Rebooting Planet Earth
How a Dubai summit helped set the agenda for this week’s World Economic Forum meeting in Davos. The agenda? Nothing less than ‘global redesign’…
January 27, 2010 9:58 by Jay Akasie
Gieve is the former deputy governor of the Bank of England who recently joined the hedge fund GLG.
Society should also be prepared to face more financial pain before the world economy improves. The director of the London School of Economics and Political Science, Howard Davies, said that the public sector is the next shoe to drop in the fiscal crisis.
“So far, most of the pain has been taken in by the private sector while public funding has continued relatively unscathed,” he said. “But the pain will switch. Large spending cuts are on the way and public sector workers are about to pay the price for the private sector recession.”
Will the big oil money coming out of the Gulf help ease the pain? “The tone in the Gulf is much improved. But oil wealth won’t be the locomotive that brings Europe out of the recession,” Davies said.
The president of the International Trade Union Confederation in Belgium, Sharan Burrow, said that there are still many unanswered questions for the workers of the world. Some 59 million joined the ranks of the unemployed in 2009, and 1.4 billion people are struggling to live on less than $2 a day, she said.
The Asian tiger, China, appears to be humming along, to a large extent because of its export-oriented economy, the deputy chairwoman of HSBC, Laura Cha, said. Her hope is that markets in China will become more liberalized. “We want China to lead Asia out of the doldrums. The concern, of course, is that too much bank lending might lead to non-performing loans,” Cha said.
Harvard Law School’s Kennedy closed the summit by reminding leaders at this week’s Davos meeting to act on a new scale.
“New governmental structures do tend to emerge in the crucible of crisis. But why wait for the crisis?”