January 31st, 2009
11:50 AM GMT
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DAVOS, Switzerland – My grandmother always warned me about "too much of a good thing". I used to think she was being mean not wanting me to gorge myself on cakes, biscuits, and candies. Only tooth cavities later did I realise the wisdom of her words...

Too much of a good thing is dangerous thing. It's the same at Davos. After three days of walking around this congress center, my head is spinning at the sheer number of "world" dignitaries with whom I have rubbed shoulders.

Today's crop included the Secretary General of the U.N., the Head of UNICEF, the presidents of Israel and Mongolia (not at the same time!) a "hello" with the CEO of Coca Cola, a handshake with Bill Gates and an interview with Prince Andrew. Phew.

As the WEF 2009 enters its final days, delegates head home having heard from the horse's mouth about how bad the situation is and the options on the table for putting it right.

Government ministers compared notes on stimulus plans, bankers discussed their lending problems, industrialists bemoaned the lack of markets.

It is fashionable at this point to declare, usually in ringing tones, that Davos is a talking shop of no real value and that I won't come back again. To anyone who says this (with the possible exception of the Turkish prime minister) the only response is "rubbish." There is no single event in the world that gives you as much access to as many important people in a relatively relaxed atmosphere.

Davos succeeds because it is unique. You couldn't invent it, and certainly couldn't replicate it today.

But "get real" Richard.

The key is to remember when it's time to leave. I don't normally mix in these circles and I shall return from whence I came. I have enjoyed hobnobbing with the world elite, but now it's time to go home. Grandma would be proud. I have remembered... too much of a good thing.



January 31st, 2009
11:26 AM GMT
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DAVOS, Switzerland - Luckily, not everybody here at the World Economic Forum fits the stereotype of the standard corporate "suit."

MIT Professor Robert Langer and daughter Susan.
MIT Professor Robert Langer and daughter Susan.

I have just bumped into a charming 18-year-old who must be just about the youngest person ever to wear the coveted white badge of the Forum.

For those not familiar with the ways of Davos, the white accreditation badge is only issued to full participants and their spouses, a category that stands nearly at the apex of the elaborate and rigid caste system that applies here.

If Susan Langer does not fit the corporate stereotype, she isn't exactly your average American high school senior, either. Not many teenagers anywhere have two scientific patents to their name. But then she does have a lot of parental encouragement: her father Robert is a professor at the Massachusetts Institute of Technology, a world leader in the use of nanotechnology to treat cancer and regarded as one of the most brilliant minds in the biotech world.

It is as his "spouse" that Susan is here. But she is clearly far from being in awe of all these eminent and powerful people. "It's totally cool," she tells me, unfazed by my request for her take on Davos. "I got to meet the person who started YouTube, and I ran into Al Gore and got my photograph taken with him."

Ever the proud father, Robert fishes out his cellphone, leans across and shows me the shot of Susan with the former vice-president turned environmental campaigner.

So how did the idea of sneaking young Susan into Davos come about? "He got invited and I wanted to come," she explains simply, adding that she had accompanied him on two previous overseas trips.

It's not just about meeting celebrities, either. Susan Langer's longer-term ambitions also lie in the biotech field but economics is another subject she's interested in. She's taking advantage of exam leave to learn about it from the horse's mouth.

"It's been great," says her high-flying father, "People have been very nice, and I get to spend some time with my daughter."

Now I've heard of "Bring Your Daughter to Work Day", and I think it's a great idea. So why not "Bring Your Daughter to Davos"?

Mind you, if there is still a World Economic Forum in, say, 2020... I for one would bet that this accomplished and personable teenager will be here - this time with her very own white badge.

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January 30th, 2009
12:38 PM GMT
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DAVOS, Switzerland – Let me start by saying sorry. There is no way to get through this blog without a dose of shameless namedropping. How else can I tell you what the great and good have been telling me?

When Richard met Tony... sort of...
When Richard met Tony... sort of...

For instance, this morning it was a short coffee bar chat with HRH Prince Andrew on British industry and how it's weathering the recession. Prince Andrew told me he is spending a lot of time in the UK talking to industry. As Special Representative for UK Trade he can act as a link between all sides in the economy. I will press on this in my Friday interview with him which you can see on tonight's  show. Then there was a quiet talk with James Hogan, the CEO of the Abu Dhabi airline Etihad about his plans for his new A380s.

Sometimes these "meetings" are mere nods in corridors (for instance with the Russian deputy prime minister), other times they are full-frontal interviews such as discussing the Ukraine-Russia gas dispute with the President of the European Commission, Jose Manuel Barroso.

