Prospects for peace in Syria
World powers are gathering in Switzerland in an attempt to find a diplomatic solution to Syria’s three-year civil war, which has cost more than 130,000 lives drawn in regional powers to fight a proxy sectarian war. The conference nearly fell apart before it began when the UN invited Iran to participate. But what chance of success remains? Roula Khalaf, foreign editor, and Borzou Daragahi, Middle East correspondent, join Ben Hall to discuss.
Having heard prime minister Shinzo Abe twice already today I can only concur with Gideon Rachman’s assessment that he does not seem to regard conflict with China as unthinkable.
Maybe, that is realistic and maybe such realism will protect the world from such a calamity. But it frightens the wits out of me. I was particularly struck by the almost casual way in which Mr Abe cited the World War I precedent. I wish the US would step more decisively on this nonsense.
I asked a question about the “third arrow” of Abenomics, which is structural reform. In this I indicated profound scepticism about the chances that this programme could generate sustainable growth of 2 per cent a year in an advanced economy with a shrinking labour force. This would imply labour productivity growth of 2.5 per cent a year – far faster than in any big high-income country since 2000. This is not inconceivable, since Japan’s labour productivity in services is relatively low. But it is a big stretch and would require large social and economic changes. Read more
(c) World Economic Forum
By Martin Arnold, Banking Editor
Two of the world’s most senior bankers sought to rebuff the charges of their critics by arguing the industry had become safer since the financial crisis thanks to higher capital levels, lower leverage, reformed pay structures and a tougher regulatory scrutiny.
Douglas Flint, chairman of HSBC, said of the financial crisis: “Nobody in that room [the HSBC boardroom] ever wants to take the risk of ever being in that situation again.”
Speaking on a panel at the World Economic Forum in Davos, he added that the HSBC board was spending half to two-thirds of its time “dealing with the aftermath of the crisis”.
Antony Jenkins, chief executive of Barclays, said: “Where the system failed and where institutions failed within that was where they mis-priced risk.” Arguing that banks had increased the levels of capital they held and reduced their leverage, he added that “changes
in conduct” had also reduced the chances of the 2008 crisis being repeated. Read more
FT editor Lionel Barber reports on a positive mood on the first day of the World Economic Forum in Davos, and says the big talking points will be China, growth and political deadlock in the US, and optimism over Africa.
James Gorman, the chief executive of Morgan Stanley, neatly summarised his view of US authorities’ so-called “princeling” probe, into whether rival bank JPMorgan sought to win deals in China by hiring the sons and daughters of the country’s elite.
“There are a lot of talented people that come from those families,” Mr Gorman told CNBC, in a television interview on the sidelines of the World Economic Forum in Davos, Switzerland. Full story on FastFT
(c) Getty Images
Here at Davos, I’ve just had the opportunity to moderate a discussion between the Japanese prime minister, Shinzo Abe, and a group of international journalists. I asked Mr Abe whether a war between China and Japan was “conceivable”.
Interestingly, he did not take the chance to say that any such conflict was out of the question. In fact, Mr Abe explicitly compared the tensions between China and Japan now to the rivalry between Britain and Germany in the years before the first world war, remarking that it was a “similar situation”.
The comparison, he explained, lies in the fact that Britain and Germany – like China and Japan – had a strong trading relationship. But in 1914, this had not prevented strategic tensions leading to the outbreak of conflict.
Naturally enough, Mr Abe also made it clear that he would regard any “inadvertent” conflict as a disaster – and he repeated his call for the opening of a military-to-military communication channel between China and Japan. Read more
By John Gapper
An efficient and functioning internet can boost GDP, partly by enabling small and medium-sized companies to sell and source raw materials more widely, according to a Boston Consulting Group report unveiled at Davos. Read more
By Gillian Tett
Just in case anyone was starting to feel too relaxed or cheerful about the outlook for the Eurozone, Axel Weber, UBS chairman, delivered a sober slap-down today.
Axel Weber (c) World Economic Forum
In a downbeat session with business leaders and academics about the future of Europe, Weber pointed out that the current pace of growth was not nearly fast enough to really dent unemployment or set the region on a sustainable growth path. And in practical terms, that meant Europe faced at least two risks this year.
