Business leaders meet in Davos in bid to beat the odds

Written by Reuters | Zurich | Updated: Jan 23 2013, 09:01am hrs
Italian premier Mario Monti will set the tone for beleaguered business and political leaders gathering in Davos this week for the annual World Economic Forum (WEF), with a speech titled Leading against the odds.

The pow-wow will bring together more than 1,500 business leaders and up to 50 heads of state or government, many of them, like Monti, weathered by almost perpetual crisis as they fight to bring their economies and companies through global financial turmoil and a few homegrown scandals.

Its clear the future of the world economy is based on restoring trust. Restoring trust in leaders, restoring trust in our future. And this means we have to move out of this crisis mode, WEF founder Klaus Schwab told a news conference.

Theres still some way to go, according to a survey by global public relations firm Edelman published on Monday. There is an incredible lack of trust in leadership, said Richard Edelman, the firms president and chief executive. Levels of trust in governments are worse than for business. Edelmans annual survey across 26 countries did show a rise in trust in business and government over the previous year, but only 26% trust business leaders to solve social issues and 15% for government leaders, and 19% expected business to make ethical decisions, while only 14% said the same for politicians.

Edelman said trust in public figures had been eroded by scandals in the banking industry as well as controversies ranging from Lance Armstrongs admission of doping, to the purging of Chinese politician Bo Xilai in a murder case and a sex-abuse affair at BBC.

Though Europe managed just to keep the euro zone intact in 2012 and Washington stepped back at the last minute from its fiscal cliff, a WEF survey this month showed business leaders and academics fear politicians are failing to address key problems.

And they will have it all to do again in 2013, subject to the ballot box. Monti will be defending his austerity measures in parliamentary elections in four weeks, and German chancellor Angela Merkel will be hoping a weekend defeat for her party in a regional election wont derail her re-election later this year.

A contingent from the US including four secretaries and 14 congressmen will have another looming budget crunch at the back of their minds.

The WEFs annual risk report cited inequality and the burden of government debt as the biggest economic threats and also highlighted a rise in concern about severe weather, an issue likely to be on the minds of many participants as they struggle even to reach Davos after heavy snowfall cancelled many flights.

The Algerian hostage crisis, the French campaign against Islamists in Mali and the fallout from the Arab Spring will also be hot topics, with many leaders from Africa and the Middle East attending Davos as well as several oil and gas executives.

We face a new reality of sudden shocks and prolonged global economic malaise, Schwab said. Future growth in this context requires dynamism, bold vision and bolder action.

The Davos elite will be shielded from dissent by a ring of razor wire and up to 5,000 Swiss soldiers, though activists will be handing out an award for the worst company of the year, and Swiss left-wing groups plan small protests against financial speculation.

UBS chairman Axel Weber and JP Morgan Chase & Co chief executive Jamie Dimon are among the top representatives of a chastened financial industry, which the Edelman survey shows is still the least trusted sector, on just 50% globally.