Our Man in Davos: Nervous about sovereign debt, and curious about Carla

Actis boss Paul Fletcher blogs exclusively for MT on the opening skirmishes at the World Economic Forum.

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Last Updated: 31 Aug 2010

As a village, Davos is characterised by typical Swiss efficiency: quiet, military precision, right down to the motionless snipers on the roof. Happiness is a decent hotel room. Preparation is all. This year Mrs Fletcher has joined me. Over dinner we speculate on the origins of Swiss complacent satisfaction. Why don’t we have their food? Their wine? Their waiters? We eye the other spouses sceptically from our corner of the Flüela Stübli: how is SHE with HIM springs uncharitably to mind. Economics is a noble science.

On Wednesday morning, we were up early for the ritualistic skirmish of the opening plenaries – delegates scrambling for their seats. A well-plotted day at Davos is an art form. Forget Haiku; mastering this could take a lifetime.

CNBC opens with a debate: ‘The Next Global Crisis’. In 2009, the well-heeled at Davos shuddered in their boots as the world’s stock markets tumbled into free-fall; the mood was barely contained hysteria. Back here in 2010, are we older? Yes. Wiser? Possibly. Nonetheless, the tone is sombre, newly reflective. Anchor Maria Bartiromo – floodlit, sparkling, technicolour – turns to her audience: ‘Which of these alarming prospects should scare us most?’

The audience sit juggling spectacles and briefing papers, prodding nervously at their interactive voting buttons in the dark. The options leap on the screen:

1. Wholesale sovereign debt failure?
2. Excessive regulation?
3. Protectionism?

The old cliché of ‘nothing to fear but fear itself’ comes back to haunt us, as we hear an economist observe that there is nothing wrong with the US stockpiling weapons, the only problem being that there’s no one to fire them at; the enemy is elusive, whereas the budget deficit is a far more real and present danger. The audience nods sagely. Bankers, regulators, politicians, businessmen past the point of regret – looking instead, cautiously, to the future.

The response of the audience is unequivocal: more than half the delegates are most concerned by sovereign wealth debt failure. 37% are nervous about protectionism, while excessive regulation, once the bogey man of London, Zurich and Wall Street, has lost its power to terrify, and limps in third.

The debate ends, the delegates trample out; truffle-seekers hungry for their next find. The burning question on everyone’s mind: will Sarkozy bring Carla?

Paul Fletcher is Senior Partner at Actis, the world's largest private equity firm specialising in emerging markets, leading the firm from its London headquarters. He'll be blogging exclusively for MT from Davos all this week.


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Our Man in Davos: Nervous about sovereign debt, and curious about Carla

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