Davos Lightning Round: Where Do Good Policy and Good Business Align?

International Monetary Fund (IMF) Managing Director Christine Lagarde   gives a speech during a session of the World Economic
International Monetary Fund (IMF) Managing Director Christine Lagarde gives a speech during a session of the World Economic Forum Annual Meeting 2013 on January 23, 2013 at the Swiss resort of Davos. The World Economic Forum (WEF) will take place from January 23 to 27. AFP PHOTO / JOHANNES EISELE (Photo credit should read JOHANNES EISELE/AFP/Getty Images)

Today I'm going to zap around the world a bit, outlining some global trends that are areas of opportunity, both for promoting the World Economic Forum's commitment to "improving the state of the world" and for businesses' bottom lines. And of course, with great opportunity comes great risk. I'll touch on a bit of that too. And I'll provide links to more material from me and others wherever possible in case a topic should pique your interest. Here goes.

Lagarde world tour

For a trip around the world, there's no better place to start than with a recap of the NYSE dinner here in Davos last night. The format was as follows: The very sharp and friendly Andrew Ross Sorkin moderated a discussion about global issues between IMF chief Christine Lagarde and me, which we came at from our different perspectives. She focused on the economics, with a splash of numbers and growth, focusing on trends, concerns and challenges. I hit the politics. Topics ranged from the Middle East to Iran, Japan, Europe, the U.S., globalization (or lack thereof) and even cybersecurity.

We sparred the most on China, where former Australian Prime Minister Kevin Rudd, in the audience (along with 60 CEOs), also got into the scrum. The subject: is political reform coming? I was more cautious than Lagarde -- I say perestroika is coming, albeit slowly. Glasnost? Absolutely not. The process of opening up China's political system is too risky and destabilizing for the very people who would be implementing it: China's ruling elite. In terms of the corresponding dangers of nationalism as China engages in political reform (or avoids it, and increasingly distracts the public by stoking nationalism), I stood out as far more worried than she did. Same goes for our stance on information -- Christine was far more hopeful that information would empower the people in relatively short order. I'm unfortunately much more cynical as I look at the untold volatility between here and there. (See: the J curve). China really exemplifies the marriage of risk and opportunity, perhaps better than any other market. Yes, China is providing a huge portion of global economic growth, and it will soon become the world's largest economy. The opportunities cannot be ignored -- but neither can the risks. Put it this way: last year, how many CEOs did you hear saying they needed to wait for resolution on the fiscal cliff before they'd take money off the sidelines or start hiring in America? The United States was just too uncertain of a climate for investment, they said. How many CEOs say China is too risky to put money into? Virtually none. That's despite the fact that China is an exponentially bigger question mark than the United States when it comes to its trajectory and the risks therein. I can't stress this point enough.

Of all the folks here at Davos of her level, Lagarde is one of the few that truly speaks openly and analytically. A tremendous pleasure sharing the stage with her, and it was a wonderful experience. You could've heard a pin drop; it didn't end until 11 p.m., but not a single person left the room (or if they did, they snuck out silently!). For a Davos dinner, competing with another 50 events across the place, that was pretty special. More on the post-11 p.m. story to come...

Emerging market round-up

My reservations about China are just one area where I try to draw focus to how emerging markets should not be grouped together into a single asset class. These are dramatically different markets with dramatically different priorities. This was laid bare in a session I conducted this morning, where I led a panel of officials in the governments of five emerging market countries at various stages of development. They were, in no particular order: Nigeria, Brazil, South Africa, Malaysia and Myanmar (or Burma, if you prefer). I'll briefly share some of the highlights.

The conversation regarding Malaysia was great. I tried to frame debate around the following question: "How is the rise of China working for you -- and is your involvement in Trans-Pacific Partnership discussions with the U.S. et al problematic, given that Beijing trends between suspicion and opposition on the topic?" With Brazil and South Africa, we talked BRICS. I asked them how things are going with the development bank that these nations are building, as well as with the organization overall. Luciano Coutinho, who runs Brazil's development bank (BNDES) was very optimistic about what the BRICS could accomplish together, in spite of the disparate interests of the countries included. The same was true for South Africa's Minister of Trade and Industry. But as far as the BRICS arrangement went, Nigeria's minister was not as pleased -- that is, unless Nigeria gets its invitation.

