The World Economic Forum Annual Meeting 2008 is underway at Davos, even as the weather clears and makes way for clear blue skies over the ski resort. But the mood among business participants is anything but sunny. Fears of a global recession loom large over the summit, even as a CEO survey by PricewaterhouseCoopers underscores a large geographical divide in business confidence. There is now a yawning gap between the way the West sees the future, and the way the East sees it. America?s credit crisis has taken a huge toll in its region of immediate impact; only 35% of CEOs in North America say they are confident of growth, a drop from 53% last year. Confidence among Western European CEOs also declined to 44%. In contrast, CEOs operating in the economies of Latin America, Asia-Pacific and Central & Eastern Europe report a sharp rise in business confidence. It couldn?t have been a better study in contrasts. Confidence begets confidence, and the fact that these economies have seen rapid expansion over the past decade has led to the belief that more is coming.

So, while on one hand we have Union commerce minister Kamal Nath holding forth on the inherent resilience of India and the emergence of sovereign funds as an important factor, on the other, you have global chiefs talking about the implications of the US slowdown turning into a full-fledged recession. American and Western European businesses see their bottomlines threatened, and this is likely to curtail their expansion plans over the coming year. This is significant. As these firms go into crisis-management mode, it is businesses dependent on other economies that could gain from a strategic headstart this coming fiscal. This is already reflected in the M&A plans of CEOs, as the survey has found. While most CEOs expect a rise in M&A activity, those from the Asia-Pacific region are keener than the rest to do crossborder deals within the next 12 months. It?s not only about confidence, though. Much will depend on two critical factors: how quickly the developed economies adapt to a possible recession and chalk out contingency plans, and second, how well Asia-

Pacific companies adapt to change and implement their growth plans. Ultimately, it is execution of strategy, and not mere confidence, that will determine which way economic clout moves.