No to Protectionism
January 24, 2007
Chancellor Merkel said some countries might be tempted to exploit their economic might to its fullest, by selfishly consuming global resources and setting up customs barriers to protect "their own weaknesses."
"My clear and succinct answer is: no!" Merkel told the gathering of business and political leaders in the Swiss resort of Davos.
Speaking as the current president of the European Union, Merkel said she wanted the bloc to use the motto "more freedom for a new security" as its guiding principle for the future.
She also said Germany, during its presidency of the Group of Eight industrialized nations, would aim at removing exchange rate imbalances, boosting hedge fund transparency and starting a new dialogue with emerging powers.
More opportunity
Merkel said recent deep rooted shifts in the structure of the world economy had spread opportunity for economic growth more widely, especially in emerging nations. But she cautioned that the trend had also created greater uncertainty.
"Those who regard themselves as the winners of tomorrow cannot feel sure that they will that they will also be the winners the day after tomorrow," she warned the gathering of business and political leaders gathered here.
The theme of this year's World Economic Forum (WEF) meeting -- "The Shifting Power Equation" -- sought to take in everything from the growing geopolitical clout of Asia to the increasing influence of the Internet in business and information gathering.
"We have a shift of power in many ways ... with the rise of China and India, and the next layer of countries like Vietnam, Brazil and Korea," said WEF founder Klaus Schwab. "At the same time we see the shift of power from business leaders to customers and shareholders," Schwab said.
Upbeat mood about 2007
The 2,400 registered participants at Davos included 800 corporate chief executives or chairmen, 24 heads of state or government and 85 cabinet ministers.
Business leaders were in upbeat mood about prospects for 2007 and beyond, amid strong corporate profits and forecasts for another year of global expansion, despite a predicted slowdown in the United States.
A poll of Davos participants by the organizers showed that 65 percent of corporate chiefs and politicians thought their children would live in a more prosperous world.
Economist Laura Tyson of the University of California, Berkeley, sounded a cautious note when she said 2007 could be another fairytale year but warned that unresolved global imbalances meant "the big bad wolf is hiding in the forest."
An unusual lack of snow at Davos in the run-up to this year's Forum helped to highlight the issue of climate change, which Schwab expected to top the gathering's agenda.
Cautious welcome for US proposals
There was a cautious welcome for US President George Bush's proposals for a long-term cut in US gasoline consumption, as business leaders urged greater government action on global warming.
"I think it is a movement in the right direction, there is a recognition of the link between climate change and human activity," said Nicholas Stern, the British government's chief economic advisor.
Stern recently penned a major report that warned of the dire economic consequences of climate change unless swift action was taken.
Bush's State of the Union address on Tuesday promised to cut US gasoline consumption by 20 percent by 2017 and favor alternative fuels like corn-based ethanol. But it failed to meet growing expectations of federal limits on carbon emissions to match international ones.
"You have to recognize what everyone is doing. The United States is doing a lot on technology, a lot on standards. But then of course we have to scale up our action," Stern said.
Shifting spheres of influence
The theme of shifting spheres of influence was party reflected in the absence of big name US officials, while India sent a high-profile 100-member delegation and the prime minister of Vietnam -- the newest member of the World Trade Organization -- also showed up.
Another notable "shift" was the lack of celebrities.
With the exception of Davos regular Bono, famous names from the world of entertainment were scarce on the ground compared to previous years when the likes of Angelina Jolie, Brad Pitt and Sharon Stone stole the media spotlight from the corporate bigwigs and political leaders.
"It is not our policy to invite stars," Schwab explained. "It is our policy to invite people who can make contributions to specific sessions."