Bugle for global recovery at Davos
Feb 11 2013
The theme this year was resilient dynamism. The current state of the world requires both — resilience and dynamism, to move to the next level of growth. Each country has its own issues to deal with — the skills required however are common — the ability to rapidly react and innovate in changing circumstances, the courage to take bold decisions on a consistent basis and to keep moving forward. This is not the time to rest on any past laurels; everyone has to quickly move on to the next steps. As stated by Christine Lagarde, managing director of IMF, “Good decisions have been made,” she said. “Sometimes at the last minute, as in the US, sometimes laborious and confusingly as in the eurozone,” she said. “In 2013, they have to keep up the momentum.”
This was the first meeting after the global economic crises where the mood was optimistic — however cautious it may have been. In any battle — you have to first win in your mind and it was therefore, heartening that the sentiment was positive. Europe remained the focus this year. It appears that the worst of the eurozone crisis is over. Even Nouriel Roubini, (Economist and New York University professor); otherwise known as “Dr Doom”, for his accurate predictions on the collapse of the US housing market and the global recession, said that the euro zone crisis was, “less worse than it was last summer.” Concerns were voiced about Japan and its new economic policies, including an inflation target of two per cent and a widespread asset purchasing plan to pump money into the country’s lagging economy. However, it remains to be seen if Japan will surprise everyone and turn the tide.
There was a lot of interest in China with its new leadership that seems to be modern and open to suggestions. There is great hope that China will focus on structural reforms and the economy will expand more quickly. There seems to be a change in attitudes in China, which is positive. It will also be interesting to see how China solves its social problems and conduct itself in a society connected by social media.
Interest in the US was not just in the economy, but its role in tackling global security challenges. The world seems to call for greater engagement from the US. In a forum where the focus is on economics, there was equal concern over the political turmoil in the Arab world, terrorism in North Africa, a spate of natural disasters that have highlighted the failure to tackle climate change, and growing inequality. Countries need to also focus on tackling global problems that are associated with basic human needs.
Another concern up for debate, which is very real in the world, was gender equality. Facebook COO, Sheryl Sandberg brought the focus to unconscious gender stereotyping. Policies, processes, debates and discussions are not the solution to the issue. A deep-rooted change in mindset is required. This is not male bashing as the change in mindset is equally required in both genders from an overall society and business environment perspective. We need to shed old ways of thinking, as the world around us is evolving to become a place where gender will become extinct as the basis of anyone’s evaluation. Organisations and governments that realise this will have an easier road to the future. This was best articulated by Drew Gilpin Faust, who said, “I am not the woman president of Harvard, and I am the president of Harvard.”
In this high-octane setting of the business and political world, it was sad to see that India was not the flavour. While demographics are and business economics are still in India’s favour, we’ve lost our spot in the hearts of people, especially the business community. While there’s debate over whether the BRICS have delivered; China still maintains its credibility. The new phrase is MINT — Mexico, Indonesia, Nigeria and Turkey. These are the new growth economies. There is 3 trillion dollars of cash globally on companies’ balance sheets, which is looking for investment; it needs to go the markets. This is money waiting to be tapped with the potential to transform countries and help reduce poverty. Will India be able to become the kind of magnetic destination that will pull this money towards its side? An apt quote from Naomi Judd, “ No one’s born with their destiny stamped on their forehead...we make the choices to fulfil our destiny.” Only time will tell.
(The writer is CEO of KPMG India)