Daily Archives: January 24, 2014

I had hoped that my 25th trip to Davos would be marked by the award of a silver fondu set, at the very least. No such luck. The only prize is to be asked yet again to work on “reshaping the world”, this year’s theme.

That degree of repeat offending suggests either an astonishing inability to learn from experience, or some residual belief that the exercise is indeed worthwhile. Whether the state of the world has been improved over the 44 years the World Economic Forum has existed is a moot point: it depends on the hand you have been dealt. Chinese princelings, whether on the strength at JP Morgan or not, would no doubt tick the box; Syrian refugees, whose plight is firmly on this year’s agenda, would beg to differ. Read more

There are many party games to play at Davos. Some work better than others. The fashion now, perhaps driven by the success of TED conferences, is for strictly time-limited interventions, as short as possible. One economic historian was asked to summarise the development of the global monetary system over the last 150 years, and forecast the future of the dollar, the renminbi and the euro out to 2030 – all in three minutes. Actually he made a more than decent stab at it, but others, who may well have something interesting to say, have barely cleared their throats before the bar comes down.

One innovation in the last few years which does work well is the so-called Ideaslab. I approached this with trepidation when asked to lead one a couple of years ago. Again, each presentation must be three minutes, no more, no less, and is accompanied by a slideshow of related images – not charts and graphs – which the speaker cannot control in any way. It’s a Swiss version of the BBC radio panel game “Just a Minute”: no hesitation, deviation or repetition allowed. Read more

I arrived in VIP-full Davos with one prediction in mind: 2014 will be the year the world returns to normality or at least the semblance of normality with the tapered exit from quantitative easing.

After three days at high altitude, the prediction is intact and I have five other takeaways. Read more

Bono has joined forces with Bank of America at the World Economic Forum to announce an initiative to put millions of dollars into tackling Aids. Senior FT columnist Gillian Tett on why she expects to see more companies embark on such initiatives to improve tarnished images.

At a debate in Davos Joseph Nye, the American political scientist, asked the Chinese foreign minister, Wang Yi, what he felt about the comments of the Japanese prime minister Shinzo Abe on Sino-Japanese relations earlier in the week and especially the parallel Mr Abe drew between the pre-world war one relationships in Europe and those between China and Japan today.

These were Mr Yang’s key points in reply: Read more

On the third day of the World Economic Forum in Davos, Lionel Barber, FT editor, reflects on how the Argentine peso’s fall has impacted the consensus at the meeting that the world is returning to normality.

One of the World Economic Forum annual meeting’s core themes this week has been climate change, something those of us arriving in Switzerland from Australia have certainly experienced. Here in Davos you’re lucky to get out of single figures during the day, and night-time temperatures plummet below freezing. Last week, Cost Centre #2, who is staying on in Australia for part of his gap year, posted a picture on Facebook with the caption, “I am not built for 46C.”

Nor am I, so planning my wardrobe was especially difficult. I made sure to change planes in London, specifically to collect my fur coat and walking boots, but what else to wear? My guidance to other female delegates has always been to pack that staple of every working woman’s wardrobe: the black trouser suit. And especially if you are going to be on a platform during one of the debates.

FT economics editor Chris Giles examines statements by Bank of England governor Mark Carney, that interest rates are likely to remain below historical norms and looks at possible changes to “forward guidance” policy.

There may be clouds over emerging markets and plenty of blue-sky talk coming out of the World Economic Forum in Davos. But just check how clear the airspace above the Swiss town looks as delegates break for lunch.

Matthieu Ricard (c) WEF

I’ve been to happier meetings on glummer subjects than the Davos dinner I joined on Thursday about “The Importance of Happiness” .

Perhaps it was the presence of a trio of dismal scientists as discussion leaders – Harvard’s Michael Porter, Columbia’s Jeff Sachs and Nobel laureate Joseph Stiglitz – that cast a pall. At any rate, their thoughts on how to measure happiness did little to lighten the mood.

There was one great burst of wisdom, however, from Matthieu Ricard, the French-born geneticist turned Buddhist monk, who brought some much-needed colour to the debate. Could it be, one delegate asked, that the more you know, the less contented you are? Read more

The Bank of England governor also signalled that the central bank will drop the simple link between interest rates and the unemployment rate in a speech to British business leaders at the World Economic Forum in Davos.

In his address to the World Economic Forum, the prime minister was his
fluent self. But there was also an obvious tension between his embrace of
a globalised and open UK and his determination to curb immigration.

