Davos Attendees Monitor Economic Recovery

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Business and political leaders from around the world are in Davos, Switzerland, for the annual World Economic Forum. Nariman Behravesh, chief economist for IHS Global Insight, tells Ari Shapiro the panic that gripped last year's session has subsided. However, there is still some uncertainty regarding the economic recovery, and what the regulatory landscape is going to look like for banks.


Some of the most influential people in the world are in the Swiss ski resort of Davos this week, attending an annual power gathering called the World Economic Forum. The mood is one of relief compared to last year.

Weve called economist Nariman Behravesh to find out more. He's the chief economist for the firm IHS Global Insight and a regular attendee at Davos.

Good morning.

Mr. NARIMAN BEHRAVESH (Chief Economist, IHS Global Insight): Good morning.

SHAPIRO: Well, how does what youre hearing this year compare to last year, especially from the banking executives who are at Davos?

Mr. BEHRAVESH: What a difference a year makes, both to the banking industry and to the global economy. I think it's fair to say the panic that gripped this group last year has subsided, but there's still a lot of uncertainty and unease about the road ahead, both in terms of the economic recovery and what the, sort of, regulatory landscape is going to look like for banks, so banks are particularly worried about the kind of regulation that they're going to come under.

SHAPIRO: And more broadly, what do you hear from attendees about President Obama and what's the attitude towards the steps he's taken to try to help the economy recover?

Mr. BEHRAVESH: Well, I think there was a big difference before and after the State of the Union message. I think after the State of the Union message, there is a sense that the Obama administration sort of refocused on the key priorities, including jobs creation. I should say, maybe, especially jobs creation, so there is a sense that he's certainly hearing what the voters seem to be saying in the United States. There are questions around whether or not the U.S. will cooperate, globally, on things like climate change, on things like global financial regulations. There's still a lot of questions out there about sort of where this administration's gone with some of these more global issues.

SHAPIRO: I understand China has its biggest Davos delegation ever, with more than 50 people there. Why is that and what impact are they having?

Mr. BEHRAVESH: I think they're couple reasons. The first is, you know, China is playing an increasingly larger role in the global economy so that greater representation is certainly a byproduct, if you will, of China's bigger role. The other is, I think they're very worried about potential sort of protectionist measures that might be taken by the U.S. or Europe against them, and so they're hoping to convince the Americans and the Europeans not to put in place, sort of, protectionist measures.

SHAPIRO: Davos is such an unusual gathering of high level people from different parts of the world, different parts of industry. What's the most unique or surprising thing that you have seen in your time there this year?

Mr. BEHRAVESH: Well, I think the interesting discussions are in the private sessions, if you will, you know, where the press isn't present and youve got very small gatherings of very influential people who are trying to conduct a dialogue without the hype, without the rhetoric. And, you know, I attended a private session on energy and the environment and, you know, even though everybody views lack of agreement in terms of global warming, that frustrated everybody after the big Copenhagen summit on the environment, there was a sense that yes, we all need to kind of work in roughly the same direction, but, you know, domestic politics do get in the way sometimes.

SHAPIRO: There is so much middle class populist working class frustration at the way the economy has not recovered as quickly as people might've wanted. Do you see that reflected in Davos or are people there so wealthy and operating on such a different level that it's just a completely different perception of things?

Mr. BEHRAVESH: Not at all. I would say that here, everybody is very, very conscious of the fact that we're looking at a slow recovery in the industrial world - that is to say mostly U.S. and Europe - and that unemployment rates are high and that could become a major issue in terms of populism as youre saying, and so there is a great sensitivity and a sense of urgency about the unemployment problem, again, not just in the U.S., but Europe and many other parts of the world.

SHAPIRO: Nariman Behravesh is chief economist at IHS Global Insight.

Thank a lot.

Mr. BEHRAVESH: My pleasure.

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