Page last updated at 08:36 GMT, Thursday, 28 January 2010

Davos 2010: Day two as it happened

Jacob Zuma at World Economic Forum, Davos

By Adrian Dalingwater


LIVE TEXT COMMENTARY (All times GMT, CET -1)

Thanks for following our coverage of the second day of the World Economic Forum. More big names and big issues tomorrow. Bill Gates will kick off the proceedings in a session - also set to feature Zimbabwe's Morgan Tsvangirai - about the Millennium Development Goals. And in the afternoon, Google boss Eric Schmidt will feature in a discussion about how technology can help development, education and healthcare delivery. Follow us on Twitter

Robert Peston
1800BBC business editor Robert Peston writes: The private gathering of senior bankers, insurers, hedge fund magnates and so on appears to have collectively concluded:

1/ The global economy remains pretty fragile - and prospects are particularly poor for the heavily indebted economies of the West (a big hello to the UK and US)

2/ There is a meaningful risk of sovereign debt crises in economies with large and rising deficits (you know who I mean - though to be clear, the bankers did not mention the UK by name)

3/ They do not believe that President Obama will succeed in his plan to limit the size of banks or force them out of speculative trading for their own account. Read Robert's blog in full.

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Nik Gowing tweets: New Greek PM Papandreou tells me on air; 13% debt down to EU level of 3% in 3 yrs. Gravity defying! Rejects rumours of EU bail out. Read Nik Gowing's tweets

Tanya Beckett
1725 Tanya Beckett explains why Thursday's talks in Davos have been a "little frustrating".


Bridget Kendall
1718BBC's Bridget Kendall writes Canadian Prime Minister Stephen Harper just announced that in his view there does remain a view for G8 as well as G20 (Canada hosts both this summer). Even if G20 now deals with economy, he argues, G8 can still tackle terrorism, piracy, climate change and the spread of nuclear weapons. Hard to see how without China. But G7/G8 has always offered a seat at the top table Canada has particularly treasured.


1719 Mexico's President Calderon gives his analogy for the climate change debate: we're all in the same plane...and the problem with our plane is the pilot's collapsed and the economy class and first class are arguing about who to send up to replace him.

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Tim Weber tweets: Worried about social unrest in China? The Gini coefficient (measuring inequality) for China is exactly the same as for the US. Read Tim Weber's tweets

1702 Canadian Prime Minister Stephen Harper distances himself from hard-liners in the banking reform debate by warning against excessive regulation of the financial sector.

Stephanie Flanders
1700BBC economics editor Stephanie Flanders writes: There was much talk in the corridors about the Greek debt crisis - and whether President Sarkozy had any chance of forging "a new Bretton Woods", but top of the agenda was China. Everyone wants China to play by global rules, rather than go its own way - and revalue its currency as a first step. But in their public remarks today, Chinese officials gave little indication of wanting to play ball.

Bridget Kendall
1646BBC's Bridget Kendall writes Compare and contrast: Bill Clinton in front of a packed Davos crowd projecting the power of charm and persuasion; and the Chinese vice-premier just now at the same podium projecting the power that comes with size and an 8% annual growth rate. Li Keqiang strode onto the stage with the self-assured and lingering wave of a man who sees himself as a political superstar.

1642 South African Finance Minister Pravin Gordhan says his country's economy is fairly buoyant.

1543 E.On chief executive Wulf Bernotat tells the BBC: "I don't think that Russia is using gas as political weapon."

1542 UK Conservative leader David Cameron concedes there is a risk to the economy if cuts in public spending are too big or introduced too quickly, in an interview with the BBC's business editor Robert Peston. But he sticks to his commitment to start cutting public spending this year if the his party wins the election.

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SarahOnAQuest tweets: @davos China needs to let their currency appreciate, too! Read SarahOnAQuest's tweets

1525 How do you turn China into a nation of spenders? That's what WEF founder Klaus Scwab wants to know. Mr Li agrees with the importance of this for China's growth - he gives the example of subsidising farmers' purchases of home appliances such as colour TVs and fridges.


1515 Li Keqiang's check list for development: 1. Global economic co-ordination. 2. Promote more open markets. 3. Tackle poverty. 4. Tackle global challenges like climate change together, and, 5. Global corporate governance - reform international institutions.

