If you leave out China and India, the subject that has received the most attention at the ongoing 36th annual meeting of the World Economic Forum is the current nature of global risks and how business enterprises ought to face them.
Several sessions recognised how the major engines of growth in the world economy showed no sign of slowing down, but they eventually ended up highlighting the dangers arising out of different types of risks.
For instance, the session on an update on the global economy began with optimistic observations about how 2006 will fare. But soon participants began pointing out the danger signs. Stephen S Roach, chief economist of Morgan Stanley, warned that the complacency prevalent among investors at present was setting the global markets up for a shock.
The weakest link in global growth, according to Roach, was the American consumer, who had begun to cut back his expenditure. "When and if this downturn materialises, the developing countries of Asia could be in trouble since they are dependent on the US market," he said.
Min Zhu, executive assistant president of Bank of China, highlighted a different type of risk. The retail sector boom in China implied that the disparities in wealth between China's rich coastal region and the poor rural West would become much greater than previously feared.
Worse, overcapacity built in China's manufacturing sector, particularly in steel and cars, was a cause for concern and a 9 percent growth rate was dependent only if the American consumer demand remained strong.
Jacob A Frenkel, vice-chairman of AIG, pointed out any attempt to force China to revalue the yuan had the potential to cause a ripple effect across the region.
Many participants felt political problems posed the greatest risk in 2006. Disputes in West Asia and Iran could create a shock to oil supplies, just as China's plans to reduce savings could have a serious implication for the US.
For Japan, which was recovering from a decade of 'flat' growth, its ageing population posed a big challenge and its strained relations with China could be a cause for concern. In a session on the role of leadership