By Michael R. Czinkota
The World Economic Forum (WEF) convened in Davos, Switzerland for a four-day conference with more than 2,500 attendees, including government officials, politicians, and even some celebrities. With big names such as Angela Merkel, David Cameron, Jack Ma, and Bill Gates presenting their thoughts, the meeting is significant.
The WEF serves to expose new ideas and innovations and show “this is who we are, and that is what we need.” It highlights current and future issues and puts momentum behind sensitive international negotiations such the TTIP (Transatlantic Trade and Investment Partnership) and the TPP (Trans-Pacific Partnership).
This year, the theme of the “new global context” focused on the conflicts instability, in addition to political, economic, and technological changes that make the world a fragmented place. The conference lived up to its reputation for insights and surprises such as:
- The announcement that European Central Bank would purchase €60 billion a month to ward off deflation, encourage inflation and jumpstart growth across the 19 nations that are based off the Euro. Though many had expected smaller quantitative easing efforts, the annualized 720 Billion Euro was a reasonable comparison to the U.S. pumping in dollars in 2008 and 2009.
- After years of tying the Swiss Franc to the Euro, the currency appreciated rapidly to its highest valuation in 30 years following the Swiss National Bank decision to allow an unrestricted rally of its currency.
- A study released by international group Oxfam projects that the world’s richest 1%, mostly from the U.S. and Europe, will soon own more than the rest of the world’s population put together. Li Keqiang Premier of the People’s Republic of China stated “we need to ensure a relatively high employment rate, especially sufficient employment for young people. And we need to optimize income distribution and raise people’s welfare.”
- Terrorism and its effect on the global economy was brought up by French president Francois Hollande. He mentioned, “there cannot be prosperity without security.” Others called on the private sector to play a greater role in developing a global international response and addressing the root causes of terrorism.
Personally, these three items surprised me:
- The lack of prepared plans and budgets for zero cost money. Having free money not only expands the tools but also changes the toolbox. This began in an era of mega trans-border problems, such as Ebola and climate issues, untold opportunities in space, and burdensome infrastructure reforms. All of these problems persist while the guests arrived in 1,700 private jets.
- Former Mexican President Calderon’s claims that Mexicans in the US do not want a new country, just more money. What an opening for public discourse and dissent!
- A lack of public pronouncements on the changing relationship with Cuba and its effect on all Caribbean competitors and their service industries. Just like Sherlock Holmes’ non-barking dog, the attention given to the problems in Nigeria was insufficient.
As the meeting drew to a close, some big questions remain:
- With global problems in finance, growth and health – who will run the show and who will give up sovereignty?
- What are the key trade-offs, and who will supply the money?
- Are the key choices only between ‘feed, fund or fight’? Is there a new role for humility and humanity?
- To what length should the daily ‘long term’ planning horizon of firms and government be re-calibrated?
- Since trust is crucial, how can we encourage its growth and intensity, and which fields and endeavors should prioritize trust?
- Are there really long term links between business and freedom?
- Is it time to slow down systematically, perhaps starting with ‘slow food’?