Davos ends with hope for recovery – but little else
If there is one outcome of Davos 2009, it's that everyone seems to know now how the world got into this mess, but not how to get out of it. Or, according Josh Lerner, Professor of Investment Banking, Harvard Business School, where it's going next.
“For instance when it comes to the question of investment – should we be pulling back waiting for things to get worse or is it instead the time to jump forward and take advantage of the opportunities.”
In his opening speech Russia's Prime Minister Vladimir Putin reassured everyone that Russia will stay open to foreign investors. But Anatoly Chubais, Director General of the Russian Nanotechnology Corporation, says conditions in Russia are far from the biggest concern of most international investors.
“Investment doesn’t care about Russia. They care about themselves. They are in too complicated a situation to try to discuss, now, Russia’s European relations, to try to discuss the investment conditions in Russia for foreign investors. Its absolutely untimely, it’s 100% untimely! I myself made this mistake in the forum in trying to explain. They don’t care, it’s the wrong situation, they feel catastrophe.”
And in this case, says Professor Josh Lerner, it’s politicians who are expected to provide re-regulation as well as capital.
“This is not the kind of thing that the private sector, by itself, can really resolve. I think, even thinking back to a year ago, that proposition would have been highly controversial.”
Many still hope the crisis will play out to a V scenario – sharply down and then sharply up again. But realists suggest preparing for the worst – deflation or even stagflation.
With so much uncertainty the most sensible idea that has come out of this meeting for the Davos Man seems to be keeping your head while all around are losing theirs. Perhaps a little bit more was expected from those who were going to “Shape the post crisis world” – But in order to shape one needs to be in control – and that is certainly something that the 2009 Davos men don’t seem to be.