WEF's heavy hitters fail to grasp the nettle

Three big themes have dominated this year's Davos: Europe, jobs and inequality.

While it would be comforting to think that the considerable brainpower assembled 5,000 feet up in the Alps has come up with solutions to these problems, that would be stretching the truth ...

The evidence is that inequality is lowest in countries where there is solid growth, strong collective bargaining and supply-side interventions.

The high-tax Scandinavian model, in other words. Few of the heavy hitters in Davos are signed up for that ...

Sooner or later, policymakers will understand that the real threats are mass unemployment and deflation, not inflation and the size of budget deficits ...

Gdn  27 Jan 2012    Global Risks    IMF

Davos

Davos 2012

Davos guide: what you need to know about the World Economic Forum

The agenda is a full one, with the mood one of caution and some trepidation. Slowing growth, financial fragility, governments teetering on the brink of insolvency and default, and clear signs of a public backlash against the excesses of the rich and powerful: all have created a sombre backdrop to the invitation-only affair ...

GreatGrandDad
22 January 2012 10:06AM

D is for Denial in Davos.

No way will they face up to the fundamental fact that the whole of modern industrialism, and the capitalism invented to serve it, and the consumerism which depends on it and which it depends on was the result of outpourings of easily-won energy from within Earth, and that its 'growth' is now of the cancerous sort.

Of course dystopia will be the result.

Countries (particularly Britain) that have not maintained a strong agrarian (or 'peasant') sector, or cannot quickly re-develop one, are faced with socially disruptive de-development.

But those who can afford Davos will be the last to face up to it.

Even though properly-faced up to it is no bad thing.

It is downright daft to have one person overworked and stressed out, with another completely out of work but stressed out by searching for a non-existent job.

Both should be on a three-day week and each should be able have a productive allotment.

Expect a clamour for job-sharing----but not for it to emanate from Davos

Gdn  22 Jan 2012    Global Risks 2012    The End of Growth

World Economic Forum warns of economic turmoil and social upheaval

'Realigning expectations' in the 'global community'

The survey of 469 global experts identified chronic problems with government finances and severe income inequality as the most prevalent risks over the next decade.

"These risks in tandem threaten global growth as they are drivers of nationalism, populism and protectionism at a time when the world remains vulnerable to systemic financial shocks, as well as possible food and water crises," the report said.

The study said early hopes that closer global integration would inevitably lead to higher living standards for all were at risk of being dashed by trends that left large numbers of people fearful about the future.

"Individuals are increasingly being asked to bear risks previously assumed by governments and companies to obtain a secure retirement and access to quality healthcare.

This report is a wake-up call to both the public and private sectors to come up with constructive ways to realign the expectations of an increasingly anxious global community," said John Drzik, chief executive of management consultants Oliver Wyman ...

Gdn  11 Jan 2012    Global Risks 2012

Davos

Western profits wilt on China's surging wages

What will happen when there's nowhere 'cheaper' to go? And will China create a 'reserve army'?

Rising wage and production costs in China are eating into the profits of Western companies and may soon set off an exodus of multinational companies to cheaper locations ...

China's manufacturing wages have vaulted from around $1,000 annually 10 years ago, to $3,900 last year.

Pay in the industrial hubs of the Pearl River and Yangtze River deltas are much higher and likely to rise further after a wave of industrial disputes at Foxconn, Honda, Toyota, and Omron.

Bruce Rockowitz, head of the pan-Asian logistics group Li & Fung, said cost pressures are rippling through the region.

"It's not just China going up: its everywhere," he said.

It is unclear whether this will drive up inflation for imported goods in the West, reversing the benign phase of globalisation seen over the last fifteen years, or whether multinationals will adjust to constrained demand in the US, Europe, and Japan by slashing margins, or a mixture of the two.

Credit Suisse's survey of executives found that 55pc of foreign firms in China could relocate plant to Bangladesh, Vietnam, Indonesia or other low-cost regions relatively easily, though it would be costly ...

Telegraph  18 Aug 2010    China    Global Labour Market    Is capitalism the only game in town?

