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Economy Jan 27, 2012

India Nowhere at Davos: Thank god for that!

By Venky Vembu

Barely a few years ago, India was the flavour of the season at the World Economic Forum talk-fest in the Swiss Alpine resort of Davos as international moneybags and businesses, looking for the Next Big Thing after China, latched onto the India Story.

They came by the India Adda pavilion, chomped on curry offerings, got a earful of Bollywood beats - and pronounced that India was Everywhere.

This year, after a bruising 12 months of economic mismanagement that saw inflation soar and growth slow down and a whole lot of other things go wrong, the moneybags' starry-eyed vision of India has faded. India is Nowhere at this year's Davos gabfest. Indian TV personalities who have made Davos something of an annual pitstop say that the mood among the Indian contingent this year is downbeat, "almost depressed."

The fact that Davos has gone cold on India is perhaps a good thing, given its horrendous record at predicting the future. Reuters

NDTV's Vikram Chandra reports that a top industrialist told him: "We are back to being on the sidelines, back to watching others take the limelight. Back to the bad old days. It's feeling as if the India story is over."

The unnamed Indian industrialist may not be ready to acknowledge it, but the fact that Davos has gone cold on India is perhaps a good thing, given its horrendous record at predicting the future and reading economic ups and downs.

As Clyde Prestowitz, president of the Economic Strategic Institute, notes, Davos has become the platform for an intellectual form of name-dropping and a chance for the select few to gloat that they have been invited to the meeting.

"It's a combination of competitive vanity and convenience that makes it all work. Glitteratus A begs for an invitation because he/she can't stand the thought of not being there if Glitteratus B is there. The fact that many are there then makes it easy to do in a few days a lot of business with each other that without the meeting would take weeks or months. So, for organizing a nice party for them, the glitterati each pay... anywhere from $50,000 to several hundred thousand dollars."

But far from being a forum that sets the economic and business agenda for the world, Davos has been horribly - and embarrassingly - behind the curve in seeing the future. Prestowitz points out that the Davos meeting in 2008, for instance, foresaw none of the cataclysm in the financial markets and the collapse of real estate markets that would define much of that year and the succeeding years.

Just as glaringly, in 1997, these Masters of the Universe labelled Southeast Asia as the world's most dynamic region, only to see the whole house of cards collapse barely three months later.

The Davos man, writes Prestowitz, "has consistently proven clueless and unable to set an agenda with regard to the global developments on which he is supposed to be the expert." This is largely because Davos represents the "global establishment", which by its very nature cannot see anything that doesn't fit into its orthodox framework, and has a dogmatic faith in the enriching power of unfettered globalisation.

This year, however, that faith is beginning to flounder. The gathering that for 20 years gushed about globalisation being a win for everyone, the mood this year, says Financial Times columnist Gideon Rachman, is more questioning. The implosion in the eurozone, which is about as bad an advertisement for globalisation and economic integration as it can get, has shattered the moneybags' cocksure certitude about which way the world spins.

Today, that manifests itself in a thousand doubts - about whether they should celebrate China and India as the last remaining pillars of global growth or whether they should worry about them.

Given their state of confusion, and their unspectacular track record in seeing the future, perhaps the fact that the Davos jet-set has gone cold on India is the surest contrarian sign that good things are destined for us...

by Venky Vembu

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