Margaret Lefebvre
NOTES from DAVOS
World Economic Conference, January 29 - February 3, 1998
Davos, Switzerland.
These notes are an extrapolation of the main themes that emerged from
the Summary Proceedings of the Conference and represent the trends,
individual facts and ideas that aroused the interest of
Margaret Lefebvre
Reducing unemployment- a key priority for the 21st century.
Two main trends are emerging:
- The unemployed cannot be allowed to stay home.
- As of 1998, unemployment is a more critical issue for Europe than
for America.
E MONEY
E Money will replace paper money. Once this happens, it will have a
major impact on being able to track income to the country of origin
for income tax purposes.
- Look for changes in residency regulations on a global basis.
Stock Exchanges
There was concern expressed that although most Exchanges are going to
achieve year 2000 compliance in time, this does not appear to be a
priority with some of the Asian exchanges. Unless this situation is
corrected in time, this could cause major dislocations for world
stock markets at the millennium.
New Technologies
The cost of each 10% market share is $1 billion US.
EURO vs US $
In the short term, the EURO is not expected to challenge the position of the US$ as world currency benchmark, although it will likely do so within 10 years.
IMF funds will be transferred to the new European Central Bank. The ECB is expected to be in operation by July 1, 1998.
Pensions
The present value of the USA "pension promises" represents 150% of the GDP.
Future adjustments to the pensions will be made based on political and public policy considerations, not on technical issues.
The political dimension is paramount, especially as " people vote their ages": 20% of 20 year olds vote, 40% of 40 year olds vote and 80% of 80 year olds vote.
Gold
Peter Munk stated that world supply of gold was 25% below demand and yet gold has fallen in value by 33%.
One suggestion he put forward to stabilize the situation was for the central banks to monetize their reserves.
China
China wants to join the WTO by 1998. Their main economic objective is to bring the standard of living up to international norms by 2050. To do so, they would need to achieve sustained growth of 7% a year.
In answer to a question from the floor (by Pierre Arbour) it was stated that the objective of raising the standard of living was to be the focus for the future, rather than that of becoming the next superpower.
In several sessions China reiterated that they would not devaluate their currency in the wake of the Asian crisis because if they did, it would cause a second and potentially devastating round of devaluation in the other Asian currencies.
Health care
The future of affordable public health care will rest on a three pronged approach:
- Develop standards of care
- Define costs
- Set health care priorities.
Treatment will have to be proven to be both NECESSARY and COST EFFECTIVE.
The trend is toward CO-payment and CO-responsibility.
Winning the world for growth
The telecom industry, worth $731 billion US world wide, will triple in the next 10 years.
- 1 person out of 2 around the world has never made a phone call
- 1 person out of 2 around the world faces a 2 day walk to the nearest phone.
Unions
There is a major shift in orientation from security - job for life- to life long learning. Learning, on the job training, ongoing skill improvement opportunities, these will be the major union issues for the future of work.
Global Warming
Global warming is thought to be responsible for the dramatic increase in the incidence of natural disasters around the world.
Insurance claims from "natural disasters" now represent 1/3 of the profits of the insurance industry world wide.
Maurice Strong calls for an end to government subsidies of fossil fuel production as the most effective method of reducing the emissions that contribute to global warming and creating a level playing field for "clean" technologies.
Russia
The Russian inflation rate is down from 2,000% five years ago to 11% in 1997.
The projected inflation rate for 1998 is between 5-7% with a strategic target of a stabilized 3.5% by the year 2001.
Nation States
All traditional wars ended with the transfer of territory from one nation state to another.
The cold war marked the end of the 350 year Westphalian period in which:
- Geography defined nation states
- Each state is governed by a single secular authority and that authority represents the nation state outside of its' borders.
- The state is the ultimate or highest authority.
At the present time:
- Geographical boundaries have no bearing in an era of global communication.
- Corporations and NGO's often represent states outside of their borders.
- The ultimate authority is often the market place or public opinion.
Active Aging
Kenneth Dychtward- CEO of Age Wave Inc.
sample comments:
- Americans have more parents than kids
- If you want to make money, open a toy store in a retirement village
- The people with disposable income are over 45 and we are still marketing to the 30 year olds.
- Public policy issues will be decided by the group that has the largest clout at the ballot box- seniors.
Internet
Go play at www.pointcast.com
Complexity Theory
Murry Gell-Man
Murry Gell-Man, Prof. The Santa Fe Institute, USA
Complexity goes beyond Chaos to look at the interaction of patterns in time. The " frozen accidents" of his model are embedded and accrue with time.
by Margaret Lefebvre
A Window on Westmount
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