DALIAN, CHINA // There was a sense of despair at the World Economic Forum this week. Obligations accumulated during a decade of prosperity have created a sovereign-debt and banking crisis that is threatening the US and European economies, marking a dangerous new phase in the three-year-old downturn.
At the meeting, some of the world's sharpest financial minds struggled to keep up with the fast pace of events. Greece lurched towards default, two big French banks were downgraded by Moody's Investors Service, Switzerland defied speculators with a peg to the euro, and the European Central Bank flooded the money market with emergency cash.
Meanwhile, European finance chiefs met in Poland yesterday, together with Timothy Geithner, the US Treasury secretary, and according to the Associated Press, agreed to decide next month on the next crucial payout of bailout loan money to Greece. They said they would disburse the next €8 billion (Dh40.6bn) only when they were satisfied that Greece was doing enough to cut its deficit through austerity measures.
Back in China, the assembled financial experts voiced the growing concerns about the financial crisis.
"We are now in a position where we have to place a large amount of faith in politicians to pull us out of our problems," said Victor Halberstadt, a Dutch economics professor who sits on the fiscal crises council at the World Economic Forum.
But political leaders on both sides of the Atlantic appear to be hamstrung by internal opposition. President Barack Obama in the US faces an uphill task to push through his US$447bn (Dh1.64 trillion) jobs plan, and Europe cannot decide what to do if Greece fails to meet tough targets for spending cuts and emergency taxes.
"In the past two years, we observe the politicians trying to muddle through all the issues. I don't think there is any room for the politicians to muddle through the current situation," said Min Zhu, a deputy managing director of the IMF. "You have to take decisive actions today, otherwise you run into crisis."
The host of the forum, Wen Jiabao, the Chinese premier, was stern in his warnings to Western powers, telling them to "put their houses in order".
China is still a pillar for the global economy, having grown at an average annual rate of 10.5 per cent over the past decade and building up $3.2tn of savings. Mr Wen outlined a host of challenges for China's "12th five-year plan", but the certainty conveyed in his outlook contrasted sharply with the confusion in the democratic West.
Leaders of other major emerging markets, which have also survived the global storm with growth intact, saw dangers, too.
NK Singh, a member of parliament in India, said there was widespread confusion over what policies were required to sustain India's growth rate of 8 per cent.
"We see a multiplicity and not necessarily a coherence of global prescriptions over inflation versus growth, on whether growth should be investment-led or consumption-led, on what kind of policies lead to jobless growth, on fiscal rectitude coming in earlier or later before demand gets tighter," he said.
But some definite trends were emerging, he added. The cost of access to global capital was rising, export economies were under threat of protectionism, and exchange rates were volatile.
Things are so bad for the three major currencies - the yen, euro and dollar - that some investors are already turning to the "offshore renminbi" as the new haven, said Victor Chu, the chairman of First Eastern Investment Group.
"You can now go to the Bank of China in New York or Washington and change dollars for renminbi, and at least in a limited way you can protect your savings," he said. "Hopefully in the longer term, that could give also governments another alternative."
Forum organisers were clearly running out of names for what to call the current global financial turmoil. If the 1930s were the Great Depression and 2008 was the Great Recession, was this the "Second Great Contraction", as the title of one forum session suggested?
"It is beginning to sound like the Great Train Robbery," joked Prof Halberstadt. Little did he know that the Swiss banking giant UBS was about to reveal that a rogue trader had lost $2bn betting against the Swiss franc.
tashby@thenational.ae
Results
4pm: Al Bastakiya Listed US$300,000 (Dirt) 1,900m; Winner: Emblem Storm, Oisin Murphy (jockey), Satish Seemar (trainer).
4.35pm: Mahab Al Shimaal Group 3 $350,000 (D) 1,200m; Winner: Wafy, Tadhg O’Shea, Satish Seemar.
5.10pm: Nad Al Sheba Turf Group 3 $350,000 (Turf) 1,200m; Winner: Wildman Jack, Fernando Jara, Doug O’Neill.
