Sessions with titles like “Reconfiguring the Global Financial Regulatory Architecture” are not always the most difficult to get into at Davos. This year is different. As the second G20 summit approaches there is a sense that decisions may be made which could significantly alter the environment within which financial firms work. So the topic seizes the attention here, especially of those who worry they may be brought into the net, like hedge funds and private equity firms. The private sector is not, however, defending the status quo. There is a widespread recognition that the system, especially in the US, but also in the EU, has not done what it says on the tin. And I detect an emerging consensus around three points.
Far too crowded. Probably 500 people over the top. Last year 2000 was heavy, 2600 is too many. Some can’t attend sessions even having tried to book online from home. Participant numbers should be reduced.
Security is also very tight, aggravated by the crush. There are heavy lines and queuing, especially early in the morning. On the other hand, this is not surprising with 40 country leaders present, many with large convoys.
On this, my fourth visit to Davos, I have been curious to see if the recession has transformed the attitudes of the captains of world capitalism who come here to network. My past World Economic Forums have all been dominated by a smug, self congratulatory mood of corporate success and boundless optimism for wealth creation in the future.
True, there have been attempts by the organisers to stimulate thoughtfulness on environmental questions and some fashionable social causes like the need for cheap generic drugs against aids.
Some of the most interesting meetings at Davos take place over dinner. These happen away from the Congress Centre, in the hotels scattered around this picturesque town. They are small informal events, usually with about 30 guests and three to five speakers with topics ranging from The Future of Entertainment and Preparing for a Pandemic to Leadership Lessons from Shakespeare’s Macbeth.
Often the measure of a meeting is what is not said or spoken. And there is one very significant issue lurking in the current economic crisis that I doubt will be addressed at the World Economic Forum in Davos.
That issue is whether the public policy response to the crisis will take into account the need to bring about a fundamental change in the behaviour of the American consumer, most notably the problem of excessive consumption (or insufficient savings).
Boris Johnson may well have sung for his supper, but not as beautifully as Bryn Terfel, who also told more modern jokes.
Wen Jiabao did not have them rolling in the aisles, exactly, but it was an assured performance. It’s the year of the Ox, as we know, and associated with persistence, sacrifice and plenty. The second seems to be well in hand all over the globe. We might say that governments are persistent in their attempts to stimulate their flagging economies. But “plenty” is associated with deficits more than anything else these days, which was not quite what he had in mind, I think.
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.