Good morning dear readers,
it’s that time again. On Monday around 3000 CEOs, members of the government and representatives of non-governmental organizations travel to the World Economic Forum (WEF) in Davos. And more than ever, the question arises: In a time of increasing nationalism and protectionism, do we still need a forum that has grown through its pleas for free trade and a globalized economy? Do you still have to go to Davos?
I guess so. Because as much as some Davos veterans may complain that the summit isn’t what it used to be, there’s still a lot to talk about.
For example, the question of how globally operating companies can act in a world that is falling apart into power blocs that were believed to be overcome. Or what ways out there are for the European-American trade conflict surrounding the US subsidy program Inflation Reduction Act. And where is growth supposed to come from in times of climate crisis? It is also about the most exciting new technologies. In particular, the breakthroughs in nuclear fusion and quantum computing will play a role in many events.
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We will report on all of this in the Handelsblatt. We will conduct interviews, analyze the most important discussions and of course also report what is happening behind the scenes. By the way, many discussions are available as video streams.
On Thursday I will be with SAP CEO Christian Klein in Davos about the future of the European tech economy. You can follow the discussion here.
In any case, the WEF already set the tone this week, when the forum proclaimed the end of globalization: “The new economic era” could become an era “of growing gaps between rich and poor countries and usher in the first regression in human development in decades”, according to the recently published “Global Risk Report” of the World Economic Forum.
But there is also another reason to go to Davos. I can hardly think of other places where you can talk to so many interesting people who are thinking about the future of this world in such a short time. My calendar is full, often continuously from 7 a.m. to 11 p.m. And yet, as experience shows, there is still room for many chance encounters. Last time, on a gondola ride, I met a group of successful female start-up founders from Ukraine, who built up their companies despite energy shortages and bomb alerts. For me, these encounters are the true Davos moments.
What else is moving us this week:
1. The numbers are currently better than the mood: The German economy grew an astounding 1.9 percent in 2022 – and things are looking much better this year than expected a few months ago. Astonishing, especially in view of the doomsday scenarios of associations and some company representatives.
2. The good economic prospects US economist Nouriel Roubini finds little to gain. In the Handelsblatt interview, he says: “We lived like zombies, sleepwalking towards catastrophes such as climate change or overindebtedness and pushing the solution to problems further and further back.” He believes the world will soon experience “the mother of all debt crises”. You don’t have to share your arguments. But you should know them. After all, he was one of the first to warn of the last global financial crisis – and he was right.
3. The relief in the economy was great, when the federal government announced the gas price brake. But now it is becoming apparent that the hoped-for relief is not reaching medium-sized companies in particular. The reason, you guessed it, is the complicated rules, writes our new colleague Isabelle Wermke.
4. On Monday I got up around five o’clock and then the interview by Thomas Sigmund and Dana Heide was already top news in the radio news: the two had met Wu Ken, the Chinese ambassador to Germany. And the ambassador sharply criticized the China strategy: He had the impression that the federal government was primarily guided by ideology. “This smells suspiciously to me of a Cold War mentality.”
5. There are first indications that how things could continue with the struggling department store group Galeria Karstadt Kaufhof. According to Handelsblatt information, the number of branches is to be reduced and the company organized in a more decentralized manner. Only 40 of the 130 department stores still have a stock guarantee. There is talk of a new strategy. But even that doesn’t offer an answer as to what department stores are still needed for.
6. How is the Russian economy really doing? My colleague Mathias Brüggmann investigated this question this week. And a look at the figures reveals abysses: Microchips and IT hardware in particular are in short supply, and the vehicle and aviation industries in Russia are also missing parts. Conclusion of Russian economists: The system is on the verge of collapse. To make matters worse, Western sanctions are forcing Moscow to sell oil at cheap prices. A heavy blow to Russian state revenues.
7. Another country one that will occupy us even more intensively in the coming months is Saudi Arabia. No other G20 member is currently growing faster. The GDP of the Saudis grew by 7.6 percent in 2022 compared to the previous year. But what I find even more interesting are the country’s plans to get off oil. This extremely exciting look at the country’s figures shows exactly what the plan is and how realistic it is.
8. The stock markets have started the year so well like it hasn’t done in two decades. The prospects are still uncertain. A large analysis shows which values you should pay attention to: Our investment team has evaluated more than 2000 assessments by analysts and, on this basis, created a ranking with the experts’ “top picks” for the year 2023. These are the ten favourites.
9. Maybe you have too received one of those menacing-sounding calls: “Hello, this is Interpol. Your identity is being misused for fraudulent purposes. For more information, please press one,” can be heard on the recorded announcement in English. Anyone who followed the request set a fraud machine in motion, which in the worst case could become very expensive. In some cases, a call center in the Indian capital New Delhi is behind the scam. In the weekly column Asia Techonomics, Asia correspondent Mathias Peer writes that it is not only thanks to investigators that suspected backers were caught.
I wish you a nice weekend.
Editor-in-Chief of the Handelsblatt
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