In Davos - a mini travelogue
Photo credit: Christof Sonderegger / World Economic Forum
As I make my way this week to Davos via Riyadh and Zurich, it becomes clear that the chill in the global economy has reached the deserts of Saudi Arabia. I attend a panel at the Saudi Global Competitiveness Forum where each speaker outdoes the next in headlining the many risks of the current downturn and predicting the gravest of consequences. ‘Godzilla’ seems to have replaced ‘Goldilocks’ as the defining metaphor for our world markets.
At first, it seems to me that the town of Davos itself is cocooned from the panic. I am staying in the same room at the same hotel, and the same cheery concierge rushes forward to lug up my bag. It is only when I see the glum faces and conspiratorial whispers of the CEO execs milling around that I realize that this year at least, the celebration and paeans to the ‘animal spirit’ will be missing.
But even as we deplore the office refurbishments, the private jets and the lavish parties of what seems to already be a long past, gilded age, it is instructive to note that businesses were not alone in taking a deep and heady drink from the punchbowl. Nations were also afflicted by the same malaise of overconfidence and a relentless focus on the short-term.
The global bubble was an era when the American spent too much and saved too little, while the Chinese saved too much and spent too little. Resource-rich countries invested the windfall profits from high commodity prices into sovereign wealth funds rather than investing in human capital and social development.
The Europeans were secure in their belief that they had a better form of capitalism even as the bottom fell out of their banks. And in India, years of bubble- induced growth allowed the country to take the eye off the ball when it came to desperately needed reforms and social investment.
We were all in it together - businessman and politicians, corporations and nations. So I do hope the Davos Annual Meeting 2009 becomes a place where we focus on what to do for the future rather than finger pointing for the past. One thing has become quickly apparent in my many conversations here - the bursting of the global bubble is forcing countries to address hard questions and realities. Countries will have to tend to basic ‘housekeeping’ concerns, from the health of their domestic markets and rising income inequalities, to the state of their social security nets and the size of their deficits. And to do any of this successfully, our discussions will have to be more about finding solutions than scapegoats.
Tags: Davos, global financial crisis, Saudi Global Competitiveness Forum, World Economic Forum
January 29th, 2009 at 9:27 pm
nandan, expecting u to be at davos and was wondering what u will post this time.. good one.. though i have to say that most of what you are saying is pointing towards the past decisions by various government and current realities - if there is one thing that has been proven in the current financial crisis - is the so called economic linkages of variuos countries - wondering what will WTO have to say for this? in another related comment i read about Putin remarks - it was a chilling reminder, of political leaders asserting their individual / country power - so is the world war 3 not far off? will india be a pawn or a player??
January 30th, 2009 at 4:54 pm
Nandan, It is quite interesting to read about what is going on in the power corridors of the worl when we are in a mess. The general psyche of the politicians will be to drag to the “scapegoats” whereas the businessmen have to counter them with their focus on future. All the best for your efforts
January 31st, 2009 at 1:35 am
Nandan,The crony capitalistic attitude of global economy has led to this unexpected,unimagined scenario, where we stand today. A single set of solution will be hard to decide or define even from the top thinking tank of the globe at Davos. But, realization of gravity to the situation and its causes by the top corporate & government representatives must be the topmost priority, which should further be percolated down the masses from then on. Let the ideas for sustainable development come from enterprising masses to the top, and not the other way around.