Davos Notebook

By Hugo Dixon
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The global economy is not as healthy as it looks. The International Monetary Fund now predicts 4.4 percent growth for 2011. But inflation has reared its ugly head across the globe, suggesting that many economies are growing faster than can be sustained without structural changes. Spurring on reform should be the main focus of the annual World Economic Forum shindig this week in Davos.

If one wants to look at the glass half full, there are things to feel positive about. The U.S. economy is growing smartly again -- the IMF predicts 3 percent this year. China and India should each grow at around 9 percent this year. Even the euro zone may be pulling itself out of crisis.

But the glass is still very much half empty, too. America is only growing so rapidly because it has engaged in loose monetary and fiscal policies. The monetary splurge has resulted in hot money spilling out across the world -- which, in turn, is driving asset and consumer price inflation and that is causing difficulties in emerging economies. The fiscal profligacy, meanwhile, will have to be reined in -- or America will suffer its own sovereign debt crisis in a few years time. The same goes for Japan, which is living on borrowed time and borrowed money.

China and India, meanwhile, are trying to curb inflation. But each is moving gingerly. Beijing is unwilling to allow the yuan to appreciate significantly -- something which would also help rebalance global trade flows. And India is maintaining negative real interest rates, despite nudging up policy rates by another 25 basis points this week.

A few things struck me from the annual survey of CEOs that PwC (yup, PricewaterhouseCoopers likes big ‘P’, little ‘w’, big ‘C’) released at Davos this year.

The most obvious was that 48 percent said they were “very confident” of growth in the next 12 months – up from 31 percent last year. Pre-crash confidence again!

But I have to say, I wondered a bit about their crystal ball when 37 percent said they planned to shift sourcing to China — with cost being the most cited reason. With inflation looming and currency moves almost certain, that isn’t necessarily a bet I’d make. There are plenty of reasons to go to China — and I’ve staked my career on it since 1979 — but cost isn’t top of my list in 2011.

CEOs are, of course, ebullient by nature.

So it’s no surprise that confidence about growth prospects is bouncing back as emerging markets continue to barrel along and even sluggish developed economies show signs of recovery.

What is, perhaps, remarkable is just how far confidence has returned. The latest survey of 1,201 company bosses by PricewaterhouseCoopers shows it is back almost to pre-crisis levels.

But how much should we trust the bouncing boardroom Tiggers? There are also plenty of Eeyores in Davos, warning about fiscal deficits, growing economic imbalances and the rising threat from inflation.

This is part of a series written by Anya Schiffrin, author of “Bad News,” and the wife of Nobel Prize Winner Joseph Stiglitz. The opinions expressed are her own.

Of Snubs and Men

The point about Davos is that it makes everyone feel wildly insecure. Billionaires and heads of state alike are all convinced that they have been given the worst hotel rooms, put on the least interesting panels and excluded from the most important events/most interesting private dinners. The genius of World Economic Founder Klaus Schwab is that he has been able to persuade hundreds of accomplished businessmen to pay thousands of dollars to attend an event which is largely based on mass humiliation and paranoia.

Wives feel sympathetic to their husbands and share their pain. But we have our own problems to cope with. After all, we are the on the bottom rung of the Davos ladder.

The theme of this year’s Davos meeting — ‘Shared Norms for the New Reality’ — has led to much debate about what this actually means.

In the video clip below, World Economic Forum founder Klaus Schwab tells Reuters Insider TV what these “new realities” are and says that the last ten years have seen a complete change in the global geopolitical structure and he hopes we are now living in a ”post-crisis” era.

This is a series written by Anya Schiffrin, author of “Bad News,” and the wife of Nobel Prize Winner Joseph Stiglitz. The opinions expressed are her own.

Preparing for Davos

This is the time of year when Davos Man — that renowned signifier of the world of international power and commerce — is preparing his presentations, having his secretary book his limo from Zurich airport to the hotel Belvedere and leafing through the stack of dinner and cocktail receptions that pile up in advance of this annual event.

My husband is a Davos Man, which makes me a Davos Wife.

I’ve lost count of how many times I have stood by my man on the buffet line and in the luggage scrum at the Zurich airport. Along with countless other wives I’ve put in my time and always felt that we are under represented. The World Economic Forum ignores us completely and only has a few activities lined up for us: cross country skiing, ice driving an Audi and the ubiquitous open sleigh ride.

Davos is not just about the global economy and corporates: there are a plenty of cultural programmes — especially on Friday — which would take the minds of CEOs and politicians away from their immediate economic concerns and invite them to the creative world.

For example, a session called “Art Walk” offers a guided introduction to contemporary Indian art, led by the curators of the art exhibition in the Congress Centre, and explores the social consciousness behind several additional artworks.

An interactive session on “Art and the Natural World” focuses on how artists inspire others to cherish and respect the natural world. Participants are also invited to a private “spin painting” session at lunchtime with Damien Hirst as part of a philanthropic roundtable.

Davos is all about which colour your badge is – are you white, orange, purple, green or gray? Here’s what they all mean and, more importantly, what they get you into.

White badge: access all areas – those who get white badges range from corporate executives and government officials to media leaders (this year from Reuters: myself and my colleagues Paul Taylor and Lisa Jucca). Holders of white badges can attend all sessions, all lunches, dinners and night-caps, provided they sign up beforehand. Lunches are mostly held in hotels where chefs sharpen their knives to serve sizzling three-course meals to participants. Sessions open only to white badges are off-the record.

Orange badge: entry to limited areas of Congress Hall and hotels as media participants. You can get quite a lot of things done with orange badges but access is more limited compared with white badges.

By Michael B. McCallister, chairman and CEO of Humana, and chairman of the World Economic Forum’s Workplace Wellness Alliance.

The World Economic Forum meeting this week in Davos, Switzerland, will explore ways to improve our citizenry’s health.

Increasingly, WEF participants are focusing on workplace wellbeing. Several major corporations, including Humana have created the Workplace Wellness Alliance to better understand the link between employee wellness and productivity. Healthy work environments are essential to a business’s bottom line.

The Davos meeting organisers have made a huge push into social media this year. From interviews on Facebook to geo-location services using Foursquare, it’s an impressive use of social media tools to bring the closed-shop that is the WEF to the masses.

In the video clip below, Reuters correspondent and Davos veteran Ben Hirschler shares his thoughts on the impact this will have on this year’s WEF.

“They’ve made a big effort to show their involvement with the outside world,” he says. “The question is… to what extent is this just PR eye-wash and to what extent is it something serious?”