1502 Li Keqiang is also talking about improving domestic demand and says boosting it further is the government's focus. Also a lot of emphasis on green credentials and how they are upgrading to greener and cleaner technology.

1458 Li Keqiang, executive vice-premier of China, says the country has developed fast but still needs to raise living standards in the more rural central and western regions.

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Nik Gowing tweets: Just seen Bill Clinton walking along Davos main street in suit, no anorak, talking with usual gusto, ignoring the heavy snow falling. Nick Gowing's tweets

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Evan Davis tweets: Richard Thaler, behavioural economist in #Davos is advising UK Conservatives on replacing regulation with "nudge". You'll hear him tomorrow on @r4today . Read Evan Davis's tweets

1431 Bringing the session to a close with a rallying call, European Central Bank President Jean-Claude Trichet urges other bankers to do their job of financing the real economy - at the expense of profits, bonuses, everything else. Money should be put towards strengthening their balance sheets by "all possible means", he says.

Greek, Spanish and Latvian leaders
Greece, Spain and Latvia defended the eurozone's record during the afternoon session

e-mail sent in by reader
Nadim Gol, Jeddah, Saudi Arabia says: It's high time the world looked at an international monetary system. Today currency represents the unit value of each country on the international market instead of having a stable universal value. What do you think Davos will achieve this year?

1424 Spanish PM Jose Luis Rodriguez Zapatero insists the EU is not going to give up its model of social protection. "We want to be the most competitive economy in the world...but NOT to the detriment of social cohesion," he says.

1419 George Papandreou talks of "speculation" and "outside actors" who do not like the euro and have targeted countries such as his that are seen as the "weak link" in the bloc. But he describes Greece's debt problems as "homemade", adding: "We Greeks see it as our problem to put our house in order. Greece blames itself, not the EU." He also proposes the idea of the European Union government bonds, rather than each nation having its own public debt.

1411 Greek Prime Minister George Papandreou says European governments should have co-ordinated their responses to the economic crisis better. It would have ensured a better outcome, he says, not least for his country.

Tanya Beckett
1405BBC's Tanya Beckett writes: There's such a lack of consensus on banks it must be hard for corporates to know what position to take. The boss of Pepsico tells me she thinks there is a lack of trust in CEOs that she is battling to win back.

1357 Latvia has gone from being one of the highest growing to fastest falling economies, but President Valdis Zatlers says the country is ready to fulfil all the criteria for eurozone membership.

1349 Spain's Prime Minister Jose Luis Rodriguez Zapatero, highlights the resilience of Spain's banking system, talking about the fact that it has been advising Britain. He says Spain's banking system "has proved to be quite resilient because of the measures in place already... of course, there will be some restructuring in small and medium-sized banks after the crisis."

1345 The big eurozone session is just beginning. Greece's prime minister says he has understandably been in demand at this year's meeting, with all of the the interest in his country's economic woes. He is upbeat though on its prospects for turning things around, with the help of some major reforms.

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Tim Weber tweets: In #WEF session on information age and human behaviour: you can't stop the "flu" of how people use new technologies (e.g. Twitter). Read Tim Weber's tweets

1330 If you want to know which topics are dominating the sessions at Davos, take a look at this word cloud

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Tim Weber tweets: In debate on India's role in the world, Sir Martin Sorrell is fishing for work: "Clearly there's a need for a major branding campaign." Read Tim Weber's tweets

1250 Ahead of his appearance on the main stage, the Greek finance minister has denied reports that his country had struck a deal with China to buy its bonds. Fears that Greece would be unable to repay its massive debts have rattled markets in recent weeks and the China rumours had raised hopes. The reports were "completely ludicrous" he said, but confirmed he would be going to China "at some point".

1222 There are two big sessions coming up this afternoon and it's no surprise that one of them features a senior Chinese figure. Li Keqiang, Executive Vice-Premier of the State Council of the People's Republic - to give him is full title - is giving a special address at about 1440. There will also be a lot of interest in the event at 1330 featuring senior figures from some of Europe's hardest-hit economies, including Greece and Latvia.