There is something about being in Davos that lets leaders become more reflective and often expansive. Trevor Manuel, finance minister of South Africa, for instance, talked to me about whether he will remain FM after the election (yes, if asked, but not forever was his answer).

Often these meetings are nothing more than "bragging rights."

"Oh yes, I saw Tony Blair," I will tell friends, conveniently leaving out the fact Blair was being rushed to the front of a security line; I was standing near the back... we brushed shoulders. But - hey - I "met" him.



January 30th, 2009
02:21 AM GMT
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NEW YORK — News this week of big bonuses paid out at financial firms on government life support has sparked outrage. AIG is paying $450 million to roughly 400 people at a financial products unit - the same unit that directly contributed to massive losses at the insurer. The company calls them “retention bonuses”.

 A woman holds up a sign near Wall Street on September 22, 2008, in New York City.
A woman holds up a sign near Wall Street on September 22, 2008, in New York City.

They are not alone. The New York state comptroller’s office said cash bonuses paid by Wall Street firms totaled $18 billion in 2008. That is down sharply from the boom times, but still unbelievable considering that these companies would be out of business if not for taxpayer bailouts.

Those headlines stand in stark contrast to another story told to me this week. A medium sized company, hit hard by frozen credit markets and clients that are behind in payments, found itself running low on cash. The bosses made the difficult decision of asking their workers if they would skip a pay period. It was totally voluntary. Ninety percent agreed, with many coming up to the bosses after to express their support and willingness to pull together to make it through this crisis.

Another story crossed our desks about a Michigan pancake restaurant where workers got together and agreed to work a shift with no pay to help the restaurant owner bring down costs. Local patrons, hearing the news, left more generous tips to help make up the difference.

These are not big bosses worth millions of dollars who make a big show of taking a dollar salary as a public relations move. These are real people with real bills who are making big sacrifices to try to save their jobs and the companies they are loyal to.

Maybe we should require CEO’s at companies taking taxpayer money to do a job swap and go spend some time out in the real world. They might find out that you don’t need to pay million dollar bonuses to find employees that are worth holding on to.



January 29th, 2009
02:14 PM GMT
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ROME, Italy - There is a saying in this country that what is good for automaker Fiat is good for Italy, meaning that if the government can save Fiat, it will save hundreds of thousands of jobs. The problem is, who can save the Italian government?

Fiat worker Luigi Mercogliano said the government needed to inject more money to re-launch the industry.
Fiat worker Luigi Mercogliano said the government needed to inject more money to re-launch the industry.

Fiat is the top private employer in Italy, producing more than 10percent of the country's GDP. It has a domestic workforce of roughly 78,000 but hundreds of thousands of people including spare parts suppliers and sales and after-sales service providers owe their jobs to the carmaker.

The head of Italy's business association estimated that the entire auto industry here has a workforce of 1 million.

This is why when there is talk about bailing out Fiat, in reality the government needs to include a vast number of businesses that go beyond the car giant itself.

Unfortunately the cash-strapped Italian government can't afford the billions of dollars other European nations are pumping into their economies to revive the automotive sector.

Fiat's chief executive was recently quoted warning that 60,000 jobs in the automotive sector could be lost if the government did nothing to help. Fiat has already enforced temporary production halts at its Italian plants, sending thousands of workers home on reduced pay.

After a series of top-level talks between government officials, trade union representatives and auto bosses, the minister for economic development promised to unveil "within the next 10 days" a series of measures to help the sector.

The new measures pale if compared to the billions of dollars that are being promised to automakers in the U.S. and elsewhere in Europe. All the Italian government can afford at this time, according to people familiar with the plan, is roughly $650 million aimed mainly at promoting the sale of new car models with a low environmental impact.

For example, if you own a car that is at least 10 years old, and you plan to trade it in for a new and less polluting model, the government would give you roughly $2,000 to purchase it (a similar plan is already in place, but covers up to $1,000).

Government officials say companies researching new eco-friendly technology would also receive financial assistance.

There are also talks about increasing road taxes for the largest and more polluting models, such as sports cars and SUVs.

The plan, which is still under discussion, sparked protests among Fiat autoworkers, especially those who have been sent home with reduced pay.

"We don't spit on the government's good intentions," said Luigi Mercogliano, who has worked just one week since September at the Fiat plant near Naples. He and a few hundred were demonstrating outside the prime minister's office on Wednesday night while the talks were under way. "But the money they are talking about is not sufficient to re-launch the automotive sector in Italy," he added. "In other countries, in Germany, in France and in the U.S., their governments are already putting in a lot more money for the technological renewal and the development."

