Australia Markets open in 7 hrs 4 mins

Cautious optimism as global elite gather in Davos

Richard Carter
South African actress Charlize Theron speaks after receiving an award at the Crystal Award Ceremony of the World Economic Forum (WEF) at the Swiss resort of Davos on January 22, 2013 . The world's political and business elite kicked off their annual Davos meeting in a spirit of guarded optimism that the worst of the financial crisis might finally be over.

The world's political and business elite kicked off their annual Davos meeting on Wednesday in a spirit of guarded optimism that the worst of the financial crisis might finally be over.

Over the next four days, around 45 world leaders will rub shoulders with some 2,500 lobbyists, journalists, captains of industry and economists in the picture-postcard Swiss ski resort for the World Economic Forum (WEF).

And while the 2012 meeting was dominated by the euro crisis and fears Greece could be forced out of the eurozone, this year's gathering appeared to be marked by a feeling the global economy may be turning the corner.

At the opening panel of the meeting, the deputy head of the International Monetary Fund, Min Zhu, drew a contrast between today's mood and that of last year's forum.

"At this particular moment, things are much better than 12 months ago. A year ago here, we were really concerned about the euro crisis, the US fiscal cliff," said Zhu.

"With all the policy actions, much has calmed down now but we've got to be very careful," added the official.

And JP Morgan Chase CEO Jamie Dimon said he felt the banking industry was beginning to turn the page on its difficult recent history.

"I think the industry has to come back from the past. I think a lot of companies are doing fine. Banks continue to expand and lend," he said.

Nonetheless, officials and bankers warned that volatility could easily re-erupt, especially if regulators failed to learn the lessons of the past financial crisis.

"If we do everything right, we will get out of this. If we don't, this could last another 10 years," said Dimon, one of the world's top bankers.

Another top banker, Axel Weber from Swiss giant UBS, told reporters: "The economy has turned, most of the markets have picked up... the major economies are recovering, but it is a recovery that is slow and muted."

"In particular, one dimension is missing. Jobs are lost and are not coming back quickly," added Weber, a former head of the German central bank.

The first world leader to address the forum, Russian Prime Minister Dmitry Medvedev, was also in bullish mood, telling the assembled elite that his country grew 3.5 percent last year and aimed for five percent growth annually.

Other leaders due to address the forum include German Chancellor Angela Merkel and Italian Prime Minister Mario Monti.

-- 'Last thing we need' --


Britain's David Cameron will speak on Thursday, fresh from committing Britain to a referendum on EU membership by the end of 2017 if his party wins another term, which drew dismay from one of Britain's top business executives.

"It's at best neutral and at worst negative. So it can't be positive," said Martin Sorrell, chief executive of advertising giant WPP.

"You just added another reason why people are going to postpone investment decisions and the last thing we need is people postponing more."

Other top speakers are European Central Bank President Mario Draghi, who will speak on "challenges for the years to come", and the head of the International Monetary Fund, Christine Lagarde.

Every year events conspire to hijack the agenda and this year is no different, with the conflict in Mali and the crisis in Syria poised to exercise the minds of the global elite.

Jordan's King Abdullah II was due to make a special address and the premiers of Egypt, Lebanon, Libya, Tunisia and the Palestinian Territories were scheduled to attend, as well as Israeli President Shimon Peres.

There is also a heavy African presence, with the leaders of South Africa and Nigeria attending a session on "de-risking" the continent on Wednesday.

Despite the presence of so many world leaders, no formal decisions are taken at Davos, although corporate deals are often sewn up on the sidelines and presidents and prime ministers huddle in small gatherings to thrash out pressing issues.

The invitation-only meeting is also known for its informal luncheons and lavish cocktail parties, often hosted by corporate sponsors and with exclusive guest lists, where political and business leaders can network and mingle.