Li Keqiang
Li Keqiang had a private lunch with World Economic Forum founder Klaus Schwab

1220 Meanwhile, in an interview with Reuters, British Chancellor Alistair Darling has said that breaking up banks is not the answer to avoiding future crises. He said he wanted to see more detail about President Obama's plans but added: "The large bank/small bank division again experience shows does not answer the question of Lehmans."

1218 Another contribution to the banking reform debate. Julian Oram, head of policy at the World Development Movement, says: "It's absurd for bankers to be up in arms about regulation given the damage they've caused, but it's encouraging us to campaign harder. This is an industry that generates $50 trillion worth of transactions a year. Taxing just a tiny fraction of this would slow down the financial roulette wheel and generate billions of dollars in public revenue that could be of huge benefit to society in both rich and poor countries."

1215 And you can see Bill Clinton's appeal for aid to Haiti here.

1154 George Soros tells the BBC's Robert Peston bailed-out banks are wrong to have paid out bonuses.

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Tim Weber tweets: So after yesterday's bankers' bashing at the #WEF, today everybody talks about India and China and India and China and India and China and... Read Tim Weber's tweets

Tanya Beckett
1140 The BBC's Tanya Beckett in Davos says she's not hearing anything like consensus on how to regulate the banking and financial industry.

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Evan Davis tweets: Howard Davies at Davos baffled because his blog for the FT was wrongly given John Gapper (@gapperblog) by-line in the paper today. Read Evan Davis' tweets

1130 The issue of how to reform the banking sector is dominating high-level meetings on the sidelines. UK trade minister Mervyn Davies tells us he had breakfast with Deutsche Bank chief Josef Ackermann. They discussed their concerns that President Obama's reform proposals could mean parts of banking - the riskier investment bits - move to unregulated parts of the industry.

1123BBC's Kristina Block writes: Very moving speech from Clinton about Haiti. But where is the money, where are the big pledges to help, invest, jobs?


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HM Treasury tweets:The Chancellor is attending the World Economic Forum in Davos, Switzerland Read HM Treasury's tweets

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WEF tweets: It is important that there is quick investment in Haiti, so that people see there is hope for them. Amorim, ForMin Brazil Read WEF's tweets

Bill Clinton at Davos Haiti session


1104 Don't forget this is Davos..."Haiti is wide open for business," says Denis O'Brien from Digicel, the company helping to rebuild the country's telecoms network.

1102 Bill Clinton, quite passionate now, says: "Don't tell me this country can't rise from the ashes."

1052 Bill Clinton is kicking off the special session on Haiti... he says the people of Haiti behaved "magnificently" but adds: "We need to get a distribution network up to get the food and the water out. If there's anybody who knows where I can get pick-up trucks or something slightly bigger, I need 100 yesterday." Business leaders at the forum are told they be able to sign up for action at a special Haiti desk in the congress centre.

And staying with the subject of emerging powers, BBC economics editor Stephanie Flanders writes: It's "decoupling" day in Davos. Or that's how it feels. Everyone's talking about the eastward shift in the balance of global economic power - and China, especially, as the key engine of global growth in 2010.
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Anand Mahindra tweets: China attracts highest attention here at Davos despite its sparse business presence. Vice-premier Li Keqiang has all CEOs' rapt attention! Read Anand Mahindra's tweets

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Tim Weber tweets: At #wef, sitting next to me an Indian MP, a top IMF official and a famous economist discuss whether India should open up to free trade. Read Tim Weber's tweets

1024 Klaus Schwab, the founder of the WEF, sounds the death-knell for rich nations making decisions among themselves. He remarks that in 2011 France will take over the leadership of the G20 and G8 at the same time, providing the opportunity to merge the two forums.

1020 South Africa's President Jacob Zuma is asked about his many wives... to laughter in the audience (and from him), he says he treats all his wives equally and that it is important to respect different cultures.

1017 Speaking at the session on the economic outlook for South Africa, President Jacob Zuma says his country has adopted a "culture of participation" in which no-one is excluded, and that "white flight" has been exaggerated.

1008 South Korea will become the first non-G8 country to hold the presidency of the now-crucial G20 global negotiating forum next year. Its President, Lee Myung-bak, echoed French President Nicolas Sarkozy's comments from last night, saying banks needed to be more "ethical". He said: "We need sound and healthy changes. Financial institutions need to take the initiative in reforms."