One was the danger that European elections could show a growing mood of political protest – and volatility.
Secondly, the ECB’s stress tests could spark new market alarm about the banks – which would impact sovereigns too. Read more
FT senior columnist Gillian Tett reports on why business and governments are at loggerheads over where growth will come from, with business saying it is not ready to invest, yet confidence in governments is low.
Chris Giles, economics editor, finds a mood of optimism among economic experts on the first day of the World Economic Forum in Davos, but concerns remain over the strength of the recovery.
The usual pre-Davos flurry of surveys reveals delegates should be worrying about trust in business more than they seem to be. While public trust in government institutions is dwindling, trust in businesses themselves seems to be gradually recovering. But businesses risk taking the recovery in trust for granted.
The latest edition of the Edelman Trust Barometer presents this pretty starkly. As Richard Edelman blogged this week:
“[The barometer] shows the largest ever gap between trust in business and government since we began this study in 2001. This can be attributed to a continued destruction of trust in government that began in 2011, and a steady rise in belief in business since its nadir in 2008…. Business may interpret this as the moment to push for deregulation, as it did a decade ago. That would be a monumental error in judgment. Our research indicates a reputation hangover for business from the Great Recession of 2008.”
The World Economic Forum itself has not ignored the trust issue. Critics of the event ram their distrust of the “Davos elite” down the forum’s throat every year and the WEF is running a “leadership, trust and performance equation project” aimed at understanding and bridging the gap between public and business understanding of trust (I’m the moderator of a private discussion of this theme at the Forum on Thursday). Read more
By Martin Arnold, Banking Editor, in Davos
The first of many debates about China at Davos this year made an unexpectedly hostile debut this morning as Zhang Xin, head of Beijing’s biggest property developer Soho, was put on the spot over the country’s crackdown on corruption.
“Your industry is one of the most corrupt in China,” said moderator Andrew Browne, China editor of the Wall Street Journal, as he asked Ms Zhang to share her views on the issue. Read more
The West is forever petrified of Chinese and Indian growth that might destroy advanced economy standards of living. Politicians fuel that fear. In the UK, David Cameron, prime minister, talks repeatedly about a “global race” and the need for sacrifices so Britain can succeed in that race. His predecessor Gordon Brown used to repeat one of his favourite statistics that there were 4 million graduates a year coming out of China and India and only 250,000 in the UK.
In a panel on the world of work, business leaders with experience in working in both advanced and emerging markets had a very different story to tell. There was a huge shortage of skilled workers, they all agreed, and a surfeit of unskilled. Emerging economies education systems were not up to scratch and there was still a need for ex pats and a lot of investment in basic education in emerging markets. Read more
And here are the other talking points from the first morning tech-focused sessions:
1. “Internet of things” worth $19tn
John Chambers, the chief executive of Cisco, has just put a number on the “Internet of Things” – and it’s big.
In fact, it’s very big – a whopping $19tn – more on FastFT
2. Management editor Andrew Hill reports that Marc Benioff of Salesforce.com has set the pace – literally – by pointing out he lost 30lb using the Fitbit personal health tracker. When he stopped working out last week – because he had a cold – his “Fitbit friend” Michael Dell called him to check he was OK.
“There’s a fitness challenge at Davos this year – they’re handing out fitness bands to monitor delegates’ patterns of sleep and exercise. I suspect it may reveal a grisly picture of lost sleep, hangovers and canape overload.”
(c) World Economic Forum
It’s day one at Davos, with business and political leaders, gathered in the Swiss resort for the first sessions. Here is what you should read today before the action starts:
1. The FT’s economics editor Chris Giles lays out the message economy
experts attending the forum will be sending. That is: We may have
eliminated the horrors but we’re still fragile – ie, the eurozone,
falling productivity and widening inequality within countries. Here is the
FT’s editor Lionel Barber and here Martin Wolf on what to expect from
2. The FT’s Gideon Rachman provided some lighthearted bedtime reading on
dogs, Russian pianists and extreme chance meetings.
3. The gender gap is just as evident at Davos as it is in many other
places across the business world. See our interactive to view just how big
that gap is. Read more