Investment Markets » Banking and Finance
What Were The Main Themes At Davos?
The bright mood that prevailed in the Swiss Alps masked deeper fears about global risk.
If you want to see the world as a whole, the best view is from the moon. The second best is from Davos where the annual meeting of the World Economic Forum offers a unique top-down snapshot of the world's problems and opportunities.
This year's Edinburgh festival for business and politics didn't disappoint in terms of variety. Juxtaposed with the closed-door summits on tackling world trade were some frankly surreal fringe sessions and the usual crop of great parties. There were some odd pairings too. Gordon Brown shared a love-in with Rupert Murdoch, Claudia Schiffer hosted a discussion on climate change with Shimon Peres and to complete the strangeness of the scene, Ken Livingstone popped up too.
The soundtrack of Davos this year was unmistakeable: it was the light tapping of computer keys. Everyone was blogging. The gathering's official theme was the shifting power equation – and much time was given to analysing the rise of China and India.
But the power-shift that dominated conversation was the growing success of the City as a financial centre at the expense of New York, yet not even American angst on that score could quash the spirits of most attendees. Confidence about the world economy was tangible, even alarming. This meeting may well go down as the WEF's most complacent.
Yet there were solid achievements underpinning the optimism: notably, real progress in kick-starting the stalled Doha trade talks. And it would be wrong to assume that geopolitical risk wasn't given a good airing: this year's Davos dilemma was plain enough.
The world's economy is in excellent shape, but it's politics are disturbing – from rising protectionist sentiment, to turmoil in the Islamic world, nuclear proliferation and the damaged moral authority of the US. International power is shifting – but we don't yet know how to manage it.
Economics has a mechanism for coping – regulated markets, but there is no equivalent mechanism to address the growing complexity of politics. Simply saying "reform the UN" won't get us far. Here is the next great challenge, revealed by the mountain-top camera of Davos.
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