Dateline Davos: Lots of gloom, but is there room for a bloom?
(Editor's note: The Al Arabiya Business Team is reporting from Davos, Switzerland, at the annual meeting of the World Economic Forum. This year, all eyes are on the euro zone, the Strait of Hormuz, the continuing events of the Arab Spring and the U.S. presidential race, among other events that are shaping the global economy. It promises to be an exciting year, so hold on. Mohammad A. El-Huseini begins our coverage with his take on the week ahead.)
It is only wise to assume that 2012 will be every bit as memorable as the last few years, at least since Lehman Brothers quit Wall Street and became history. It is also very legitimate to expect the worst and get away with being a pessimist in a year that began with a series of sanctions on Iran, a threat to shut the vital Strait of Hormuz in what could lead to military action, and the downgrade of nine European countries, including France, which sent shivers down the spine of the financial nervous system.
So with all this gloom, is there room for a bloom?
This is a difficult question to answer, and living in the Middle East makes it all more frightening, with the seasons of the Arab revolt turning from spring to autumn. So one great way to assess the situation is to get away from it all and escape to a refuge where ski slopes and abundant cafes make the perfect backdrop for 2,600 elites from around the world, who happen to be in the same place for the same reason. Yes, the World Economic Forum Meeting in Davos seems like a great opportunity to look at the brighter side of the story.
That was my conviction, until I laid my eyes on a little survey by the World Economic Forum, released hours before the meetings. It was not pleasant reading.
According to the Global Confidence Index, 54 percent of global experts expect a major geopolitical disruption over the next 12 months. This compares with a sentiment of 36 percent for that possibility in the fourth quarter of 2011. And just to put things in context, those polled for the purpose of this survey came from all different walks of life, including government officials, business leaders and the least sensational of all, academics. The same group of people believes that we have not gotten anywhere better, economically speaking, since the outbreak of the financial crisis in 2008. Fully 60 percent of those surveyed confessed they lacked confidence in global governance and thus in economic recovery, shadowing the dreadful warnings of the IMF a week ago that the ghosts of 2008 will be revisiting us soon.
So, not a very helpful read for someone looking for the bright side. Nevertheless, the mission is set to chase those lights flickering at the end of the tunnel. The World Economic Forum is no stranger to global trends, and it is those trends that in part steer the group’s annual events. The meetings in Davos this year will convene under the theme The Great Transformation: Shaping New Models, a theme that faces the risks but does not rule out the potential returns.
(Mohammad El-Huseini, editor of Business News at Al Arabiya, can be reached at [email protected])