Sweatshop girl

As part of a series assessing whether Bangladesh is on track to meet the UN Millennium Development Goals (MDGs) by 2015, the BBC's Alastair Lawson visits a safety pin factory in the capital, Dhaka, which employs children.

The electricity supply in the sweatshop in the crowded part of old Dhaka where Asma, 10, makes safety pins for a living is so dangerous that the foreman can only turn on the lights using a broomstick.

"If I use my hands I may get an electric shock," he explains.

Asma is one of about 10 workers in the dingy factory - in the heart of the crowded and maze-like alleyways of this part of the city - who are under 14 ...

Asma usually arrives at work at eight in the morning and leaves at eight in the evening. She often works six days a week and is paid about $2 a day ...

Asma explains that as one of six children in her family she and her siblings have no choice but to work. Her father is a bicycle rickshaw puller and does not earn enough money to feed his family ...

BBC NEWS  10 May 2010    Corporate Sociopathy

Meeting Millennium Development Goals

Tories accused of scuppering vulture funds bill

Development secretary writes to David Cameron after mystery of who derailed private members' bill designed to protect poorest countries ...

Amid tumultuous scenes in the Commons today, a Conservative MP objected to the bill, preventing it from passing to its third reading, despite a commitment from the party's front bench to support it.

Sally Keeble, the Labour MP who was involved in drafting the bill, claimed that the handful of Conservative front-benchers present covered their mouths with their hands, so that it was impossible to tell who had shouted "object" at the crucial moment ...

Vulture funds are investors that buy up the debts of poor governments at a fraction of their face value, and then try to win the money back in courts around the world, regardless of whether the country in question has secured international debt relief.

The bill would have prevented such cases being brought in London, and would also have applied retrospectively. That could have protected Liberia, which lost a $20m (£13m) case against two investment funds in the UK late last year.

Guardian  12 Mar 2010    G20, IMF, World Bank, WTO

Economists in Davos Look with Concern to 2010

Economists at the World Economic Forum in Davos warn that paying down massive public debt will be "very, very painful."

Deep spending cuts and significant tax hikes may be unavoidable ...

"There is an illusion of normalcy," (Kenneth Rogoff ... the Harvard University economics professor) ... warns.

But that illusion, he points out, comes largely as a result of the immense amount of money pumped into the economy by governments around the world.

The result -- massive public debt across the globe -- is "historically exceptional" ...

The question now is when to shift priorities. When can one begin focusing on paying down public debt without immediately stifling the fragile recovery? And, of course, will taxpayers play along?

"In the US, for example, any politician who tries to significantly raise taxes would be gone immediately," Rogoff is convinced. "We haven't had to tighten our belts for 50 years."

Shiller says he can already sense a widespread feeling of anger among his compatriots -- a degree of anger, he said, that hasn't been felt among the America populace since the Vietnam War.

The situation isn't much different in many other countries in the industrialized world ...

Der Spiegel  01 Feb 2010

... there is evidence to prove that free trade has not served well the richest economy in the world.

The US showed remarkable growth together with a rise in real wages for a majority of its population up until the late 1960s.

This was a period when the US manufacturing industries were in good health and were still protected from foreign competition by tariffs (taxes on foreign imports). Since 1973, however, when it turned to quasi free trade, the country has seen declining levels of real wage for around 80 percent of its workforceas high wage manufacturing sector jobs have been replaced by low wage service sector jobs.

The benefits of free trade have only accrued to the owners and CEOs of large multinational corporations which have been able to outsource production to low wage countries. Of course there has been overall GDP growth but that says nothing about how the benefits of this growth were distributed. Besides, the current financial crisis bares for all to see how consumer demand during the recent years was built upon the foundations of unsustainable debt.

Many free trade economists argue that the consumers benefit the most from free trade since it lowers the costs of goods and services. These economists forget that the same consumers are also workers and wage earners. If they lose jobs due to decline in manufacturing and increased outsourcing or are forced into low wage sectors of the economy due to free trade, their purchasing power is reduced. For one who suffers wage loss in tandem with falling prices there are hardly any benefits from free trade to brag about ...

openDemocracy 13 April 2009

This recession will hasten the shift to a new economic world order

Goldman Sachs predicts Indian incomes to become world-class by 2030

Free trade – or fair trade?

