[EXPLAINER] The Davos alphabet soup
Africa: Khulekani Dlamini highlighted that Africa’s intra-regional trade stands at a very low 13% (of GDP) when measured against figures of 69%, 52% and 50% in Europe, Asia and North America respectively. One of the reasons for the low trade is poor infrastructure network within the continent – chronic shortage of power generation, fragmented transmission lines, ICT broadband infrastructure to facilitate education, drinking and potable water, transport infrastructure.
Business and Community: Gender equality and diversity is not a ‘human resources’ issues but an ‘in-the-line’ business and community issue. SAP sets metrics (how much and by when) and revises practices for example around parental leave. - Steve Singh; member of the executive board of SAP SE and President, Business Networks and Applications.
Diversity: Bank of America reviews diversity metrics monthly and CEO is head of diversity and inclusion. You have to constantly have what BoA calls ‘courageous conversations’ about unconscious biases. - Anne Finucane, Vice Chairman, Bank of America.
Energy: There is no space for any new coal. I have such respect for China who just yesterday cancelled 101 coal plants. - Christiana Figueres, Convenor, Mission 2020.
Free and fair trade: The USA does not want a trade war. We want a process of free and fair trade. - Anthony Scaramucci, Office of the President Elect of the USA.
Gender equality: Blind evaluations, CVs and interviews are being implemented by HSBC, the UK government and the BBC and many more. When blind screenings were introduced in the 70s, to recruit new members of orchestras in the USA, conductors said that it would have no difference as they listened purely to the music. Today, 40% of orchestra’s are populated by women versus 5% before the introduction of blind screening. You need to see people that look like you – seeing is believing. People need role models – it affects what people think is possible for themselves. Of the 50 images of leaders on the walls of Harvard – zero were female. - Iris Bohnet, professor of public policy, Harvard Business School.
Have-nots: A basic income for all was discussed in the context of the vast inequalities. Ideas for funding it included a sovereign wealth fund which benefitted from rents on a country’s resources and intellectual property, akin to Norway.
Inclusive capitalism: is ultimately about re-embracing the purest purpose of business: solving problems and improving people’s lives. - Andrew Liveris, CEO Dow Chemical.
Jein: German for ‘yes and no’. Afrikaans equivalent is ‘ja, nee’ in response to whether the world is moving in the right direction on clean energy. The direction is correct and irreversible but to meet the COP21 targets we need 50% renewable energy by 2020. - Christiana Figueres, Convenor, Mission 2020.
Khulekani Dlamini: CEO of the DBSA, notably absent from his session on Investment in Sustainable Infrastructure. Let’s hope he had a good reason. South Africa may be at Davos flying the ‘Open for Business’ flag but that’s not going to do us any good if when the phone rings, no-one’s around to answer the call!
Line: A basic universal income to help level the playing field and paid to all those below the poverty line could be funded in India by re-arranging existing social security schemes.
Mazibuko: former leader of the opposition in Parliament Lindiwe Mazibuko was on a panel in Davos on how to bridge the urban-rural divide.
Nato: DonaldTrump doesn’t want to disband Nato – his use of the word ‘obsolete’ was more in response to the priorities of Nato – they should be more focused on the threat of radical Islamic terrorism and less on the threat of communism.
Overpriced: Chinese real estate is ‘biggest bubble in history. - Wang Jialin, chairman, Dalian Wanda Group, PROC (China’s richest man at c. $32 billion).
Precariat: Guy Standing, a professor at the University of London, felt his message was getting across about the growing “precariat,” a class of people without job security or a steady income. He said “What I say may not be comfortable, but they are listening now, and they weren’t a year ago.
Quality of life: Sport keeps you healthy and both sport and entertainment spending will grow as amongst those Chinese with money. I expect them to focus more on their health and sport hence why I am investing in sport, tourism and entertainment. - Wang Jialin, chairman, Dalian Wanda Group.
Ramaphosa: our deputy president seemed very proud of South Africa’s renewable energy programme even as renewable energy companies prepared for a court battle with Eskom to protect their investment. A quote from an article on the IOL website read, “In our opinion Eskom cannot sidestep the binding determination of the minister; they are bound by the ministerial determination, which includes signing the power purchase agreements,” said David Unterhalter, a senior counsel at Webber Wentzel.
Roosevelt: Reference was made to Christine Lagarde’s quoting of Franklin D Roosevelt at the 2013 WEF meeting in Davos: "The test of our progress is not whether we add more to the abundance of those who have much but it is whether we provide enough for those who have too little".
Sky-boxification: Corporate boxes at sports games separates people and was corrosive to the building of community spirit. Today, whether through separation in schools (private vs public) we are increasingly witnessing the ‘sky-boxification’ of our communities.
‘Take back our country’: has clear negative connotations but… there may be a positive connotation if it helps re-engender a common sense of national spirit, community and purpose if it is directed towards class mixing in civic spaces. - Michael Sandel, author of What money can’t buy?
USA: In the past 30-years the USA has spent $14.2 trillion on 13 wars. What if they spent a part of that money on building infrastructure and helping blue and white collar workers? No matter how good the strategy you’re meant to spend money on your own people. - Jack Ma.
Vice-president: of the USA, Joe Biden, using that quintessential American expression ‘doubling down’ when calling for bold leadership to tackle inequality and protectionism.
Women: At BoA 40% of the executive management are women, 35% of the ’two-down’ are women’ and 30% of the Board are women. That helps because you start thinking about it more often and you see people that look like you. - Anne Finucane, vice chairman, Bank of America.
Watson: IBM’s centrepiece contribution to artificial intelligence, Watson, is helping to more accurately predict the future. - David Kenny, IBM.
Xi Jingping: was widely criticised following his speech committing to globalisation. One publication noted that ‘China maintains prohibitions on foreign investments even as its companies spend billions snapping up stakes in European companies, sports clubs, airports and other infrastructure. Strict limits on foreign investments often force overseas companies to partner with local competitors and share vital technology. In a report released Wednesday by the American Chamber of Commerce in China, a record 80% of 462 US businesses who replied to a survey said they felt that foreign companies were less welcome than in the past.’
Yodelling: according to Wikipedia “used in the Central Alps by herders calling their stock or to communicate between Alpine villages” Well, the Fourth Industrial Revolution and its implications for connectivity and communication are about as far removed as you could get from yodelling.
Zeitgeist: for the funding of major infrastructure projects is the creation of new funding models given already stretched government finances. World Bank’s Multilateral Investment Guarantee Agency (MIGA) and DBSA are going to be announcing a credit enhancement deal that has been struck to assist in achieving a better cost of funding for infrastructure projects, one that won’t require government guarantees.
Shalin Bhagwan is head of Fixed Income at Ashburton Investments.
For more news, analysis and insights on Davos 2017 go to EWN’s WEF portal in partnership with Ashburton Investments.