1. The set-piece panels on finance & economics were virtually replays from previous years. The world is de-growing and de-inflating faster than it is de-leveraging. 'Looser money for longer' seems to be the only game in town, to provide air-cover for structural reforms to take place. We hope.
2. I enjoyed the session with Mario Draghi. He stuck to his refrain: "I will do what my mandate demands". Most of the sessions can be found on the website and snippets of the new Argentine Finance Minister or the Indian Central Bank Governor are worth watching.
3. As Klaus Schwab puts it, the Fourth Industrial Revolution "holds great promise or great peril".
4. In our jargon, it means that the tail of outcomes has become fatter on both sides and we are in a period of structural dislocation. It's a revolution not just in terms of economic systems ('Uberisation' versus Fordism) but a displacement of social, political and belief systems. As I argue on CNBC, I believe it's one reason why markets are so jittery.
5. In terms of "great promise", I spent some time with the folks from healthcare, artifical intelligence, 3-D printing and robotics. This is where real growth could come from. Hubo the Robot was wearing a badge similar to mine and Yonatan Adiri demonstrated how your smartphone can be an incredible medical device. Joe Biden set the tone at the start of the meeting with his "moonshot call to action" in the fight against cancer.
6. You know that the geo-political winds are shifting when you see people take selfies with the Iranian foreign minister! There was a heavy US presence – Secretaries of State and Defence, apart from the VP. John Kerry's exposition on the Iran deal and US foreign policy (whether you agree with it or not) was impressive.
7. Geo-politics is important for markets because it introduces a non-diversifiable source of risk i.e. it adds to the baseline risk premium in a capital asset pricing model. There are at least four flashpoints: (a) Russia/Ukraine (my debate from last year), (b) Europe & Brexit, (c) The Middle East & Oil and (d) China-US relationship in the theatre of the South China seas.
8. I hosted a session on Europe (under Chatham House rules) with HSBC Chair Douglas Flint, Prof. Helene Rey and, Deputy PM of Turkey Mehmet Simsek amongst the speakers. I think we agreed that the base case for European markets is moderately positive but determined that the 'state of the union' (Brexit, Migration, Greece) will be weaker in a years’ time.
9. Earlier in Zurich at an LSE forum, we heard how Brexit could now be the likely outcome. For the swing voter, it is a vote on immigration. It was argued that in order to avert Brexit, Labour will need to run a vigorous stay-campaign.
10. Middle East: I recall last year, it was during the meeting at Davos that Saudi King Abdullah passed away. There is recognition for diversifying sources of growth. Together with Yonatan, I got to know Fahd Al-Rasheed when we spent a couple of weeks together on a course in 2014. He has built and now runs King Abdullah Economic City. (Take a look at what he has to say). Nonetheless, the issue with the middle east is whether the social compact can withstand a phase of relative austerity. A fast-dropping price of oil can make them more internally combustible and externally collision-prone.
11. China (Economics): We spent a lot of time on China. Market moves during the meeting forced us to confront concerns about a potentially disorderly slowdown and its implications for others. I felt that views were polarised between the alarmist and the dismissive. For all its worth, here is my middle-of-the-road view on Fox Business with Maria Bartiromo. At a private roundtable over dinner, we were asked to offer input for the Chinese G20 presidency. Some of my Chinese friends felt that they are misunderstood and that western commentary is too sweeping.
12. On a related note, I was asked to join a group of discussion leaders along with the Finance Ministers of Indonesia and South Africa to talk about Emerging Markets. I expanded on the Mars-Venus relationship that apparently exists between markets and policymakers. We concluded that intervention in currency markets is not a sustainable policy option; other measures are required to address the convexity of foreign inflow & outflow. (I had the opportunity to speak to the Indian channels ET-Now and TV-18 about EM during the week).
13. China (Geo-politics): I joined a dinner discussion on "The future of China-US relationship" led by David Rhodes of CBS news. Kevin Rudd provided the fire-starter with excellent contributions from Oxford's Rana Mitter and the LSE's Keyu Jin. Take a look at Kevin Rudd's Harvard publication and Ted Talk on "constructive realism" if you haven't done so already. I think we agreed that China-US relationship will always need to be managed – acknowledging that some differences will remain irreconcilable. It’s in the interest of both to keep the focus on common interests but there will be hairy moments along the way.
14. Predictably, things flared up when the conversation moved to China-Japan relationship! The historical and socio-cultural perspective that each side brings to this is fascinating and perhaps, underestimated. Having observed the (non-existent) dynamic between the leaders of Japan and Korea during a previous Davos, I was pleasantly surprised to see the two countries resolve one of their long-standing issues recently.
15. I attended the session with Minister Amari from Japan. He didn't take questions. If he did, I’d have asked if the three arrows are hitting against these four shields: (a) Limited action from corporations to either engage in Capex or create "expectation of continuous wage hikes", (b) a prospective consumption tax hike which blurs the message, (c) the proposition that womenomics and drones are sufficient for Japan to avoid foreign workers and (d) the suggestion that 2% is still a credible inflation target in the presence of global disinflationary forces. Credibility is earned, not demanded. Takeshi Niinami and Adam Posen were direct as always.
16. Angela Merkel's absence was clearly felt. It reinforced the perception of diffused political leadership in Europe. Also absent was the equivalent of 'flagship speeches' like that of Chinese Premier Li Keqiang's last year or Japanese PM Abe's (in English) the year before. We saw a lot of Justin Trudeau.
17. Finally, whether it is for enlightened self-interest or genuine compassion, the subjects of inclusion, values and norms joined the mainstream dialogue in a major way. On saturday, I was asked to lead an off-beat discussion on the values that should shape technology in the fourth industrial revolution. (More on that later).
18. In a personal capacity and together with some other YGLs, I continue to explore the role of constructive conflict and a proactive pursuit of diversity in averting extremism. We held a ‘hackathon’ on this last year. Unfortunately, the topic is even more relevant this year and we’ve taken the conversation forward. True diversity goes beyond gender. As I said to Edie Lush (here), we need to look beyond visual diversity and look for diversity of cognition, background and approach.
Views are personal to the author and not necessarily those of any organisation that he's affiliated with.