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Last Updated: Friday, 23 January, 2004, 18:18 GMT
It's good to talk at Davos

Diary
By Mike Rake
KPMG international chairman

Top business leaders, politicians and campaigners are continuing to discuss and debate the global economic issues of today at the World Economic Forum in Davos. Here Mike Rake reports on day three.

The atmosphere both inside and outside of the bustling conference hall in Davos is refreshing.

Bill Clinton in 2003 in Davos ©World Economic Forum
Bill Clinton is a big fan of the World Economic Forum

The sunny weather out on the mountain slopes is in turn being radiated back from the annual meeting of World Economic Forum.

Up-beat mood

Although the mercury level reading continues to be stuck well below zero, there is a feeling of warmth and optimism amongst the delegates. Conviviality is a welcome commodity; as one well-known advertising slogan runs, it's good to talk.

The temperature reading from the forum contrasts markedly with last year's gathering. The pessimism and general atmosphere of bad feeling that hung over us in 2003 was not something to be relished or repeated.

What a difference 12 months can make! The mood is now very much - "We are where we are and now lets get on with it."

It would, however, be akin to having a rose-tinted view of life to say that everything is fine, there's nothing to worry about and we can all depart at the weekend feeling pretty please with this week's events.

The reality is different. There are still some large concerns that we need to embrace and effectively tackle.

Soros' scorn

Slow economic growth across the European Union and the volatile, sometimes wild gyrations on the currency markets are significant concerns. Let's not forget that we are just little more than three months away from bringing another ten countries into the EU, a move which will itself pose considerable challenges for governments and businesses alike.

Already talk has started on how to deal with the North/South divide.

As if we need to be reminded by George Soros, one of the world's best-known financial experts, when he delivered his speech at the event I hosted on Thursday evening. He is a reality-check personified.

His views on political developments around the globe were as forthright as ever. His thoughts about the current economic cycles in the EU and the US were incisive.

He was very positive about the prospects for the US economy, but not so about the EU's.

Weak dollar

The recent movements on the currency markets expose and compound the economic differential between Europe and the US. Any American acquaintances, new and old, that I have made in the past few days and who intend to travel from here to the eurozone will quickly encounter the effects of the dollar's fall.

A memory that they will take from Europe is "it's a lot more expensive than it used to be" as they file expenses for hotels, taxis and meals. "But it's great for our exports," I hear them counter.

As mentioned in a previous diary, a lot amount of energy is being pumped into the Trans Atlantic Business Dialogue (TABD) by its two new co-chairman, Doug Daft, the head of Coca-Cola, and Niall Fitzgerald, the head of Unilever. I'm encouraged about what they have to say, and I believe that it has a real chance to make a difference and will help to remove non-trade barriers between the US and the EU.

In addition to this informal meeting, I also read Messrs Daft's and Fitzgerald's views and thoughts about the TABD in yesterday's edition of the Financial Times. The fundamental belief they have is that the TABD "should be revived in order to help policymakers on both sides of the Atlantic focus their energies on the many areas of common interest rather than on diplomatic differences".

It really is good to talk, but it must lead to action!

Mike Rake is the international chairman of accountancy and business advisory firm KPMG




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