"The recent rise in inflation (in several countries)reduces the disposable income and creates social and political problems,"said Nouriel Roubini, a Professor of Economics and International Business at New York University.Participating in the opening session, Wipro Chairman AzimPremji shared Roubini's concern and said, "Inflation is really our keypriority and (I) hope that we don't get a knee-jerk reaction."
With food inflation at 15.52 per cent during the week endedJanuary 8 and the overall price rise pegged at 8.43 per cent in December, 2010,the Reserve Bank of India (RBI) has been tightening key short-term interestrates, sending shivers through the industry.
Inflation, in a way, is not restricted to India, as several other countries, including China, aregrappling with the problem. The issue captured the attention of the globalpolicymakers and CEOs who have gathered here at the Swiss skiing resort in the Alps.
India, the second-fastest expanding economy in the worldafter China, is fielding its biggest-ever delegation at the event, including125 CEOs and senior ministers like Home Minister P Chidambaram, Commerce andIndustry Minister Anand Sharma, Urban Development Minister Kamal Nath and HeavyIndustries Minister Praful Patel.
In addition, India Inc stalwarts like Azim Premji of Wipro,Mukesh Ambani of Reliance Industries, Sunil Bharti Mittal of Bharti Enterprisesand Kiran Mazumdar Shaw of Biocon are involved in the discussions on the"new economic reality", the future of employment and making growthover-arching.
The Geneva-based WEF is playing host to 1,400 delegates fromthe top 1,000 companies around the world, 30 heads of state or governments,renowned academicians, artists and faith leaders, including the head of theChinmaya Mission in New Delhi,Swami Nikhilananda Saraswati. .
The masters of the corporate world, government, intellectualand spiritual worlds are meeting in Davos in the backdrop of a global economicenvironment that is yet to fully recover from severe setbacks suffered in 2008and 2009.
While developing countries seem to have put the crisisbehind them, with the recovery largely driven by domestic demand, the state ofthe Western economies is considered quite fragile.
The common refrain at the summit here was that besidesinflation, rising public and even private debt in some European countries like Greece and Spain pose risks to the globaleconomy, which managed to overcome fears of double-dip recession in 2010.
With high unemployment -- close to 10 per cent in the US, forinstance -- the clich? of 'Inclusive Growth' has caught on in frontlineeconomies as well. Creating jobs along with maintaining growth is the mainchallenge of 2011.
The Davos discourse is sure to highlight the role of Asianpowerhouses like China and India inachieving this common task. China'seconomy is growing at over 10 per cent, while India is experiencing thesecond-fastest expansion rate of around 8.8-9 per cent.
Though the World Bank has forecast that the world economywill grow by 3.3 per cent, challenges like rising food inflation have surfaced,particularly in countries like India.
More and more countries are resorting to export controls onfood articles, which can make things worse.
The common message sought to be conveyed at the WEF Summitwill be "sharing". The WEF, which has been organising the annualevent in freezing temperatures at this 'village' for the last 40 years, haschosen an apt theme this year.
Seeking to capture the global mood, the WEF has given thesummit a theme of "Shared Norms for the New Reality".
"The theme is founded on four interconnected pillars --responding to the new reality, the economic outlook and policies for inclusivegrowth, supporting the G-20 agenda and building a global risk responsemechanism," it said.
When it comes to India, given the lid being blownoff several scandals and scams back home in the past few months, the Indianteam will have to face certain unsavory questions on corruption and the"governance deficit".
"We cannot hide, we will answer all these questionshonestly," CII Chief Hari Bharatiya said. Since corruption is a worldwidemenace, the WEF has scheduled a full-fledged session on the subject.
Copyright©2021 Living Media India Limited. For reprint rights: Syndications Today