GENEVA — The annual World Economic Forum that begins today in Davos, Switzerland, is likely to be dominated by concerns that the sharp downturn of the U.S. economy, the world’s largest, could trigger a global recession.
This story first appeared in the January 23, 2008 issue of WWD. Subscribe Today.
The gathering of world business and political leaders comes as the Federal Reserve, responding to an international stock sell-off on Monday, took emergency action on Tuesday to reduce the U.S. benchmark interest rate by three-quarters of a percentage point.
“The risks of a significant slowdown, if not a recession, have been increasing,” said Richard Samans, WEF managing director and a former economic policy adviser to President Bill Clinton.
Along with concerns over volatility in global financial and energy markets, the declining dollar and China’s undervalued yuan, the agenda includes high oil prices and growing apprehension about the rapid growth and clout of sovereign wealth funds.
Climate change and terrorism, as well as corporate social responsibility, food and energy supply shortages, the emergence of economic powers such as China and India, and global trade problems also are on the table for the 2,500 forum participants.
About 27 heads of state and some 113 cabinet ministers from 88 countries, as well as more than 900 chief executives from the top global corporations are slated to take part in the five-day meeting, which has the theme, “The Power of Collaborative Innovation to Benefit Us All.”
“The meeting gives us all a chance to understand and shape the global agenda for the year ahead and beyond,” said Klaus Schwab, WEF founder and executive chairman.
Top officials from 74 Fortune 100 companies are among the guests.
National leaders include: U.S. Secretary of State Condoleezza Rice, who will deliver a keynote address on “Climate Change and Terrorism;” U.K. Prime Minister Gordon Brown, Japanese Prime Minister Yasuo Fukuda and Chinese Vice-Premier Zeng Peiyan.
A series of high-level meetings are also expected to take place on the sidelines between the trade ministers of major trading powers such as Brazil, India, the European Union, the U.S., Egypt and Japan, on how to advance the stalled Doha global trade talks.
U.S. Trade Representative Susan Schwab and World Trade Organization director general Pascal Lamy are likely to take active roles on how to advance the problematic global trade negotiations.