You can't underestimate the scale of the development challenges in play in some of these countries. Brazil's infrastructure is world's away from the status of some of the other countries represented here. For example, Nigeria has a population nearly matching Brazil's -- but only 5 percent of the electricity output. Myanmar is perhaps the most exciting of the bunch, as it's the rawest opportunity here -- it is just beginning to emerge as an investment destination. There's a long road ahead. The electrification rate is just 26 percent. Indonesia and Thailand have roughly 250 and 370 motor vehicles per 1,000 people respectively -- Myanmar? Just 18. On top of that, in Transparency International's Corruption Perceptions Index from 2012, Myanmar ranked 172nd out of the 176 countries included. Myanmar's Minister of Tourism was exceedingly engaging, pleasant and refreshingly candid about the challenges facing his country.

Despite the risks and hurdles for development among emerging markets, the opportunities are jaw-dropping. Over the past five years, two-thirds of global economic growth has come from emerging markets. Respect.

The rise of the middle class?

Here at Davos, Coca-Cola CEO Muhtar Kent provided us with a memorable line. "Five billion people will be middle class by 2030," he said. Of course, the rise of the middle class is an astounding opportunity, and one of the most important global trends at play today. But as they say, 'a lot can change in a year.' How about 18? First, we need to ask, just where is this middle class growth coming from? That's right: emerging markets. That comes with risks (see the section above). On top of that, growing middle classes themselves can pose problems for emerging markets' development. With great growth comes great growing pains. Let's take a look at some of the near-term challenges: Growing middle classes are threatening the authoritarian growth model in China, spearheading a protest movement in Russia, directing greater attention to the gridlocked political system and corruption in India, and demanding better public services and less corruption in Brazil. These things can be overcome. The trends are still overwhelmingly positive. But it's worth pointing to the volatility inherent in such a large-scale transition.

If you are going to try and navigate the minefield of making predictions two decades into the future, your best bet is the National Intelligence Council's Global Trends Report 2030. The document came out quite recently, and given the scale of the challenge and all the variables, they do a masterful job. I'd recommend you read it if it's a topic that interests you, and feel free to check out my short 'book report' giving my thoughts (a very China-heavy piece, if you'd like more of my perspective on that front).

The demise of the gender gap?

A recent study here at Davos found that 17 percent of attendees are female -- and they are providing outsized influence with one-third of the Twitter presence we've seen. Umm... the more significant number here is the former, by a long shot. Seventeen percent is nowhere near where female participation needs to be. Coincidentally, just 17 percent of columnists at the New York Times are women, as Nicholas Kristof brought to light.

These trends need to change; even from a purely business perspective, pulling more women into the workforce is a necessity. Muhtar Kent had another memorable line: "The truth is that women are already the most dynamic and fastest-growing economic force in the world today." If you're interested, here's a compelling article that sums up much of the argument. And this is one opportunity where there's really no downside. The biggest risk? That people don't act, and the gender gap doesn't disappear quickly enough. Here is the WEF's page pertaining to the issue, showing just how slow progress has been. And I've embedded their Global Gender Gap Index below:

Late Night Snapshot

No Davos roundup would be complete without a quick take on the nightcap yesterday. With Google's party out of the cards this year, McKinsey's became the must-attend event. It was a very good time. When I left at 1 a.m., McKinsey CEO Dominic Barton was still there, going strong. He was schmoozing and schvitzing, clearly enjoying himself -- and much abiding by the mantra, 'It's my party, I can abide if I want to.'

The party was not quite up to the standards of Google's from last year... but perhaps that's because a little bit of world panic leads to a more energetic party crowd. After all, this year's Davos is decidedly more upbeat by day, and thus, more subdued by night.

Tweet(er) of the day:

Adrian Monck, a managing director for WEF communications/media, is a great aggregator of compelling Davos/WEF material. He is my #FF for sure.

On top of that, he adds some snark of his own.

Ian Bremmer is writing a Davos Diary exclusively for The Huffington Post, and will update it frequently throughout the summit.