Inequality On Display At Davos

Lobster In The Mountains, Riots On The Nile

(Reuters) - The global elite, dining on Norwegian lobster and reindeer at the end of the World Economic Forum on Saturday, felt pretty chipper despite growing concerns about the inequality of the economic recovery.

While they believe the global financial and euro zone debt crises are abating, the real world intruded with a different and much more acute crisis in Egypt that made their debates about inequality and food security less theoretical than anticipated.

This year's four-day talkfest in the Swiss mountain resort of Davos was a fragmented affair.

The issue expected to dominate discussion, the euro zone debt crisis, turned out to be a relatively damp squib, with a growing consensus among bankers and policymakers that a resolution of the issue may be near.

If there was one common strand in Davos this year it was growing divisions -- whether between fast-growing emerging markets and sluggish developed world economies, or between rich and poor within countries.

As residents in Cairo and Alexandria counted the cost of a further night of clashes between protesters and police on Saturday, politicians and business leaders urged Egyptian President Hosni Mubarak to start a dialogue with his people.

The corporate world is nervous.

Egypt has, after all, been one of the darlings of African and Middle Eastern investors, and the world is stepping into unknown territory with the rapid spread of unrest from country to country, propelled by the Internet and mobile technology.

LESSON OF EGYPT

"The lesson from Egypt is clear: people will no longer accept oppression, particularly when oppression is married with rising food prices, a lack of employment and the destruction of hope for a young generation," Sharan Burrow, general secretary of the International Trade Union Confederation, told Reuters.

Yet the mood among 2,500 business leaders and policy-makers in Davos was still predominantly positive, albeit tempered with caution after the worst economic slump in 75 years.

"Compared to last year and the year before, there is certainly much greater confidence about stability, more optimism about the global economic outlook," said the International Monetary Fund's first deputy managing director John Lipsky.

For many CEOs and bankers, there is simply the reassurance of having put yet another year's distance between themselves and the collapse of Lehman Brothers in 2008, which brought the world economy to the brink.

As a result, the panicky mood evident at the last two annual meetings in Davos has evaporated and business bosses are starting to look again at spending the trillions of dollars of cash sitting on their balance sheets.

"It is quite obvious that the mood has changed. Everybody is much calmer," said Swedish Finance Minister Anders Borg.

"You see it in the meetings, without people speaking on their telephones or leaving the room or having to stand in the corner, having very difficult conversations."

As ever, this year's Davos was an eclectic mix, covering everything from macroeconomics to geopolitics to management theory to science.

But there was no single, dominant theme -- and Adair Turner, chairman of Britain's Financial Services Authority, reckons that, perhaps, is the most encouraging sign of all.

"It is a thoroughly good thing because when the world gets gripped by one big theme it usually either means there's a big disaster or else people are getting in the grip of some new irrational exuberance," he said.

(Additional reporting by Emma Thomasson and Dmitry Zhdannikov; editing by Michael Stott and Mark Heinrich)

Copyright 2010 Thomson Reuters. Click for Restrictions.

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