East-West, North-South: As The Global Economy Turns
News Editor, CNBC.com
China brought the question “are we moving West to East?” to Davos. But the move is not just West to East, it’s North to South, Renault Nissan CEO Carlos Ghosn told CNBC.
A couple of top-level executives told me they are concentrating on emerging markets as there’s just too much opportunity compared with places like Western Europe.
In sessions and in the corridors, India is close to being as big a force at the WEF. In relation to the U.S., the question is “what happens if China stops buying Treasurys?”
In the India’s case the question is “what happens if India stops supplying manpower?”
As Davos adjusted to a White House that was firmly putting domestic affairs at the top of its agenda, there were warning noises about the kinds of policies that can damage the free flow of trade.
If the US government levies a tax on outsourcing, US companies will simply become uncompetitive, Anand Mahindra, vice chairman and managing director of Mahindra & Mahindra.
The United States has moved successfully from a manufacturing economy to an innovation economy, but a company like Apple still needs places to assemble its iPods, he said.
That’s a shot across the bow.
And India is also touting a big infrastructure spending program, with $500 billion budgeted over some four years. It plans to build 12.4 miles of road a day in that time and is stressing a process that is free from corruption.
You have to have a systemic approach to make sure all your procedures are transparent, Kamal Nath, Indian Minister for Road Transport and Highways said.
This kind of spending not only creates jobs, but creates inclusive growth and touches all levels of society, he adds.
Brazil’s profile is also rising. Brazilian President Luiz Inacio Lula da Silva—or Lula, as he is known—was coming this year but fell ill and was forced to cancel. But his intent to go was seen as a strong sign that the country would be using its clout to stress issues like relief for Haiti.
For Brazil, energy is always a big topic. But in Davos there was less talk about biofuels this year, and a higher profile for old-fashioned oil.
José Sergio Gabrielli de Azevedo, president and CEO of Brazil's oil giant Petrobas , however, was in attendance. He said the company has made some “very big discoveries” and was bullish on 2010, predicting 5-percent growth for the Brazilian economy.