It was an intriguing but ultimately depressing Davos. The sight of global markets plunging deeper each day, and the oil price falling to a 13-year low, seemed to sharpen the debate and make it more relevant, even if concrete recommendations on what to do about it were in short supply.
Whisper it, but the annual meeting of the World Economic Forum was also made more enjoyable by the fact that the "masters of the universe" – the bankers, financiers and business leaders who attend in droves – could not be so insufferably smug as in previous years.
Nothing so concentrates the mind as the horrible possibility you might be down to your last billion.
I went there with a “shopping list” of four questions I wanted answered: on oil, Saudi Arabia, China and US interest rates. I got lots of illumination and insight on each of those, but, I regret to say, little in the way of concrete answers.
Forget the “fourth industrial revolution”, oil was the central theme of the meeting, with representatives from all the major producing countries as well as corporate and other experts attending. But until the penultimate day (last Friday), when there was a surprising spike in the price of crude, the debates were a mixture of recrimination and bafflement about the reason for the continuing falls.
The Saudis were determined. "We can take it," they said. The Emiratis were pragmatic, putting their trust in further economic diversification and reform. The Azeris and Nigerians, as representatives of the less well-off producers, were angry at what they regarded as Opec mismanagement.
The Russians were specific. Their energy expert said oil would be at $57.95 by the end of 2017. He knew that because Reuters had told him so, which summed up the quality of expertise on show.
Any hopes of great insight into what path Saudi Arabia might take this year were dashed when the disappointing level of Saudi engagement at Davos became apparent. Maybe it was the presence of so many Iranians at the WEF that put them off, but it seemed like a missed opportunity on the part of the kingdom to explain the nitty-gritty of the “national transformation plan” prepared by an army of consultants, but still veiled to the world.
On China, there was even less solid evidence that world leaders knew what was going on. The IMF and Goldman Sachs – unlikely bedfellows but certainly expert – said that they thought China’s leaders could successfully manage the transition to a consumer economy, as long as they told the truth about it as they went along.
A Chinese regulator on the same panel looked as though he’d been caught telling fibs in class, and promised not to do it again. That was about it. I came away thinking China is as near to a “black swan”-inspired disaster as ever.
The big disappointment was the American participation. The vice president Joe Biden told some nice stories in a rambling speech; secretary of state John Kerry, as usual, eloquently talked peace and reconciliation.
But in the absence of Janet Yellen, the Fed chairwoman, neither really got to grips with my final concern – the direction of interest rate policy this year. She was quietly blamed by quite a few Davos attendees for the unsettling of global financial markets that has occurred since rates were raised in December, and there was a consensus that increases would have to be more muted this year. But no solid guidance from the US contingent.
The big Davos takeaway for me was with regard to Europe. It is the spiritual (and in many cases actual) home of Davos man, but I have never witnessed such universal gloom about the old continent. The “grand project” of European Union advance has stalled, speaker after speaker intoned, on fears of migrant chaos, impending Brexit and faltering economic growth.
The consensus was that the Schengen agreement, one of the two cornerstones of EU architecture, was on the verge of collapse, and the other – the euro – must surely follow. The global economic and financial disruption that would ensue would be disastrous.
It was a gloomy end befitting a gloomy and diffident WEF.
fkane@thenational.ae
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