Global CEOs bet on emerging markets

08:34, January 27, 2011      

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Global chief executives pinned their hopes on roaring growth in emerging markets at the start of the annual Davos forum yesterday but warned of rising inflation and political risks.

Business leaders at the World Economic Forum said surging food prices could spark fresh social unrest and pointed to geopolitical worries over tensions between North and South Korea and Iran and Israel, as well as unrest in Egypt.

"I'm optimistic because the world is growing ... Now we are seeing a much more self-assured developing world going more its own way," Nestle CEO Paul Bulcke told the opening news conference.

But other CEOs at the event struck a more cautious tone, pointing to the numerous risks which could yet derail the fragile global revival.

"Interest rates are zero today but they can only go up, and higher interest rates will drive financing costs up as well," said John Krenicki, chairman and chief executive of GE Energy and vice chairman of GE. "It's not just inflation in energy but steel, copper and general commodities."

The four-day forum in the Swiss Alps will bring together at least 35 national leaders, including the presidents of Russia and France, and more than 1,400 business chiefs. The number of participants from China and India is bigger than ever.

Bankers are keen to show their industry emerging successfully from the wreckage of the global financial crisis, and politicians want to dispel the gloom hanging over the eurozone. Growth in developing countries is key.

"This year, we think we'll see ... western Europe continuing to be tepid, America more U-shaped, and the fast-growing emerging markets will continue to be V-shaped," said Martin Sorrell, chief executive officer of the world's biggest advertising group WPP.

Source: Shanghai Daily
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