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Twenty Top Takeaways from Davos 2011

  1. Twenty Top Takeaways from Davos 2011
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    Twenty Top Takeaways from Davos 2011

    As citizens took to the streets in Egypt, the economic elite took to the mountains of Switzerland to make deals and discuss the issues of the day. In Davos on Jan. 26-30, the emerging economies and the social networks had four days in the spotlight, while the rising food costs that helped lead to social unrest in Tunisia and Egypt were a major topic. Big Oil and Big Business showed renewed vigor and power as emerging economies showed increased demand for energy, technology, and food. The BRIC countries sent more executives and leaders to the World Economic Forum than ever before and the makeup of attendees reflected the big picture: the West crippled with debt as emerging economies grow.

    Read on for the most important themes and outcomes from the 2011 World Economic Forum.
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  2. Game Over for the West
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    Game Over for the West

    With debt loads crippling Western economies and the possibility of a second European bailout looming, more executives from emerging markets attended Davos than ever before. There would be about 365 executives from the BRIC countries and other emerging economies, Bloomberg reported. Growth in BRIC countries is high, though volatile, as dealmaking has shifted toward executives and diplomats from those countries. Announcements like Medvedev's, that Russia would set a 10 percent growth target, were watched closely.
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  3. Inflation in China and India
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    Inflation in China and India

    The rising costs of energy and food could be the catalyst to cause inflation to spiral out of control in emerging markets, especially India and China. In those countries, food prices have a significant effect on inflation because food accounts for 47 percent of India's consumer price index and 34 percent of China's. Inflation is the biggest concern in the so-called two-speed economy, in which Western countries struggle to grow and emerging markets boom. Bloomberg reported that International Monetary Fund Special Adviser Zhu Min said emerging economies will have to raise interest rates, hurting growth.
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  4. Another European Bailout
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    Another European Bailout

    The European debt crisis was a cause for concern at Davos, as International Monetary Fund First Deputy Managing Director John Lipsky said the organization might have to aid peripheral European countries. A Bloomberg poll released on Jan. 25 showed that investors predict a nation will leave the euro area by 2016, and that both Greece and Ireland will default on debt. In the midst of it all, German Chancellor Angela Merkel publicly disagreed with Deutsche Bank Chief Executive Officer Josef Ackermann about how the costs of future bailouts will be distributed.
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  5. Crisis Angst Fades
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    Crisis Angst Fades

    Even with talk of another European bailout, fears of a severe debt crisis faded. Billionaire investor George Soros said the "euro crisis is on the way to being solved" with the creation of a permanent central treasury. France's Finance Minister Christine Lagarde urged investors not to short the euro zone. Bumps on the road are expected, but few now expect a breakup of the European economic zone. As one Bloomberg report put it, bankers went to Davos ready to party.
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  6. Triumph of the iPad
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    Triumph of the iPad

    The dominance by the iPad of the tablet market was table talk in Davos. Lenovo Group Chairman Liu Chuanzhi said he expected Lenovo's LePad tablet and LePhone to keep Apple at bay in China, where Lenovo is king of the personal computer. Bloomberg's London Bureau Chief Mark Gilbert noted the ubiquity of the iPad at Davos, in a Davos Diary column: "BlackBerry Addiction Stays in iPad Fans."
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  7. Deficits and Spending a Global Risk
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    Deficits and Spending a Global Risk

    As the WEF got under way, Moody's Investor Services said the U.S. government's Aaa bond rating may change to a "negative outlook" due to the deficit. Executives and economists at Davos said Obama's deficit cuts were not deep enough. On the other hand, U.K. Prime Minister David Cameron defended the deep cuts he has proposed to the budget that are intended to narrow the deficit. Onstage at Davos, JPMorgan Chase Chief Executive Officer Jamie Dimon said the biggest risks to the global economy were spending and deficits.
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  8. North African Unrest
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    North African Unrest

    Davos took place in the mountains of Switzerland even as protesters took to the streets in Cairo. German Chancellor Angela Merkel called for an end to the violence in Egypt and Senator John Kerry told Bloomberg it is important for the Egyptian government to "exercise as much restraint as possible." A large part of the unrest is due to rising food prices in the country, another hot topic of conversation at Davos, as delegates warned that food prices could cause civil destabilization to spread.
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  9. Rising Food Costs
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    Rising Food Costs

    One of the biggest themes at Davos was how rising food costs helped lead to instability in Egypt, and sparked concerns about inflation in China and India. New York University economist Nouriel Roubini told Bloomberg's Tom Keene that food costs are leading to riots and instability. Roubini said: "It's really something that can topple regimes." It's not just food; Bloomberg's Mark Gilbert reported that at least 100 attendees at Davos gathered to discuss water, with part of the conversation revolving around how to invest in and sell water.
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  10. Tech Bubble
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    Tech Bubble

    Though few believe a second tech bubble would be as bad as the dot-com bubble in the late '90s, concerns about a bubble were aired and discussed at Davos. Hewlett-Packard Chairman Ray Lane said some of the valuations are "frothy," and Dell Chief Executive Officer Michael Dell said there was a "striking disconnect" between old and new tech companies. Google's outgoing CEO, Eric Schmidt, got into the mix as well, saying, "the e-commerce space feels overheated because valuations are based on long-term revenue expectations."
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  11. Green Energy Bleak
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    Green Energy Bleak