... suggesting that the solution to today's economic turmoil is another dose of open, free market, flexible globalisation fails to appreciate the root causes of the current crisis. What the world needs now is a completely new approach to solving the problems of the global economy, not more of the same.

The globalisation programme of the past 30 years has been based precisely on the liberalisation and deregulation of existing markets, plus the creation of new markets where none existed previously. The Washington consensus – and its Swiss variant, the Davos consensus – entailed the enforced opening of many emerging economies to international competition, the widespread privatisation of public services and state-owned enterprises, as well as new freedoms for banks and other financial institutions to boldly go where no one had gone before.

We are already witnessing the chaos caused by such financial deregulation on a grand scale. Yet despite the growing consensus on the need for re-regulation to correct the errors of the past, Gordon Brown persists in calling for the rapid conclusion of the Doha round of world trade talks, which include their own subset of negotiations to open up and deregulate financial markets still further ...

Yet even before the current crisis hit the finance sectors of the rich world, free market globalisation had signally failed to deliver for the majority of working people on the planet. Last year, the World Bank was forced to admit that its previous estimates of the numbers living in poverty had been too optimistic, and that three decades of globalisation and open markets have left some 1.4 billion people still facing extreme want ...

Having been exposed to the most extreme form of market opening over three decades of structural adjustment, the countries of sub-Saharan Africa have seen their share in global exports collapse by almost 70% in the past 30 years, and four in five of the continent's workers remain mired in poverty. According to UN studies, those countries which liberalised their trade regimes most dramatically have also experienced the highest increase in poverty levels.

Rejecting Brown's free market fundamentalism does not mean swinging to the other extreme and shutting down trade in favour of North Korean self-sufficiency, even if such a scenario were possible.

The same UN studies show that autarky has led to increases in poverty almost as great as those which accompany full scale liberalisation. Instead, it means taking back democratic control of the global economy and redirecting it towards principles of public benefit and environmental sustainability rather than unfettered private profit.

That is the challenge for our common future ...

Guardian 03 February 2009

The tax gap

More than $10 trillion must be invested in clean technology between now and 2030 to spare the Earth from an unsustainable increase in global temperature, the World Economic Forum warned today ...

The study identified eight emerging, large-scale clean energy sectors that were seen as playing a crucial role in the transition from fossil fuels to a clean energy strategy over the next two decades. These were: onshore wind, offshore wind, solar photovoltaic, solar thermal electricity generation, municipal solar waste-to-energy, sugar-based ethanol, cellulosic and next-generation biofuels, and geothermal power.

Max von Bismarck and Anuradha Gurung from the World Economic Forum, and Chris Greenwood and Michael Liebreich from New Energy Finance, said "enormous investment in energy infrastructure is required to address the twin threats of energy insecurity and climate change. In light of the global financial crisis, it is crucial that every dollar is made to 'multi-task' to create a sustainable low-carbon economy."

At a time when the global economy has been struggling, the report said business had an opportunity to make healthy profits from the fight against climate change. An index of the world's 90 leading clean energy companies had a five-year compounded annualised return of almost 10%, unmatched by the world's major stock indices.

Earlier a group of climate change experts including Lord Nicholas Stern, author of the UK government's report on the economics of climate change, warned against complacency in the UN climate talks, due to conclude in December in Copenhagen to replace the 1997 Kyoto Protocol. They said the economic and climate change agendas should be yoked together in 2009 to ensure that spending had long-term benefits for the environment.

Guardian 29 January 2009

Davos Climate alliance

Geoengineering

Severn Barrage

World Social Forum 2009: a generation’s challenge

Shaken survivors of economic blast ask: what went wrong?

So, when does the contrition start?

William Amelio interview

SourceWatch

WEF sees 'grim' economic outlook

Coca-Cola Climate Friendly coolers

Ban Ki-moon pledges action on water resources