WEF opens with China, global economy in spotlight

Power brokers opened their annual Davos forum with a strong emphasis on Asia's emerging giants.

india Updated: Jan 25, 2006 19:34 IST

Power brokers from the worlds of business and politics opened their annual Davos forum on Wednesday, with a strong emphasis on Asia's emerging giants and concern over the health of the global economy.

China and India are high on the agenda of the World Economic Forum, which this year is gathering more than 2,300 leaders, officials and executives for five days of high-powered networking.

Chinese Vice Premier Zeng Peiyan, the kingpin behind his nation's five-year economic planning cycle, was to be a keynote speaker of the opening day, immediately after German Chancellor Angela Merkel formally kicks proceedings into gear.

Cheng Siwei, vice president of the Chinese parliament, gave a foretaste of the debate to come, noting that China's foreign trade surplus jumped more than 200 per cent to just over $100 billion.

The vast nation has unofficially become the world's fourth-largest economy after reporting near double-digit growth for 2005, and experts here predict it will continue apace, with China also moving more investment dollars abroad.

This year's gathering in the snow-clad, picture-postcard Swiss Alps resort aims to put business firmly back on centre stage after gripes over last year's flirtation with Hollywood celebrity.

"It's a unique cast," founder and chief executive Klaus Schwab told a news briefing, saying the heads of all major international institutions, including the United Nations, International Monetary Fund and World Trade Organisation were in attendance.

"All people who are in charge of international issues can be found over the next three or four days here in Davos."

Schwab also underscored the ongoing technological revolution, noting that "we are now moving from globalisation to 'googleisation'."

With information available around the clock and around the world, "the real competitive advantage (now) comes from being innovative", he said.

Senior economists warned that the United States was still failing to tackle its swollen deficit and consumer spending spree, while there were heightened fears of a possible cut in vital oil supplies.

Stephen Roach, chief economist of US bank Morgan Stanley, said there was a "dangerous degree of complacency" over the situation.

Separately, disputes between Russia, Europe's biggest natural gas supplier, and neighbours Ukraine and Georgia have raised questons about its reliability as a long-term provider, providing fuel for key debates here on energy.

The fears coincide with a brief spike in oil prices to nearly $70 per barrel, and a survey of business participants at Davos underlined concern over tight energy supplies.

This year's president of the Organisation of Petroleum Exporting Countries, Edmund Daukoru of Nigeria, is scheduled for his first major public appearance here alongside outgoing president Sheikh Ahmad Fahd al-Sabah of Kuwait.

Other major international issues due to be thrashed out at Davos include Iran, terrorism, the Middle East, regional security problems and the future of the European Union.

Mohamed ElBaradei, head of the UN's nuclear watchdog, will speak at a time when the international community is demanding severe action against Iran over its atomic programme.

The foreign ministers of Britain, France and Germany, who have been leading negotiations with Tehran over its programme, will meet again here.

Other leaders present include: UN chief Kofi Annan, presidents Pervez Musharraf of Pakistan and Olusegun Obasanjo of Nigeria and prime ministers Ibrahim Jaafari of Iraq and Recep Tayyip Erdogan of Turkey.

Former US president Bill Clinton has also agreed to come.

However, a repeat of last year's headline-grabbing initiatives on tackling poverty or global warming is unlikely this time around.

Middle East peace brokers are focussed on Wednesday's voting in the Palestinian territories and, in a few months, in Israel, where Prime Minister Ariel Sharon has been incapacitated after a brain haemorrhage.

First Published: Jan 25, 2006 19:34 IST