to flesh out the future of the world convivially.
So it was encouraging (for a journalist) to come across a clear and important divide in the first session I attended this morning, on internet social networks. Read more
By Chris Giles, FT economics editor
Let’s face it. The Davos mood at the World Economic Forum is almost always wrong. In 2007 it was euphoric; 2008 was consumed by a fear of inflation; 2009 was apocalyptic. What about 2010? Read more
As you climb the mountain to Davos (the train via Landquart is my demotic route of choice – eschewing the expensive corporate Audis) you tend to think you know what the Forum’s financial talking points will be. This year the names Bernanke and Volcker will be on every lip – at least until the Senate vote on the former is known. If the answer is no, which seems less likely after the President’s weekend on the White House switchboard, there will be no other topic of conversation. The markets are likely to react badly, whoever is proposed to replace him, and whatever participants think of his pre-crisis record.
There is no simple yes/no answer to the Volcker question. His Rule remains opaque. In a discussion with a private equity panjandrum today we concluded very firmly that it would either not make much difference, or would change everything, taking the markets back to pre-Big Bang days, but we couldn’t decide which. And the two sentence summary put out in Washington last week doesn’t help a lot. Read more
This blog is about to change form for a week.
I’m in Davos with a group of FT writers including Gideon Rachman and Gillian Tett to cover the annual World Economic Forum. You will be able to read my posts about the event here along with those of other FT journalists and our guest bloggers. Read more
I note that Bill Clinton, whom I warned last year was in danger of tarnishing his Davos brand by being nasty about Barack Obama on the US campaign trial, seems to have bounced back.
The absence of any senior figures from the US administration at the World Economic Forum this year has left Mr Clinton to re-occupy his place as the well-loved philanthropist and former president who represents the acceptable – even loveable – face of the US in Europe. Read more
The latest recipient of a bail-out seems to be Matthew Bishop, the author with Michael Green, of Philanthrocapitalism: How the Rich Can Save the World, a book about the new wave of philanthropy by business leaders and billionaires.
Matthew, who works for The Economist, had the misfortune to publish his book last August, at precisely the moment when the financial bubble popped and the notion that the such people were benefactors from whom traditional foundations and governments should learn lost its appeal. Read more