The Italian government knows what needs to be done. But it doesn't have the money to implement a large-scale investment plan. So, while it can't simply sit on the sidelines and watch other European partners pumping money into their car industry, it is trying to avoid having to deal later with the problem of massive layoffs.

Fiat's top managers say the situation is difficult, and called for quick and decisive measures. But the government appears reluctant to intervene massively to assist the car industry knowing that other sectors are asking for similar treatment.

Indeed representatives of construction and infrastructure businesses are not sitting on the sidelines watching the government bail out the car industry. They warn that some 250,000 jobs are at risk over the next six months, and are asking for billions of dollars in aid.

Italy's GDP is in freefall (like that of many other EU countries), but the problem here is that its current debt is greater than the total value of its economy (roughly 104 percent of its GDP). The outlook is bleak.

So, while construction workers, automakers, fishermen, farmers, parmesan producers and their extended families are asking for bail out money, my question is: who will bail out the Italian government?

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January 29th, 2009
12:29 PM GMT
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DAVOS, Switzerland – If Angelina or Brad had been at Davos this year, they would have been given the treatment ‘Royal celebs' deserve. But they are not here, so in the absence of glitz we have to find other ‘stars' to hang onto.

Thankfully there are plenty of alternative delegates worthy of our attention. For instance, economists like Stephen Roach of Morgan Stanley Asia and Joseph Stiglitz formerly of the World Bank. Not heard of them? Not hanging on to their every utterance? Tut tut. No wonder you're in this mess!

These men may not have the good looks or dashing manner of Hollywood stars, but here at Davos this year they are ‘rock stars' in their own right.

When they walk through the hallways they are feted. Crowds gather to hear the words from their lips. A private chat with one or the other is economic nirvana.

Just this morning as I walked through the lobby, there was Roach holding court; cameras recording his words, journalists jostling to hear his view on how bad things would get.

For some time both men have been forecasting the horrible financial disaster we now face and were sneered at. They said it was going to get worse...and it did. And now at Davos both men can look us in the face and say "told you so". Neither is actually saying that of course. Instead they are putting forward ideas and solutions to get us out of the mess.

What worries me is Roach and Stiglitz are saying the plans on the table won't work, from stimulus packages, to co-ordination, to regulatory reform, they claim more needs to be done. We have ignored these economic rock stars before, to our cost. Let's not make THAT mistake again.

Tune in to CNN International each evening at 1900 GMT to catch my new show, ‘Quest Means Business.'

For more coverage of this year’s World Economic Forum, go to our special Davos page.



January 29th, 2009
11:32 AM GMT
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If Angelina or Brad had been at Davos this year, they would have been given the treatment ‘Royal celebs' deserve. But they are not here, so in the absence of glitz we have to find other ‘stars' to hang onto.

Thankfully there are plenty of alternative delegates worthy of our attention. For instance, economists like Stephen Roach of Morgan Stanley Asia and Joseph Stiglitz formerly of the World Bank. Not heard of them? Not hanging on to their every utterance? Tut tut. No wonder you're in this mess!

These men may not have the good looks or dashing manner of Hollywood stars, but here at Davos this year they are ‘rock stars' in their own right.

When they walk through the hallways they are feted. Crowds gather to hear the words from their lips. A private chat with one or the other is economic nirvana.

Just this morning as I walked through the lobby, there was Roach holding court; cameras recording his words, journalists jostling to hear his view on how bad things would get.

For some time both men have been forecasting the horrible financial disaster we now face and were sneered at. They said it was going to get worse...and it did. And now at Davos both men can look us in the face and say "told you so." Neither is actually saying that of course. Instead they are putting forward ideas and solutions to get us out of the mess.

What worries me is Roach and Stiglitz are saying the plans on the table won't work, from stimulus packages, to co-ordination, to regulatory reform – they claim more needs to be done. We have ignored these economic rock stars before, to our cost. Let's not make THAT mistake again.

Tune in to CNN International each evening at 1900 GMT to catch Richard's new show, ‘Quest Means Business'.

For more coverage of this year’s World Economic Forum, go to our special Davos page.



January 28th, 2009
10:44 PM GMT
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DAVOS, Switzerland - I often ask myself why do I bother to come here? Then I remember, I am here as a journalist covering what the leaders say and do. But why do so many delegates, who have a choice, come here? Surely they would be better off tending to their business back home?

Ordinary delegates say they want to hear what world leaders say about crisis.
Ordinary delegates say they want to hear what world leaders say about crisis.

This morning I got the official schedule. Some of the sessions are extremely timely and relevant. The "Brainstorm - What happened to the Global Economy?" panel promises to be good. But other sessions, like "What is Good Design?" or "Political Art: What Now?" while interesting in an esoteric way, are hardly vital at this time of crisis.

