Is the World Economic Forum reacting to events rather than acting proactively again?
By Michelle Perry | Published 16:43, 24 January 12
This time last year as the world’s elite of politics, business and finance wended their way up into the Swiss mountains to the hill-top village of Davos, CFOWorld ran an article about what chief financial officers were expecting to find out from delegates of the World Economic Forum annual meeting.
The potential for a double dip recession was top of the list for many CFOs. After three years of economic turmoil CFOs wanted to know if there was to be a period of welcome stability ahead.
Davos didn’t really have an answer to that question, and neither in fact do we still know the answer. We’re still waiting to find out if the UK and/or the industrialised world will hit another downturn.
The dangers of growing inflation was another hot topic on the snowy streets of Davos last year. Again, it will be a topic of interest at the summit this year despite some indication that inflation is finally falling in the UK. And the Bank of England forecasts that inflation will fall sharply from its current level of 4.2 percent over the coming months. But as we’ve learnt we can’t always count on predictions.
Still, just days ago John Bason, finance director of Associated British Foods – which owns discount clothing chain Primark as well as being one of the world’s largest sugar producers – said that inflation pressures were easing. So there’s some good news for finance chiefs.
Last year the WEF used Davos to launch a “global situation space” – which it described as a “unique mechanism to understand and respond to a range of global risks in a more collaborative, integrated and proactive way”. That felt a little like ‘horse, stable, door and close’ given that the world was already grappling with the financial risks of the credit crunch.
Two weeks ago the WEF published its 60-page analysis of 50 risks over the next decade that endangers the progress of globalisation. Severe income disparity and precarious government finances rank as the biggest economic threats facing the world, the WEF found.
Both topics – the widening pay divide and government finances – are currently burning issues for the British government and the corporate world. It’ll be interesting to see if the visiting Brits from both government and business return with any wisdom to resolve these issues at home. Or is the WEF reacting to events rather than acting proactively again?