    While green energy was paid a lot of lip service, a whole lot more talk at Davos focused on coal and oil prices. Bloomberg columnist Mark Gilbert reported on a panel led by Fatih Birol, chief economist at the International Energy Agency, that left attendees with something of a bleak view for renewable energy. Despite a push for renewables, China and other emerging economies will fill most energy needs using coal and other fossil fuels, even as the energy search depletes food and water resources globally.
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  12. Energy Policy Key
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    Energy Policy Key

    Energy prices were one of the conference's major themes, as inflation fears and civil unrest in Africa stemmed from the cost-of-living increases brought on by food and fuel prices. Executives from big oil companies, such as Royal Dutch Shell's Peter Voser, warned of higher oil prices.
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  13. China's Exports
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    China's Exports

    China's exports are expected to rise in 2011, as demand returns for Chinese goods in the West. Economic leaders at Davos discussed the trade imbalances that could be exacerbated by China's exports. IMF adviser and former deputy governor of the People's Bank of China Zhu Min told Bloomberg that trade imbalances on Chinese exports could be problematic for global stability.
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  14. Anti-Capitalist Protests
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    Anti-Capitalist Protests

    Security was tight this year after protesters disrupted the WEF last year. The 2011 protests were tame but that could be expected with snipers on the roofs, as Davos now takes on a fortress mentality, complete with barbed wire, during the forum. Still, at least some demonstrators got through the outer perimeter of security to get into town. On one day, police used water cannons and armored vehicles to turn protesters away, according to the BBC. In Brazil, thousands of activists attended the World Social Forum as a protest against the World Economic Forum, according to The Guardian.
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  15. Bankers in Driver's Seat
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    Bankers in Driver's Seat

    Bankers were back in the driver's seat at Davos. While an early meeting of top bankers sparked a warning from lawyers, the industry emerged bearing an olive branch for regulators, saying there was common ground for regulatory policies. It wasn't all peaceful: Jamie Dimon, chief executive officer of JPMorgan Chase, traded barbs regarding regulation with French President Nicolas Sarkozy.
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  16. Japan Frees Trade
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    Japan Frees Trade

    With the country suffering under a major debt load, Japan's Prime Minister Naoto Kan gave a major speech at Davos. He pledged to free trade and join the U.S.-led Trans-Pacific Partnership, With the country suffering under a major debt load, Japan's Prime Minister Naoto Kan pledged to free trade and join the U.S.-led Trans-Pacific Partnership, according to a report by Bloomberg.
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  17. Big Business Comeback
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    Big Business Comeback

    Among the most-discussed articles at Davos was Andrew Ross Sorkin's story about the cost of attending the forum. If nothing else, the story highlighted the fact that it costs tens of thousands of dollars, if not hundreds of thousands, to attend, putting it beyond the reach of all but the wealthiest individuals and companies. Following years of recession, Big Business seemed healthy enough to network during the day and party through the night.
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  18. Russia Competes with China and India
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    Russia Competes with China and India

    As the BRIC countries showed more power at Davos this year, competition among the BRIC leaders increased as well. Russian President Dmitry Medvedev, who gave the keynote at Davos, told Bloomberg Television that he set a Russian growth target of 10 percent: "Our growth of 4 percent isn't bad compared with the U.S. and Europe. But that's not enough for what's called an emerging market. That's why we need to grow 8 to 10 percent a year."
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  19. Social Networks Are King
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    Social Networks Are King

    With the prospect of a Facebook IPO looming, not to mention an Oscar or two for the movie that purports to tell the company's origin story, the social networks arrived in Davos as near celebrities. Sean Parker, the founder of Napster, was in the crowd. Representing Facebook were Chief Operating Officer Sheryl Sandberg and Mark Zuckerberg's sister Randi, who does marketing for the company, according to The Economist. Amid the hero worship was the possibility, however remote, that Facebook and Twitter may have played some kind of role in the uprising in Cairo. The hype, however, also led to speculation and comments about a second tech bubble.
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  20. Renewed Push for Doha Agreement
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    Renewed Push for Doha Agreement

    Key trade officials used Davos to talk up getting the Doha trade agreement moving after a decade of negotiations. The U.S. and China still stand in the way of a deal, so Doha is likely to stall further if negotiations stretch into 2012, a U.S. Presidential election year. That's part of why numerous leaders called for an agreement this year. German Chancellor Angela Merkel cautioned that holding back an agreement in 2011 could stall Doha for decades, according to the Associated Press.
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  21. Hollywood Stays Home
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    Hollywood Stays Home

    In the past it wasn't uncommon to see movie actors like Michael Douglas, Richard Gere, and Angelina Jolie wandering the halls at the WEF. But this year—with the exception of perennial regular, Irish rocker Bono—the stars stayed home. The one movie star scheduled to make an appearance, Robert De Niro, who was on the programs at Davos, pulled a no-show, according to The Atlantic.
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