The inaugural Horasis Annual Meeting convened in Zurich on 26-27 January 2010. The meeting was held at a critical time, providing insights into global imbalances, governance risks and the long-term fallout from the economic crisis. Held under the theme ‘Strategies to overcome the Global Economic Crisis’, the Horasis Annual Meeting provided the platform for the world to discuss the implications of the global economic crisis and to shape the post-crisis environment. Also, the meeting was conceived to reflect on the increased emphasis of the developing world to engage globally – and thus contributing to the healing of the world economy. This report distils the outcomes and observations that emerged from the meeting.
The Horasis Annual Meeting as well as the other Horasis meetings offer opportunities for senior business leaders to channel their ideas and proposals for the global recovery. Horasis is using its unrivalled history of partnership with global corporations to create a powerful platform for cooperation between emerging and developed markets. From the first meeting in 2005, annual gatherings have been held around the globe. The flagship events are the Global Arab Business Meeting, the Global China Business Meeting, the Global India Business Meeting and the Global Russia Business Meeting. Horasis has engaged business leaders from all around the world to enact visions for a sustainable future for the last five years.
With the inaugural Horasis Annual Meeting, Horasis celebrated its fifth anniversary. The Horasis Annual Meeting aims to be the foremost annual gathering of business leaders from emerging and developed markets. The meeting’s purpose is to advance solutions to the most critical challenges facing corporations today. Participants jointly identify globally relevant business issues and develop sophisticated and interdisciplinary solutions. The event is open to CEOs of the world's leading companies.
Over 100 participants from 20 countries attended the Horasis Annual Meeting, including the following co-chairs: Esko Aho, Former Prime Minister of Finland; Executive Vice President, Nokia, Finland; Claude Beglé, Former Chairman, Swiss Post, Switzerland; Daniel J. Brutto, President, UPS International, USA; Chen Feng, Chairman, Hainan Airlines, China; Carlos Miguel Collazo, Chairman, Marsys Group, USA; Alan Hassenfeld, Chairman of the Executive Committee, Hasbro, USA; Yoshito Hori, Chairman, Globis Group, Japan; Wolfgang Lehmacher, Chief Executive Officer, GeoPost Intercontinental, France; Bright Simons, President, mPedigree Network, Ghana; Niraj Sharan, Chairman, Aura, India. The following rapporteurs led and summarized the discussions:; Jeffries Briginshaw, Executive Director, TransAtlantic Business Dialogue, Belgium; Maria Livanos Cattaui, Member of the Board of Directors, Petroplus Holding, Switzerland; Stephen Klimczuk, Associate Fellow, Saïd Business School, University of Oxford, United Kingdom; Jean-Christoph von Pfetten, President, Royal Institute of East-West Strategic Studies, United Kingdom; S Roy, Chairman, Asean Affairs, Thailand.
The economic crisis continues to threaten economic stability and social welfare for emerging and developed markets. At a time of considerable uncertainty, the purpose of the 2010 Annual Meeting was to conceptualize strategies to overcome the crisis. We hope you find this report to be an insightful and timely guide to how global leaders propose to address the implications of the current economic crisis in the near term, but also how global leaders will combine their crisis management experience with new approaches towards economic competitiveness to ensure long-term growth.
The attention of participants was firmly on the future of the global economy and the need to address the imbalances that led to the worst downturn since the Great Depression. Over a year into the financial slide that began in the U.S., the great deleveraging continues with worrisome spin-off effects around the globe: gyrating oil prices and volatile commodity trading, seesawing currencies, and mortgage-meltdown losses that could exceed $1 trillion around the world. Alan Hassenfeld, Chairman of the Executive Committee, Hasbro, USA, noted that 'the speed at which disruption spread had accelerated over the past few decades. The Lehman collapse reached the world in the course of half-days. The recession might be ending soon but recovery from the global crisis will be gradual.'
Generous emergency spending plans by most developed countries had helped stave off economic depression and had saved millions of jobs. Still, 'the efforts by the state has to be of temporary nature and must no longer endanger fiscal sustainability in the long term,' said Maria Livanos Cattaui, Member of the Board of Directors, Petroplus Holding, Switzerland. 'Macroeconomic stimulus can facilitate the economic transition, but carries increasing costs.'
At the turn of the decade, the world economy is still out of order. The Western world is tackling with the aftermath of the economic collapse. Some countries like Greece, Spain, and Latvia were particularly impacted. But even some emerging markets slithered to essentially unthinkable depths. Russia, for instances, took a very hart hit - the Russian economy in 2009 has contracted by about 9 percent of GDP. Oltmann Siemens, Co-Chairman, Advisory Board, First Trust Portfolios, USA, explained that the reason why Russia was hurt so badly: 'Russia borrowed heavily on the international capital markets and, of course, it is dependent on the price of oil.' Elena L. Barmakova, President, Fontvieille Capital, USA, added that 'Russia's fundamentals remain strong and stand out from the rest of emerging Europe. I am confident that the Russian economy will bounce back - depending on what happens to oil prices.'
