- Volatile U.S. presidential race worries business leaders
- `Hopefully it will get sane,' Swedish telecom chief says
The collapsing center of U.S. politics poses a growing threat to global business, according to Davos delegates who say they’re watching anxiously as Donald Trump and Bernie Sanders ride a populist wave in the presidential election.
“Trump is right now busy chasing the Mexicans,” T.K. Kurien, the chief executive officer of Indian information-technology services firm Wipro Ltd., said in an interview at the Swiss mountain resort, where the World Economic Forum meets this week. “But after he finishes with the Mexican story, I am pretty sure he’ll train his guns on us.”
Wipro gets about half its revenue from the U.S., much of it from outsourcing for large companies. Kurien said he’d be equally concerned if Vermont senator Sanders, a self-proclaimed socialist seeking the Democratic nomination on a platform of reining in corporate power, were to win the presidency in November.
The turbulent American election season is near the top of a long list of concerns weighing on the 2,500 corporate executives, political leaders, and financiers at this year’s gathering in Davos. With less than two weeks before voting in primaries gets under way, Trump has led the Republican field for months, while polls show Sanders is catching up with Democratic front-runner Hillary Clinton.
As usual, Trump is grabbing the most attention, even though the real-estate magnate’s blond mop and booming voice aren’t among the sights and sounds in Davos this year. His dominance of the race for the Republican nomination has attendees fretting that appeals to xenophobia and protectionism are taking hold in the world’s largest economy.
Trump has endorsed a “temporary” ban on Muslims entering the country and the building of a wall on the Mexican border. He rails at the loss of U.S. jobs to overseas competitors, and on Tuesday said that as president he would “get Apple to start building their damn computers and things” in the U.S., instead of China.
While political change is essential, Trump is offering the wrong kind, according to BlackRock Inc. founder Larry Fink.
“For those constantly focused on re-election and nothing more, we need a revolution,” Fink, a major donor to past Democratic Party campaigns, said Wednesday in Davos. “Unfortunately, now the revolution may be Donald Trump.”
‘Amount of Anger’
If Trump has grabbed the most headlines, the rise of Sanders is “almost more stunning,” according to Stephen Schwarzman, chief executive of Blackstone Group LP. In Iowa and New Hampshire, the first two states to vote, the Vermont senator is running neck-and-neck with Clinton or ahead of her, according to recent polls.
“What’s remarkable is the amount of anger, whether it’s on the Republican side or the Democratic side,” Schwarzman told Bloomberg Television in Davos.
Anti-establishment candidates are making inroads because “Middle America has lost faith in the economy,” said Tim Adams, head of the Institute of International Finance, and a U.S. Treasury official under the George W. Bush administration. That “leads people to extreme options and outcomes.”
While the U.S. economy has recovered faster than other developed nations from the global slump of 2008 and 2009, wages haven’t kept pace with a rebound in corporate profits. That’s helping candidates like Trump and Sanders who say the system is rigged against average Americans.
Johan Dennelind, head of Swedish phone giant TeliaSonera AB, called the current phase of the presidential contest “fascinating” -- but said he hopes it won’t last too much longer.
“It’s hugely important that you don’t get this populism to spread on too large a scale. It’s not just bad and ugly, it can be dangerous,” Dennelind said in an interview in Davos. “Hopefully it will get sane leading up to the real race.”
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