5.45pm: Burj Nahaar Group 3 $350,000 (D) 1,600m; Winner: Salute The Soldier, Adrie de Vries, Fawzi Nass.
6.20pm: Jebel Hatta Group 1 $400,000 (T) 1,800m; Winner: Barney Roy, William Buick, Charlie Appleby.
6.55pm: Al Maktoum Challenge Round-3 Group 1 $600,000 (D) 2,000m; Winner: Matterhorn, Mickael Barzalona, Salem bin Ghadayer.
7.30pm: Dubai City Of Gold Group 2 $350,000 (T) 2,410m; Winner: Loxley, Mickael Barzalona, Charlie Appleby.
A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
Dolittle
Director: Stephen Gaghan
Stars: Robert Downey Jr, Michael Sheen
One-and-a-half out of five stars
Washmen Profile
Date Started: May 2015
Founders: Rami Shaar and Jad Halaoui
Based: Dubai, UAE
Sector: Laundry
Employees: 170
Funding: about $8m
Funders: Addventure, B&Y Partners, Clara Ventures, Cedar Mundi Partners, Henkel Ventures
PROFILE BOX
Company name: Overwrite.ai
Founder: Ayman Alashkar
Started: Established in 2020
Based: Dubai International Financial Centre, Dubai
Sector: PropTech
Initial investment: Self-funded by founder
Funding stage: Seed funding, in talks with angel investors
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
What is Folia?
Prince Khaled bin Alwaleed bin Talal's new plant-based menu will launch at Four Seasons hotels in Dubai this November. A desire to cater to people looking for clean, healthy meals beyond green salad is what inspired Prince Khaled and American celebrity chef Matthew Kenney to create Folia. The word means "from the leaves" in Latin, and the exclusive menu offers fine plant-based cuisine across Four Seasons properties in Los Angeles, Bahrain and, soon, Dubai.
Kenney specialises in vegan cuisine and is the founder of Plant Food Wine and 20 other restaurants worldwide. "I’ve always appreciated Matthew’s work," says the Saudi royal. "He has a singular culinary talent and his approach to plant-based dining is prescient and unrivalled. I was a fan of his long before we established our professional relationship."
Folia first launched at The Four Seasons Hotel Los Angeles at Beverly Hills in July 2018. It is available at the poolside Cabana Restaurant and for in-room dining across the property, as well as in its private event space. The food is vibrant and colourful, full of fresh dishes such as the hearts of palm ceviche with California fruit, vegetables and edible flowers; green hearb tacos filled with roasted squash and king oyster barbacoa; and a savoury coconut cream pie with macadamia crust.
In March 2019, the Folia menu reached Gulf shores, as it was introduced at the Four Seasons Hotel Bahrain Bay, where it is served at the Bay View Lounge. Next, on Tuesday, November 1 – also known as World Vegan Day – it will come to the UAE, to the Four Seasons Resort Dubai at Jumeirah Beach and the Four Seasons DIFC, both properties Prince Khaled has spent "considerable time at and love".
There are also plans to take Folia to several more locations throughout the Middle East and Europe.
While health-conscious diners will be attracted to the concept, Prince Khaled is careful to stress Folia is "not meant for a specific subset of customers. It is meant for everyone who wants a culinary experience without the negative impact that eating out so often comes with."
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If you go
The Flights
Emirates and Etihad fly direct to Johannesburg from Dubai and Abu Dhabi respectively. Economy return tickets cost from Dh2,650, including taxes.
The trip
Worldwide Motorhoming Holidays (worldwidemotorhomingholidays.co.uk) operates fly-drive motorhome holidays in eight destinations, including South Africa. Its 14-day Kruger and the Battlefields itinerary starts from Dh17,500, including campgrounds, excursions, unit hire and flights. Bobo Campers has a range of RVs for hire, including the 4-berth Discoverer 4 from Dh600 per day.