Chill in air as delegates negotiate slippery slopes

GLOOMY DOESN’T describe the mood at Davos this year. Funereal comes closer.

The air is freezing, the ski slopes are empty and a low, grey cloud hangs over this small Swiss Alpine village. Inside the bunker-like Congress Centre in the village, which hosts most of the numerous discussions and 2,500 participants over the five-day conference, the atmosphere is much cooler.

The usual frivolity has been replaced with austerity. Davos 2009 is more sober than previous gatherings, which befits a crisis that has submerged the financial world.

The organiser, the Swiss think-tank, the World Economic Forum, faces its greatest challenge. It must prove its annual meeting can rise to something greater than a networking confab where politicians, economists and businesspeople stroke chins and intellectualise on the state of the world.

It must show that it can solve the problems that have brought the global economy to its knees, though its choice of theme for this year – “Shaping the Post-Crisis World” – seems embarrassingly premature. Many delegates appear to feel that the worst is still to come.

Gone are the late-night cocktail parties and cosy fireside chats. There’s no Bono this year, nor will jazz pianist Jamie Cullum will be flown in by Indian corporate giant Mittal to provide background music at a lavish drinks reception. The designer ski gear and mink coats are less visible. The jet helicopters are still busy flying in and out of the Swiss resort, though this year they are carrying more government leaders and fewer senior bankers.

This year it has become the norm for top bankers who graced Davos in the past to cancel at the last minute. AIB chairman Dermot Gleeson and Bank of Ireland chief executive Brian Goggin, who have travelled to Davos in the past, decided not to attend in recent days.

There are few Wall Street executives; most have been laid off or the banks simply don’t exist any more. The handful in attendance this year are fighting for their professional lives.

The leading political and business figures are this year more focused on trying to salvage some sort of rescue plan to save the global economy and move on from the crisis, rather than on hobnobbing over warm mugs of Swiss Glühwein.

Many participants on the first day of Davos continued playing the blame game, still trying to assign responsibility for the personal wealth lost over the last 18 months. Media mogul Rupert Murdoch calculated this at more than $50 trillion and most blamed the lack of proper regulation.

Bearish commentators, assumed too pessimistic last year, attracted more attention yesterday. Financier George Soros wouldn’t even guess at how long the crisis would last – the question was irrelevant, he said, because the world has never experienced a financial catastrophe of this scale.

Stephen Roach, head of Asian operations at US investment bank Morgan Stanley, set the tone early yesterday when he said that for the first time since the second World War the world’s economy would shrink.

Roach told The Irish Times that Davos doesn’t fix the world; it just engages interested people in important discussions about the problems of the world. “I have been coming to Davos for a long time – I have never seen a fix come out of Davos,” he said. “This is not going to be the first year.”

Read Simon Carswell’s daily blog from Davos at www. irishtimes.com/blogs/business