Daily Archives: January 23, 2014

According to the Kübler-Ross model, there are five stages of grief: Denial, anger, bargaining, depression and acceptance. Jamie Dimon still seems a long way from acceptance.

The JPMorgan Chase chairman and chief executive waded into controversy again at the World Economic Forum in Davos on Thursday by saying that the $20bn legal costs the US bank has paid for alleged wrongdoing before the financial crisis were “unfair”. Read more

FT senior foreign affairs columnist Gideon Rachman reports on his meeting with Ukraine prime minister Mykola Azarov who has not been invited to the main events at Davos. They discuss the violence in Kiev and the sanctions threat.

By Jasmine Whitbread, chief executive officer of Save the Children

This years findings on the low levels of trust in government, with business faring a little better, provoked a serious debate, moderated by the FT’s Gillian Tett. Richard Edelman highlighted the risks and opportunities for business, including partnering with better-trusted NGOs. But unless companies and CEOs put purpose and responsibility at the core of their business instead of seeing this as an add-on, it will backfire on the trust front. NGOs won’t want partners who undermine trust. Being honest about challenges such as supply chain standards, or social impact of products, and transparently taking steps to fix them is the only option that will be trusted.

Japanese prime minister Shinzo Abe did not shy away from discussing the tensions with China in his speech at the World Economic Forum in Davos. Lifen Zhang, editor-in-chief of FTChinese.com, examines the reaction of Chinese delegates and journalists.

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By Toby Luckhurst

Thailand’s state of emergency is an attempt to control a country transitioning from feudal monarchy to representative democracy, writes Michael Peel.

• The Washington Post comments on a report revealing that economic mobility in the US has stagnated for 50 years, leaving those growing up poor no more likely to climb the ladder than their grandparents were.

Ukraine’s increasingly heated clashes between pro-EU activists and government forces are forging new warriors.

• The Sochi Winter Olympics have become a Putin vanity project costing at least $51bn, writes the New York Times.

• Increasing wages, a stronger currency and a dearth of workers are driving up production costs in China, leading to increasing consumer prices around the globe.

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By Joe Leahy in São Paulo

Team Brazil began its charm offensive in Davos on Thursday with Finance Minister Guido Mantega reasserting the primary role in global economic growth of the so-called Brics, which also include Russia, India, China and South Africa. Read more

Argentina’s peso suffered its biggest one-day fall since the financial crisis of 2002 on Thursday, after the central bank stopped intervening in currency markets in an effort to preserve foreign exchange reserves that have fallen by almost a third over the last year.

The peso, whose long-running decline has accelerated since November, plunged 17.5 per cent to 8.1842 pesos to the dollar, according to Bloomberg data, although a lack of liquidity made it difficult to gauge its true level.

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FT editor Lionel Barber on why Iran’s new president Hassan Rouhani wants to end Iran’s isolation and why he might be the leader that the west could do business with.

In our Reporting Back series, we ask FT foreign correspondents to tell us about a recent trip. Javier Blas, the FT’s Africa editor, tells us about the difficulties reporting from Malabo, the capital of Equatorial Guinea.

Why now? Read more

One of the big themes at the World Economic Forum in Davos is income inequality and whether growth favours the few rather than majority. Senior columnist Gillian Tett contrasts how the middle classes are being affected by the improving global economy.

Simply by coming to the World Economic Forum, President Hassan Rouhani of Iran is sending a message. He is the first Iranian president to have spoken in Davos for a decade. In a public speech at the forum and in private meetings with journalists, the president has sought to present a smiling and conciliatory face.

Certainly his personal style is a marked contrast to that of Mahmoud Ahmadi-Nejad, his predecessor. While Ahmadi-Nejad was all staring eyes and confrontation, Rouhani has a ready laugh and listens carefully to questions. Read more

Tony Abbott, Australian prime minister©Getty

The Group of 20 must stop being merely a “talkfest”, the Australian prime minister said on Thursday at Davos, committing his country’s ambition to securing concrete agreements during its chairmanship this year.

Tony Abbott sought to refocus the group, which has lost its way since the crisis, targeting financial measures, global taxation and trade and infrastructure financing.

The chairman of the G20 has significant influence in shaping the global economic debate every year, but little has been achieved at the G20 since the Korean presidency of 2010. Subsequently, France, Mexico and Russia found co-operation and meaningful agreements on global economic matters difficult to achieve.

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FTChinese.com editor-in-chief Lifen Zhang says the focus is not just on China’s economic power but its foreign relations. He also says Chinese business remains cautious about spending its cash piles.

The great and the good are gathered at Davos this week and “committed to improving the state of the world”. But what else could they have done with the money spent on entry to this exclusive event?

The average cost of Davos entry, at $20,000, buys…

Iran's President Hassan Rouhani speaks during a session at the annual meeting of the World Economic Forum (WEF) in Davos January 23, 2014©Reuters

Hassan Rouhani, the Iranian president, predicted on Thursday that his country had the potential to be one of the world’s top 10 economies in the next three decades if sanctions were lifted and economic ties normalised.

Speaking at the World Economic Forum in Davos, Mr Rouhani reiterated that developing nuclear weapons “has no place in Iran’s security strategy” and forecast that ties with Europe would be “normalised” as the interim nuclear agreement is implemented.

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Clay Christensen, the Harvard Business School professor, is an expert on “disruptive innovation” in various industries – when incumbent companies find themselves overtake by a new technology. He is now facing the possibility of being disrupted himself.

At a breakfast held by Bain & Co, Prof Christensen compared his own fate as a professor at an elite university facing competition from Massively Open Online Courses (MOOCs) with that of sailing ships in the 19th century. They were eventually replaced by engine-driven ships, but it took decades. Read more

(c) Getty Images

There was a very interesting session this morning on the “sharing economy” focused on the consequences of companies such as Airbnb, which allows people to rent their rooms out, or Zipcar, which allows people to rent rather than own cars in cities easily.

Everyone agreed that the increased efficiency and reduced redundancy was a great idea and even traditional companies liked the idea. Sir Ian Cheshire, CEO of Kingfisher, recognised that if products his companies sold were used more intensively, customers would come back more often, so the idea was not a huge threat to good traditional companies. Read more

One of the benefits – and pleasures of Davos – is the chance conversations that strike up among strangers, either in the fringes of meetings or on the shuttle buses that ferry people around town.

On Wednesday evening, I was in a shuttle bus with three other people. One of them introduced himself as Kumi Naidoo, head of Greenpeace in South Africa.

Sitting opposite him happened to be Tulsi Tanti, chairman of Suzlon, an Indian wind energy company that has an operation in South Africa. They started to talk about wind and solar energy in Africa. Read more

Courtesy of FastFT:

Iranian president Hassan Rouhani is giving a high-profile keynote address at the World Economic Forum in Davos, Switzerland on Thursday. Read more

By Jasmine Whitbread, chief executive Save the Children

The world has a habit of kicking off while Davis convenes and in past years I’ve been dismayed at the way the formal agenda carried on seemingly obliviously, for example when the so called Arab Spring began. Granted there’s been plenty of advance warning, but this year the Syria crisis is firmly on the agenda. From off the record discussions about the peace talks, to simulations of what it’s like to be a Syrian refugee, to press briefings on the need for humanitarian access. A startling combination of aid agencies and global financiers such as George Soros are collaborating to get attention to the impact on ordinary Syrian families caught up in the fighting, and call for aid to be allowed through and an end to the targeting of schools, hospitals and highly populated areas.