Davos chief says Europe, oil prices among worries

DAVOS, Switzerland -- As leaders from the world of politics and business arrive Tuesday in droves for the start of the World Economic Forum in the Swiss ski resort of Davos, the event's founder is in sombre mood.

See Full Article

Klaus Schwab, the 77-year-old chief of the world's most recognized annual economic meeting, said he's worried about Europe's future, the fallout from plunging oil prices and gaping inequalities worldwide.

In an interview with The Associated Press, Schwab also justified the decision of the WEF to disinvite a delegation from North Korea, including its foreign minister, for its claim earlier this month that it had tested a hydrogen bomb. The WEF has been working hard to bring the North Koreans to the 45-year-old annual gathering at the highest level since the 1980s.

"We had to show solidarity with the global world opinion," Schwab said late Monday. "We never cede to any pressure, but we have one principle which means that we observe U.N. sanctions. We do not know yet how the U.N. sanctions will come out, but we didn't want to have the coincidence of the U.N. expressing sanctions -- tough sanctions -- this week and at the same time, we act against those sanctions."

Schwab said he was "very much looking forward" to the arrival of the North Korean delegation and laid out his hope that the country would qualify one day "hopefully sooner rather than later."

The revocation prompted a sharp letter of retort by its ambassador in Geneva, but Schwab insisted Davos organizers had little choice amid a growing prospect of new sanctions against Pyongyang.

With the world facing a myriad of problems such as climate change and war, Schwab said he wanted a "forward-looking" theme to dominate discussions this year, which officially runs from Wednesday through to Saturday: and has built this edition around the idea of the Fourth Industrial Revolution.

He said vast, speedy technological advances in the digital age in areas like nanotechnology and automation threaten to leave many unskilled workers without jobs or at an economic disadvantage.

In Davos, about two-thirds of the 2,500-plus attendees are decision-makers from the business world: The boardroom, not the shop room floor, has an outsize representation in this snow-capped, ultra-chic Alpine resort. World leaders, including U.S. Vice-President Joe Biden, Prime Ministers David Cameron of Britain and Nawaz Sharif of Pakistan, and German President Joachim Gauck are set to attend.

Iranian Foreign Minister Mohammad Javad Zarif is likely to be a headline-act after international sanctions against his country were lifted over the weekend under a deal on Tehran's nuclear program. Some business leaders will be contemplating a resumption of economic ties with the long-isolated, oil-rich Islamic republic.

Iran's Oil Ministry announced plans Monday to boost oil production by 500,000 barrels per day after the sanctions were lifted, and Schwab noted the possible harmful impact of even more supply on developing countries that depend on oil revenues at a time when crude prices have already slumped to their lowest level in more than 12 years.

"Of course, we will have to absorb now a larger supply dimension. What concerns me is the impact -- the social impact -- it has on certain countries," said Schwab. "Just think of Nigeria, which so much depends on oil, and other African countries ... not to speak about what's the impact on Russia and so on."

As for Europe's struggle to manage an influx of more than 1 million refugees and migrants last year, he said the continent was at a "crossing point." Europe needs to find the right balance between its values and its capabilities of taking them in, and assuage tensions that have put the Schengen zone -- which eases cross-border travel -- to the test, he said.

"My concern is that Europe, at the moment, is in a phase of disintegration," Schwab said. "Europe would be completely marginalized if we break up into different nation-states again."

He said solidarity with refugees was a core European value.

"It's not a question whether we should have solidarity or not, it's how much can we afford? And here I think we haven't found the right answer yet," he said.


Latest Economic News

  • A growing trade-fed economy can ease the pain of rising interest rates: Don Pittis

    Economic CBC News
    Interest rates are on the way up. If there were any remaining doubts, U.S. Federal Reserve chair Jerome Powell crushed them like a bug yesterday. In his first meeting with reporters since replacing Janet Yellen as the world's most powerful central banker, Powell announced a quarter point rate increase and made it clear he thinks the U.S. Source
  • Thieves steal millions of PC Optimum points, go on shopping sprees

    Economic CBC News
    Lenore Biever lost more than one million PC Optimum rewards points after someone apparently hacked her account and went on a shopping spree. The points — which are worth more than $1,000 in product rewards — were spent on March 7 at two Loblaws-owned Pharmaprix drug stores in Laval, Que. Source
  • Toy company CEO leads effort to salvage part of Toys R Us

    Economic CTV News
    NEW YORK -- Toy company executive Isaac Larian says he and other investors have pledged a total of $200 million in financing and hope to raise four times that amount in crowdfunding in order to bid for up to 400 of the Toys R Us stores being liquidated in bankruptcy. Source
  • NYC agency investigating more than a dozen Kushner buildings

    Economic CTV News
    New York City's buildings regulator launched investigations at more than a dozen Kushner Cos. properties Wednesday following an Associated Press report that the real estate developer routinely filed false paperwork claiming it had zero rent-regulated tenants in its buildings across the city. Source
  • Tesla shareholders approve Elon Musk pay package that could net him $50B US

    Economic CBC News
    Shareholders of electric car and solar panel maker Tesla Inc. have approved an ambitious pay package for iconic CEO Elon Musk that could net him more than $50 billion US if he meets lofty milestones over the next decade. Source
  • Manitoba Hydro board resigns prompting accusations from premier, talk of lawsuit

    Economic CTV News
    WINNIPEG -- The board of directors at Manitoba Hydro resigned en masse Wednesday, leading to counter-accusations from Premier Brian Pallister and the spectre of a lawsuit from the Manitoba Metis Federation. Nine of 10 board members at the provincial Crown corporation issued a written statement in which they cited an inability to work with Pallister and his Progressive Conservative government. Source
  • Mark Zuckerberg says Facebook made mistakes on Cambridge Analytica

    Economic CBC News
    Breaking more than four days of silence, Facebook CEO Mark Zuckerberg admitted mistakes and outlined steps to protect user data in light of a privacy scandal involving a Trump-connected data-mining firm. Zuckerberg said Wednesday that Facebook has a "responsibility" to protect its users' data and if it fails, "we don't deserve to serve you. Source
  • 'Major breach of trust': Zuckerberg says Facebook made mistakes on Cambridge Analytica

    Economic CBC News
    Breaking more than four days of silence, Facebook CEO Mark Zuckerberg admitted mistakes and outlined steps to protect user data in light of a privacy scandal involving a Trump-connected data-mining firm. Zuckerberg said in a statement Wednesday that Facebook has a "responsibility" to protect its users' data and if it fails, "we don't deserve to serve you. Source
  • Facebook crisis-management lesson: What not to do

    Economic CTV News
    NEW YORK -- The crisis-management playbook is pretty simple: Get ahead of the story, update authorities and the public regularly, assume responsibility and take decisive action. Crisis-management experts say Facebook is 0-for-4. Facebook's two top executives, CEO Mark Zuckerberg and chief operating officer Sheryl Sandberg, have gone radio silent since news broke on Sunday that political consulting firm Cambridge Analytica may have used data improperly obtained from roughly 50 million Facebook…
  • U.S. moving to limit warning labels on junk food: report

    Economic CTV News
    U.S. Trade Representative Robert Lighthizer has all but confirmed a New York Times report that U.S. trade negotiators are using the NAFTA talks to try to limit efforts to place warning labels on junk food. Source