/ 26 January 2011

World Economic Forum opens with plenty of ideas

World Economic Forum Opens With Plenty Of Ideas

Buoyed by a burst of optimism about the global economy — and mindful of the “new reality” that has framed it in the aftermath of the financial crisis — about 2 500 business leaders, politicians and social activists will tackle an array of issues on the first day of the World Economic Forum.

This year’s annual meeting in the picturesque Alpine town of Davos will take on several issues ranging from concern over China’s growing clout, simmering anxieties about Europe’s debt crisis and whether the financial crisis that has wrought lay offs, cutbacks and austerity measures has exited from the worst stages.

The five-day meeting starts on Wednesday and will feature a keynote address by Russian President Dmitry Medvedev who postponed his planned arrival by a day after a suicide bombing killed 35 people in his country’s busiest airport amid lax security.

The topic of Medvedev’s speech hasn’t been shared, but given the intense security surrounding the meeting, and the fact that terrorism remains an issue of both political and commercial concern, his audience is expected to listen keenly what Medvedev has to say.

The global economy will also take centre stage, too. The theme of this year’s meeting is “Shared Norms for the New Reality”, and part of that includes the new economic reality, too.

“The notion of a ‘new normal’ is premature given the fragility of the global economy, but the elements of a new economic reality appear to now be in place,” organisers said of a morning meeting that will feature Azim Premji, chairperson of India’s Wipro, and economist Nouriel Roubini, known in financial circles as Dr Doom for being one of a number of commentators who forecast the global crisis.

“A lot of effort has gone in over the last couple of years to really understand what went wrong,” Dennis Nally, chairperson of PwC International told the Associated Press (AP) on Tuesday night after he unveiled a strongly positive global survey of CEOs that showed 48% of them were “very confident” about growth in the coming year.

“This past year’s results were pretty positive, pretty strong, and I think it’s given CEOs confidence that the economy overall is moving in a very positive way, and that’s what’s fueling their confidence.”

James Quigley, CEO of Deloitte Touche Tohmatsu, told AP that his company’s hiring has returned to pre-crisis levels and is experiencing strong growth.

“And I believe many business leaders are going to come with their businesses in that same condition,” he said. “So I think we’re going to have a much more optimistic tone. Some will still attach the word cautious to that, but I am optimistic, and I believe that a sustained recovery has begun.”

Nally added that while confidence is improving “there is a degree of realism that there are some real issues out there that could derail the recovery”.

Another key component of this year’s meeting is China’s emergence as a dominant economic force and what direction its government may take.

“Every uncertainty in the world has to do with Chinese politics,” said Arturo Bries, professor of finance at the IMD business school in Lausanne. “I’m not expecting any surprises from the Western leaders, but we may have surprises coming from China.”

He said that China-watchers would be analysing comments by a host of Chinese business leaders for insights into that nation’s economy and future plans.

“Whether China decides to buy Spanish and Portuguese government debt? Whether China decides to lessen the pressure on the dollar? That’s what I’m going to be looking out for,” he said. – Sapa-AP