In the registration hall I asked "ordinary" delegates why they came. Not the high and mighty - just mid-level executives and officials who make up the bulk of Davos.

Some said they wanted to hear world leaders and decision makers talk about the best way out of the financial mess (after all Vladmir Putin, Angela Merkel, Gordon Brown Wen Jiabao are all scheduled to speak). Others come to continue their dialogue with clients and suppliers and discuss what they need to do next.

Representatives from NGOs and aid groups like UNICEF attend, to make sure their causes are not forgotten in this moment of crisis. One lucky businessman is here to talk to investors in medical research - yes, there are still some people with money to invest.

Lots of delegates have been coming to Davos for many years - this event is part of their calendar. Just as you don't stop going to visit relatives at Christmas, so you still come to Davos in a crisis; even more so, they would say.

Perhaps the real reason to be here is summed up by the delegate from Asia who said "opportunity is the opposite of crisis." Quite!

Tune in to CNN International each evening at 1900 GMT to catch ‘Quest Means Business.’

For more coverage of this year’s World Economic Forum, go to our special Davos page.



January 28th, 2009
02:43 PM GMT
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30x30.todd.benjamin

I remember being at a gathering in Mumbai last November, and a CEO of a major company got up and said that as CEOs we've lost our confidence. It struck me not only for its bluntness but that he was saying it publicly. Now his pronouncement has become commonplace.

A new global survey of 1,124 executives by PricewaterhouseCoopers is echoing those doubts. Only 34 percent described themselves as very confident about the outlook for growth over the next three years, down from 42 percent last year. Only one in five are very confident their revenues will increase over the next 12 months, compared to 50 percent in last year's survey.

Every executive I've spoken with has told me he can't remember a time as bad as this.

The head of PwC, Sam DiPiazza, Jr., put it this way: "The speed and intensity of the recession have rocked the psyche of CEOs and created a global crisis of confidence. CEOs are most concerned about the immediate survival of their companies."

The overwhelming majority of chief executives, 80 percent, are facing higher finance costs, and nearly 70 percent anticipate postponing investments.

Given all the above, it's not suprising that about 76,000 layoffs were announced in just one day this month, and it's likely to get worse before it gets better.

One economist described the global economy like a car stuck in the mud. Authorities keep pushing the fiscal and monetary accelerator, and the wheels keep spinning. If the CEOs surveyed are right about the recession being a long, drawn-out affair, get used to the wheels spinning.

Do you think global CEOs are being too pessimistic about the economy? What advice would you have for a CEO facing a severe economic downturn?

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January 28th, 2009
02:40 PM GMT
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DAVOS, Switzerland - The new Davos zeitgeist is everywhere. Even the technology is deleveraging.

Charles Hodson shows off his Davos pedometer.
Charles Hodson shows off his Davos pedometer.

Once upon a time, about a year ago, this was the place to learn about new gadgets. The iPaq passes as almost quaint these days but it was here that I for one first used one, linked in through a whizzy wireless network. A few years later I made friends with an iPod.

But this year a rather less exotic gadget was handed to me with my accreditation badge, forum program and briefing documents. Small, blue, plastic and emblazoned with the World Economic Forum logo, it was introduced as ... a pedometer.

It has a little display showing the number of steps taken since it was last reset and the idea is, you clip it onto your waistband, go about your business at Davos and then at the end of the week there's a prize for the person who has walked the farthest.

What better way of underlining the new austerity that now clings to Davos as tightly as its winter coating of thick snow! Had it not been for the absence of an airfield up here, we'd have been treated to opulent displays of executive jets in previous years; instead, though, the real movers and shakers swung in and out in noisy helicopters, while the merely influential slummed in it up the mountains in limos and luxury German sedans.

This year, I realise, it's what we Brits call "Shanks's pony" that is the vehicle of choice for the Davos glitterati: your own two feet. Even a lift in one of the courtesy World Economic Forum shuttle buses might undo any cred you might have had here.

The high-speed, high-spending, high-lending economy is dead. It's the good old-fashioned footslog that will get us all out of jail: no excessive cost, no impact on global warming and no undue risk - unless of course you fall victim to the many icy pavements.

To keep us all on our toes, the security officers have instituted a serious of pointless detours: entrances to the congress center that were open to all yesterday are now only for VIPs, and the rest of us are asked (with impeccable Swiss courtesy) to use another one several hundred yards away.

As one of life's great pedestrians, it all comes naturally to me, I must say. For the record, I have taken 9,918 steps since this time yesterday - and counting.

For more coverage of this year’s World Economic Forum, go to our special Davos page.



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