1000 Robert Peston asks George Soros about his views on investing in the UK - remember he made billions in the early 1990s betting on the fall in sterling. He wouldn't comment directly as he said he didn't want to influence the markets. But he did say the UK faces "a very bleak outlook" as the financial sector has weighed so heavily on the economy.

e-mail sent in by reader
Paul, London says: If 'Lehman Sisters' only hired women, chances are they'd hire women with the same aggressive traits associated with males. Tackle the root problem, which is in the culture of banks. What do you think Davos will achieve this year?


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WEF Davos tweets: Concluding Doha Development Agenda before end of 2010 should be given highest priority - Lee Myung-Bak, South Korean President, Chair 2010 G20 Summit Read Davos' tweets


0943 Financier George Soros tells the BBC there is still a long way to go to make the banking system safe. But he says there is no rush. The crisis of 2008 is not going to be repeated for the next 50 years or so - so we have time to correct the system.

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Tim Weber tweets: Forget about Europe, forget the USA: The new trading bloc runs from East Asia through Middle East and Africa to LatAm - says HSBC Read Tim Weber's tweets

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Queen Rania tweets: WEF theme: Rethink. Redesign. Rebuild. MY theme for #WEF: Education. Education. Education. Are our themes synonymous? Read Queen Rania's tweets

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Amarina tweets: In future business models we not only need greater ethical thinkers, but also moral doers in business as well as in politics. Read Amarina's tweets


0919 A difference of opinion in the session on energy. Total's boss Thierry Desmarest said the problem of peak oil - when the point of maximum extraction is reached - is still an issue. But his Saudi counterpart, the head of Aramco, Khalid al-Falih, said the whole issue "was behind us".


e-mail sent in by reader
Marcel, San Francisco, US, says: Participants should discuss how to fully integrate women. Women are an essential part of economic recovery but when they are treated as a special interest group, maximum growth is not achieved. What do you think Davos will achieve this year?

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David Brain tweets from the rebuilding trust session: "Would Lehman Brothers have happened if it had been Lehman Sisters?" question from the floor. Read David Brain's tweets

0900 Rebuilding trust session can't get away from the bonus questions... KPMG's Timothy Flynn says bankers HAVE changed their behaviour - Britain's Trade Union General Secretary John Monks looks sceptical immediately, saying: "What about the bonuses?"


e-mail sent in by reader
Chinoy Mathew, Bangalore, India, says: Obviously we're going to hear talk about rethinking capitalism as Nicolas Sarkozy has suggested. I hope they'll look at ways to prevent bubbles forming without making governments overly intervening. What do you think Davos will achieve this year?

0851 The Rebuilding Trust in Business Leadership session is under way... Eckhard Cordes, chief executive of the major German retailer Metro, wants to remind politicians that they are not better than businessmen at running companies - appreciative as business is for their help "when the house was burning".

Snow in Davos
Davos is a swiss ski resort. So no surprise then that it is snowing.


0845 Coming up this morning at Davos: we're waiting to hear from Bill Clinton, the first so-called "big name" speaker, at a special session on Haiti; elsewhere, South African President Jacob Zuma will be talking about the economic outlook for his country, which later this year will be hosting the football World Cup.

Tim Weber
0831BBC's Tim Weber in Davos writes: It's snowing in Davos. In fact, it's snowing so much that a brief walk outside makes participants look like little snowmen. The snow may also help to clear the minds of those among the Davos crowd who partied a bit too long on Wednesday night.

Having said that, on the evidence of the first night this year the parties appear to have been scaled back yet again. They're smaller and less lavish. It's an austere Davos, befitting the economic crisis. Ok, ok ... austere is a very relative term for the millionaires here, but corporate hospitality budgets seem to have been trimmed at the edges.

Today Davos really gets under way. There are tight clusters of people around the terminals where participants can sign up for sessions, and many are already full to capacity. One disgruntled chief executive complained to me: "There are just too many people here. I pay $50,000 to come here and can't even get into the sessions where I want to go."

0830 Welcome to the second day's coverage of the World Economic Forum in Davos.



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