Dubai, struggling under $80 billion in debt, asked in November 2009 to delay interest payments for one of its flagship companies, Dubai World, sending markets tumbling around the world. 'The Dubai crisis might be the beginning of a broader emerging world crisis,' said Mike Garrett, Chairman, Evian Group, Switzerland. 'There will be more defaults in 2010 as more countries struggle to repay debt.' 'Dubai and other emerging markets will overcome temporary difficulties and finally tide over the global crisis,' argued, S. Roy, Chairman, Asean Affairs, Thailand. 'Efforts by the central bank of the UAE to shore up the liquidity of banks have been reassuring.'
The plenary sessions were followed by frank and intensive boardroom dialogue sessions, where delegates interacted with the panellists on a variety of fundamental issues, including the refinancing of the global economy and the repositioning of global trade.
'A new order is emerging from a credit crisis that put the world on edge - and the emerging markets are playing an important and responsible role in this new order,' said Jean-Christoph von Pfetten, President, Royal Institute of East-West Strategic Studies, United Kingdom. Western capital markets look mature. It’s hard to believe that US consumers will play the role they played in past recoveries because the US consumer has to deleverage and has to rebuild savings. 'The next source of growth will be found in the non-Western world,' according to Sushil Premchand, President, PRS Services, Switzerland. Goldman Sachs, for example, reckons that since 2007, the so-called BRICs (Brazil, Russia, India and China) have accounted for 45 per cent of all global growth, compared with 16 per cent in the 1990s. 'Resurgent BRICs will lead the global race for investments,' echoed Niraj Sharan, Chairman, Aura, India.
The discussions at the Horasis Annual Meeting underlined that capitalism has been the engine of opportunities for innovators and risk takers, but that the system of unfettered free markets is under scrutiny. Globalization has enabled cross-border connections through technology and opened the channels for free trade and investment flows. Yet this model of integration is facing more regulation. Esko Aho, Former Prime Minister of Finland; Executive Vice President, Nokia, Finland, spoke candidly about the need to revise capitalism: 'The so-called Anglo-Saxon model of capitalism might be replaced by a model which favours long-term orientation instead of the usual practice of short-term profit taking and speculation, hence inheriting a more 'Asian' approach towards capitalism.' And as Daniel J. Brutto, President, UPS International, USA noted: 'While not the easiest path, by cooperating globally and by avoiding the Darwinian mindset of short-term capitalism, we can be better prepared to overcome the crisis.'
At the close of the Horasis Annual Meeting, participants called for fundamental shifts in business models and government policies to address the striking imbalances exposed by the crisis. 'Inherited models are no longer valid,' said Claude Beglé, Former Chairman, Swiss Post, Switzerland. 'We have to reinvent the way our economies and companies are run.'
Asian economies - led by China - are already showing signs of revival in the post crisis period. 'China continues to fare better than most countries and looks on track to meet the target of 9 percent GDP growth in 2010,' explained Chen Feng, Chairman, Hainan Airlines, China. Still, participants warned that green shoots do not guarantee a global recovery, implying a need to be cautious about the economic outlook for 2010 and the years to come. Also, financial fragilities can leave an economy vulnerable to shocks and should be resolved for a durable recovery.
The co-chairs, rapporteurs and participants made the following proposals at the closing plenary:
First, governments should keep carrying out anti-crisis measures for at least another six months, while connecting them more closely to structural reforms. The economic crisis has magnified the importance of public private partnerships - partnerships between the private and public sectors shall be promoted to translate fiscal stimulus into real economic growth.
Second, protectionism remains a threat to recovery and future growth. A successful conclusion of the Doha round of multilateral trade negotiations would restrain protectionism and help create greater security of market access. The role of international organizations like the G20 should be strengthened.
And third, economic recovery should not replace other concerns, such as climate change. Even though the Copenhagen conference on climate change in December 2009 has been perceived as failure my most observers, we should not give up to protect the environment. Economics and climate change are not opposites, they need one another.
The meeting ended with some cautious optimism: 'We might see a strong rebound by the third quarter if everything goes right,' as Yoshito Hori, Chairman, Globis Group, Japan, put it - fuelling hopes that the end of the 'Great Recession' is in sight. 'But one has to expect that the recovery globally is not going to be symmetrical. Most of the world will still be characterized by substantial excess capacity,' reasoned Sheikh Salman Al Khalifa, Chairman, Bahrain Petroleum Company, Bahrain.
On behalf of Horasis, I would like to personally thank the co-chairs of the 2010 Horasis Annual Meeting. My thanks go also to the meeting rapporteurs for their outstanding efforts in capturing the spirit of constructive dialogue in their contributions for this report. The Horasis Annual Meeting was a unique experience which would not have been possible without the dedication and enthusiasm of our partners, members and participants.
It is our hope that the Horasis Annual Meeting will serve as an important platform for
stimulating discussions and creative solutions in the years to come. Horasis looks forward to welcoming you back to next year's edition of the Horasis Annual Meeting which will take place in Zurich on 25-26 January 2011.
Dr. Frank-Jürgen Richter
Horasis: The Global Visions Community
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