Economic turmoil dominates Davos forum

Worsening economic turmoil dominated talks and thoughts as world leaders and hundreds of top financial and corporate chiefs gathered on Wednesday for the annual Davos forum.

The avalanche of bad news in recent months has turned this World Economic Forum into one of most gloomy held since the elite meetings in the Swiss mountain-top resort started nearly four decades ago.

Chinese and Russian premiers Wen Jiabao and Vladimir Putin give the keynote opening speeches at the start of the five-day forum, with many participants desperately looking for ideas to shorten the global recession.

Germany’s Chancellor, Angela Merkel, and the British and Japanese prime ministers, Gordon Brown and Taro Aso—who have between them spent hundreds of billions of dollars of taxpayers money battling the crisis—are also among about 40 heads of state or government who will speak this week.

Some countries will use the heavily guarded Davos crisis retreat to seek help. Turkey Prime Minister Recep Tayyip Erdogan is to meet top International Monetary Fund officials in a bid to end differences over a loan deal to help Turkey through the financial crisis.

But much of the attention of the leaders and scores of finance ministers, central bank chiefs and business chiefs will be elsewhere as governments frantically bid to shore up the financial system.

No senior US official will be at Davos even though widespread recovery hopes have been placed on the new US administration.

Davos delegates are also seeing new signs that the battle against the worst recession since the Great Depression of the 1930s is becoming ever tougher.

Confidence among chief executives at more than 1 100 top companies around the world has “plummeted”, according to a survey by consultants PricewaterhouseCooper (PwC) released in Davos.

“The speed and intensity of the recession has rocked the psyches of CEOs and created a global crisis of confidence,” commented PwC chief executive Samuel DiPiazza.

The main theme of the forum will be “Shaping the Post-Crisis World”, and the forum’s founder, Klaus Schwab, said it will be “possibly the most important ever held”.

The massive bank losses and lay-offs on Wall Street and in London will be reflected in the absence of key bankers who held high-profile parties and receptions in earlier years at Davos.

John Thain, head of Merrill Lynch, which had to seek a takeover by Bank of America, resigned last week. Goldman Sachs, previously one of the social highlights of Davos, has called off its party this year.

The economic storm clouds have cast a cloud over attempts to highlight other key issues ranging from conflict zones around the world and climate change to efforts to spread democracy and ease chronic Third World poverty and sex discrimination.

Bill Gates, the former Microsoft chairperson, is to plead the case for new efforts to help the poor.
He announced this week that his charitable foundation has lost 20% of its endowment in the financial crisis and was down to $35-billion last October.

The star appeal at this year’s forum is being provided by Chinese action film star Jet Li and Amitabh Bachchan, the Bollywood superstar. They are to attend a “cultural leaders” dinner on Friday.—AFP

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