January 26, 2012
Global elites — many of the 2,500 of them billionaires — are spending a few days in Davos, Switzerland, attending the World Economic Forum (WEF), a group founded in 1971 “committed to improving the state of the world.”
The state of the world doesn’t appear too rosy. The recent downgrades of major economies, the clamor over perceived income inequality, the crisis in the eurozone, and other concerns are weighing heavily on the participants. Vikas Oberoi, chairman of India’s second-largest real estate developer, observed, “Many who will be in Davos are the people being blamed for economic inequalities. I hope it’s not just about glamour and people having a big party.” Azim Premji, chairman of India’s third-largest software company, was equally somber: “We have seen in 2011 what ignoring this aspect can result in. If we don’t take cognizance of it and try to solve this problem, it can create a chaotic upheaval globally.”
Not just the movers and shakers were expressing concern, either. Mainstream economists were of one mind about the world economy, agreeing with the downbeat report from the International Monetary Fund on January 24 which reduced its economic growth outlook for 2012 significantly, predicting at least a “mild recession” in Europe and the rest of the world to slow further from its current tepid pace.
Carmen Reinhart of the Peterson Institute for International Economics agreed that there will be a “serious economic crunch [with] another sub-par year of stubbornly high unemployment, weak growth and delayed recovery in general in all the advanced economies.” Professor Joseph Stiglitz of Columbia University, also on the roster of attendees, said that the IMF might be underestimating the projected difficulties and that the crisis will be “all the worse because of the weakness of appropriate government response.”
This article was posted: Thursday, January 26, 2012 at 9:41 am