This led to a very pointed question from a Swedish MEP on precisely this
contradiction. Mr Cameron defended himself by pointing to the case for
curbing access of immigrants from the EU to welfare benefits and the need
to recognise the challenges created by the huge income gaps between some of
the new members and the old members. Read more

For a third year I attended a private dinner at which we laid notional wagers on the future.

This time the main question was not the future of the euro. Apparently, the future of the euro is now regarded as so assured that it is not even worth betting against it. I suspect this is too complacent. We did bet last year on Brexit (British exit from the EU), but that was by 2018. So this issue was not raised again this year.

Here are this year’s, rather less significant, bets, with the mean probabilities out of 100 per cent of the participants and my own probabilities below. Read more

(c) WEF

Every year, there is debate at Davos about what is hot – and what is decidedly not. This year, the emerging markets are definitely in the second camp.

Never mind the fact that the streets of Davos are full of cheery posters proclaiming the joys of Malaysia, India or Brazil – or that Nigerian food was being served to Davos delegates at lunch (complete with snail stew.) Also ignore the determinedly upbeat messages emanating from a host of officials from the BRICs nations.

Behind the chirpy smiles, a new mood of anxiety is stalking the emerging markets delegations, amplified by the recent dramas around Argentina. And that marks a stark contrast to recent years, when the emerging markets were regarded as the new saviours of global growth – and their leaders strutted around the Davos corridors with pride. Read more

Eric Schmidt (c) Getty Images

On Thursday Eric Schmidt gave a fascinating talk on technological innovation, in which he warned that broad range of jobs that once seemed beyond the reach of automation are in danger of being wiped out by technological advances.

I raised two questions to neither of which in my view did I receive a good answer.

First, we see IT everywhere, except in the productivity statistics. It is really quite hard to reconcile the idea of a dramatic technology revolution with stagnant or near-stagnant productivity in high-income countries. Read more

UK Chancellor George Osborne and former US Treasury Secretary Lawrence Summers have just locked horns at Davos on the UK’s economic recovery. Whilst Summers didn’t directly use the words “you blew it” as some reported, FT reporters on the ground say that was the clear sentiment.

 Read more

George Osborne has just bolstered his support of Bank of England governor Mark Carney’s somewhat embattled “forward guidance” of linking interest rates to the UK’s unemployment rate – saying that he “completely rejects” the suggestion that the policy has been a failure.

In a debate with a panel of central banking heavyweights in Davos, Switzerland, Mr Osborne fairly huffily slapped backed suggestions that Mr Carney’s flagship move at the helm of the BoE has not worked.

Mykola Azarov (c) Getty Images

How humiliating for a political leader to be in Davos – but to be kept away from the Congress Centre itself. That is the fate that has befallen Mykola Azarov, the prime minister of Ukraine, who is in Davos – and was hoping to speak at the forum. Unfortunately, for him, his government’s reputation has now sunk so low that Mr Azarov did not make it inside the security perimeter.

Instead, he is holed up at the Hotel National, about a mile down the road. Among the visitors he received yesterday were Lakshmi Mittal, the steel magnate; Jorma Ollila, the chairman of Shell – and me.

When I asked him whether he regretted being unable to speak at the WEF, Mr Azarov replied stiffly – “The forum had a unique opportunity to listen to the head of government of Ukraine, to get a wider point of view – it’s hard to tell who lost more in this affair.” And why was he in Davos, anyway – given the chaos back home? The Azarov spin was that his presence shows that the government of Ukraine continues to function normally. Read more

European equities are flat at Friday’s open, with a dearth of data meaning speeches in Davos later today are more likely to move the markets.

The FTSE 100 is trading level at 6,771, as is the Xetra DAX in Frankfurt at 9,622. The CAC 40 in Paris is up nearly 0.2 per cent though, at 4,287.

By Lindsay Whipp

Some solid newsworthy talk at the world’s most-expensive talkfest hit our
screens yesterday.

Not even a year after Mark Carney introduced forward guidance to the Bank of England, he signalled at Davos yesterday it might already have had its day.

Eric Schmidt, executive chairman of Google, warned that a broad range of jobs once believed to be beyond the reach of automation were under threat.

But as is always the case at the World Economic Forum, there are vital issues that should be exercising jaws, but are garnering very little attention. Gillian Tett points out that debt is one of themRead more