The Davos consensus spoke up loud and clear on the first day of the World Economic Forum. As I suspected, the darkness of the here-and-now permeated the Congress Center. After I laid out my bearish prognosis in the opening session – an unprecedentedly anaemic growth rate in world GDP of just 2.5% for the next three years – there were those who actually called me an optimist. The indomitable Martin Wolf, whose platform I share temporarily in penning these missives, argued that I was far too sanguine for a world that was already in a “proto-Depression” – whatever that means.
Anything is possible, of course. But I think it is important to resist the bait of oneupmanship and put this prognosis in perspective.
My good friend, Stephen Roach, Asia chairman of Morgan Stanley, disappointed me at the economic outlook session this morning. I expected him to be even more bearish than usual.It says something about the change in global mood that his forecast – a global recession this year followed by 2.5 per cent annual growth over the subsequent three years – looks almost bullish. The reality might be even worse, alas.
I chided him and his fellow panellists for their apparent complacency about what I called a “proto-depression”. What did I mean by this?
As I make my way this week to Davos via Riyadh and Zurich, it becomes clear that the chill in the global economy has reached the deserts of Saudi Arabia. I attend a panel at the Saudi Global Competitiveness Forum where each speaker outdoes the next in headlining the many risks of the current downturn and predicting the gravest of consequences.’ Godzilla’ seems to have replaced ‘Goldilocks’ as the defining metaphor for our world markets.
When the going gets tough, entrepreneurs build new companies. Last night, amid a backdrop of dinner discussions largely focused on ensuring that no one here had any doubt that the world was in bad shape, a small beacon of optimism was unveiled. The event was the dinner honouring the 2009 class of Technology Pioneers.
This year the World Economic Forum selected 34 companies as Tech Pioneers, from among several hundred applicants. Ten years since its inception, the Technology Pioneers programme selects exceptionally innovative companies in three major areas: biotechnology/health, energy/environmental technology, and information technology.