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GENEVA: The icy Swiss mountains are to host the world’s business
and political elite this week for their annual gathering in Davos,
where the cooling temperature of the world economy is set to focus
minds.
The Davos event, a unique spectacle of wealth,
power and debate, begins Wednesday when chief executives and heads
of state gather in the chic Alpine ski resort for five days of
public discussions and private deal-making.
Started in 1971 and known as the World Economic
Forum, the gathering provides a unique opportunity to gauge the
mood and preoccupations of some of the world’s most powerful
people.
This year’s invitation list includes 27 heads
of state or government, 113 cabinet ministers and a smattering of
stars from the world of entertainment, notably British actress
Emma Thompson and singer and campaigner Bono.
Among the presidents, Afghanistan’s Hamid
Karzai, Israel’s Shimon Peres, Colombia’s Alvaro Uribe,
Nigeria’s Umaru Yar’Adua and his counterpart from the
Philippines, Gloria Arroyo, are likely to draw particular attention.
Other big-name attractions include UN Secretary
General Ban Ki Moon, Microsoft founder and philanthropist Bill Gates
and British Prime Minister Gordon Brown.
The prospect for peace in the Middle East is
likely to be a major theme—US Secretary of State and top
negotiator Condoleezza Rice is to open the event on January 23—but
it is the health of the world economy that is likely to dominate.
The official theme of the meeting, “The Power
of Collaborative Inno-vation”, appears intentionally vague.
An avalanche of weak economic data from the
United States has raised fears the world’s biggest economy is
heading towards a recession, meaning the bankers, corporate
executives and policy-makers may arrive in more morose spirits than
in previous years.
One of the key questions this year will be:
“If America sneezes, does the world still catch a cold?”
The role of emerging countries in Asia and the
Middle East will be crucial in answering this question.
Can emerging economies withstand a slowdown in
the US and power the world economy, or will they too grind slower as
their dependence on the American motor becomes apparent?
Some of the people best placed to answer this
will be in Davos, from economists and central bankers to the heads
of Indian conglomerate Reliance Industries or the chief executive of
China Mobile Communications Corp.
There will also be representatives of Asian and
Middle Eastern sovereign wealth funds, the state-backed investment
funds that have recently helped re-capitalize a host of struggling
Western banks.
“We have to understand how such funds operate
and Davos will be a platform to do so,” explains the founder of
the event, Klaus Schwab.
He adds: “It is a good sign that the
developing world plays a major role in the global concert.”
The US economy has been hit by a downturn in the
property market that has exposed banks to billions of dollars of
losses and caused a generalized tightening of credit to businesses
and consumers.
The US Federal Reserve has slashed interest
rates by a percentage point in recent months and is expected to
continue loosening monetary policy.
President George W. Bush has also ridden to the
rescue with a proposal for a giant fiscal stimulus plan worth around
$140 billion or 1 percent of gross domestic product.
Last year, a survey released before the event
showed that 92 percent of 1,100 chief executives in 50 countries
were confident about their company’s revenue growth in 2007.
This year’s survey is likely to show a
distinct swing in sentiment but Schwab warns about excessive
pessimism.
“This year, it is very important, with all the
problems that we have, not to fall into an overextended
pessimism,” he said.
High oil prices, the falling dollar, rocketing
food prices, trade imbalances and a rising tide of protectionism add
to the broad economic woes linked to the slowing US economy.
Global warming and poverty eradication are among
the other weighty topics set to be tackled by the assembled worthies
but there is also lighter fare on offer.
Last year, a workshop called “Dialogue in the
Dark” offered high-performing businessmen the chance to explore
how they interacted as a group when asked to assemble a Russian doll
in pitch darkness.
A series of nightly parties also provide
delegates with endless oppor-tunities for winding down and smoozing,
with the annual party thrown by Internet darling Google the
highlight of the social calendar for many.
-- AFP
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