Davos Notebook

from Breakingviews:

Global economy not as healthy as it looks

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.

CEOs hoping that everything comes up roses

CHINA-VALENTINE'S/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.

Tigger bounces back in the boardroom

PWC_chart for blogCEOs 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.

Jealous Davos Mistresses


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.

Desperate Davos Wives


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: Can social media make a difference?

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?”

Davos fails to grab the attention of angry protesters

The days when anti-capitalist protesters could rampage through Switzerland’s financial capital Zurich in rage at the Davos talkfest 100 miles (150 km) to the east are long gone.

A couple of hundred anti-globalisation activists managed to rally in the nearby town of St. Gallen on Saturday against the annual meeting of the World Economic Forum opening this week. Braving a vicious north-east wind, they assembled near the station then marched peacefully through the centre of town, barely disrupting the good burghers as they went about their weekend shopping. At the front of the demo a large red banner proclaimed: “Take the future from the capitalists – Smash the WEF”.

The mostly young demonstrators pulled a cart festooned with anti-capitalist slogans, and beat drums and lit crackers to keep time. The march went off peacefully.

Why “generation next” matters at Davos

trevor dougherty lowres– Trevor Dougherty is a student and activist and will attend the World Economic Forum (WEF) in Davos as a representative of the Global Changemakers. He’s also the youngest American ever to attend the Davos meeting. —

Most of the sessions at the WEF’s annual conference in Davos will focus on the future, and how it can be bettered, so, naturally, a topic of discussion is the “next generation.” How will their consumption patterns change? How will they contribute to society? How will they use technology? How will they lead?

Among the Davos crowd, better known for its executives and politicians, is a group of people who can offer real insight to these questions. They possess a profound knowledge of “kids these days,” because, drum roll please, that is exactly what they are. Meet the British Council’s Global Changemakers, five teenagers selected from five different countries to represent young people at the World Economic Forum. My name is Trevor, and I am one of them.

from Felix Salmon:

Top tips from Davos spouses

Just as the most interesting sessions at Davos are the ones you know the least about beforehand, the most interesting people tend to turn out to be the ones you've never heard of. If you do happen to find yourself talking to Bill Clinton or Bono or Dmitry Medvedev, you'll probably be part of a large crowd of people and the conversation is likely to be superficial at best. On the other hand, if you just sit down on a random couch in the Congress Center, there's a really good chance that sitting next to you will be a fascinating and very useful person to know.

And of all the attendees at Davos, the very best to get to know are often the spouses. There's a smattering of Davos Deville types, of course, swanning down the Promenade in their fur coats, but many of the spouses are very smart, very engaged, very interesting in their own right -- and tend to feel a bit left out, given the rigid Davos class system. Log in to the exclusive in-house social network, for instance, and they don't even turn up.

Many Davos spouses have been going for years, and know the ways of the town and the conference very well. They also tend to be able to keep things in perspective, and realize when it makes sense to blow off a session on the state of global manufacturing to enjoy the blessedly empty slopes.

Davos: If your name’s not down, you’re not getting in

With only a week to go until kick-off, the organisers of the 41st World Economic Forum (WEF) annual meeting in Davos-Klosters, Switzerland, have just announced the programme based around this year’s theme: ‘Shared Norms for the New Reality’.

So who will be in the snowy Alpine resort of Davos to discuss this ‘new reality’ and, we hope, lead the way in putting forward solutions to the most pressing global risks of the day?

A popular ski resort at other times of the year, Davos is a closed shop to outsiders during the WEF. The barbed-wire barriers, endless security checks and snipers on rooftops are a reminder that, among the 2,500 politicians, businessmen and representatives from media, charitable organizations and religious groups, there are some pretty important people.