Notes From Davos, Day One
Forty-four heads of state. Countless cabinet ministers, professors, leaders of industries and NGOs, actors, actresses and musicians have all descended on this little mountain town to...talk. A lot. About a lot of things.
The World Economic Forum's 43rd annual meeting got down to business today after last night's opening festivities. The WEF's logo features the slogan "Committed to Improving the State of the World," and the conference is sometimes lampooned by columnists and pundits as 'Woodstock for gasbags,' rich people heading to an exclusive ski resort to think heavy thoughts and have people tell from the stage how high-minded they are. I can only imagine they've never been to an annual meeting, or haven't been to one lately.
Sure, there's a lot of ogling of global celebrities, snapping cell phone pics of powerful people, fur coats and champagne receptions. Over the last decades the Forum, under the leadership of founder Klaus Schwab, has broadened the guest list and broadened the concerns of the conference. Contacts are made that would be hard to make any other way, people with a product or an idea are hunkered down in a corner banquette making a pitch to a stories entrepreneur, NGO leaders get to speak directly to the industrialists and politicians who have it in their power to ease the lives of the world's poorest people. And yeah, a lot of champagne does get served after a hard day of talking, and a serious day of listening.
Today a panel called "De-Risking Africa" brought together heads of state and industrial leaders to talk about doing business in Africa. The host of the conversation began the questioning with South African president Jacob Zuma, who immediately went after the premise of the conversation. "There's risk investing capital anywhere in the world. Are you saying there's more risk here than other places in the world?" Africa's continent-wide economy has been growing rapidly in recent years, and is projected to keep up that 5-plus percent pace in 2013.
President Goodluck Jonathan of Nigeria, the continent's biggest country, conceded there are problems doing business in Africa, but insisted there was a lot more to celebrate than denigrate lately. He was concerned, however, about the situation in Mali. His country is a leading contributor to the African forces under the regional grouping ECOWAS, the Economic Community of West African States. The president said, "Terrorists are always willing to instigate trouble because it means more money to them. We have to move fast," to respond to the crisis in Mali, and the one that may be emerging in neighboring Algeria.
Louise Arbor, president of the International Crisis Group, said she sees North Africa and the Sahara as "the second major theatre in the war on terror." She added that the military response only served to obscure the underlying causes of regional unrest inside these countries: "There is risk, tremendous risk, that the militarization of these conflicts could obscure the real issues, and take on a life of its own."
The industrial leaders on the panel, Sunil Bharti Mittal, CEO of Bharti Enterprises, a major cell phone company across Africa, and Graham Mackay of SAB-Miller, a global brewing company founded in South Africa more than a century ago.
The two talked about the woeful state of Africa's infrastructure. While calling Africa the world's last high-profit play, he noted that in his business, he can't build towers where the country needs them because there's no electricity. If he wanted to bring in materials to supply the juice there are no roads to get it there. Mackay agreed saying Africa's actually growing faster than the infrastructure can support, "and the gap is widening, rather than narrowing."
Later in the day Dr. Schwab opened up the conference, welcoming the attendees and two special guests, Italian Prime Minister Mario Monti, and International Monetary Fund managing director Christine Lagarde. Monti, who faces the Italian voters soon, reported that his country is in much better shape than it was 14 months ago, as is the Euro. Lagarde praised the Italian leader, but reminded the world that Europe's, and the world's economy, are far from healed. The average developed nation now owes more than a year's gross domestic product, and while the worst of Europe's crisis may be over, Lagarde said, "Let's not relapse. Let's not relax. 2013 is going to be a make or break year for the world's economy."
The IMF has predicted healthy worldwide economic growth for the coming year of 3.5 percent, but that average hides a disturbing prediction: Growth in the developed world is expected to be an anemic 1.5 percent, while developing nations will set the pace at 3.5 percent.
The new kids on the economic block and their representatives are now so much more a presence and a force at the World Economic Forum. Indians, Russians, Chinese, Malaysians, Indonesians and Chinese make up much more of the conference than they did when I began coming to these shindigs more than a decade ago. That difference reflects the hard work of the WEF not to be a Euro-American talk session, but to reflect the way the world has changed. The Azerbaijani oil minister, Russian investment bank chiefs, Indian telecoms execs all have a fascinating story to tell that's mostly happening far away from the cameras of the world's press. Davos gives them a chance to invite the world to come see.
I don't know if you remember, or have heard of, the television show "Supermarket Sweep," first broadcast in the 1960s. Two housewives would line up at the front of an enormous supermarket with an enormous clock overhead. Their challenge was to fill their shopping carts with as much merchandise as they could in a short amount of time to win, and take the groceries home. As the audience cheered, the two piled things in, trying to pile the stuff as high as they could before the bell. For a working reporter, the Davos meeting is supermarket sweep for the head...starting with early morning breakfast meetings and ending with packed late-night cocktail parties...I'm piling everything in. My alarm goes off in another few hours, and I'll run through the streets of town again.