February 1st, 2012
08:20 AM ET

Zakaria: Reflections on a gloomy Davos

By Fareed Zakaria, CNN

The atmosphere at Davos this year was very different than usual. In the many years I've been attending the conference, there has always been a star:  A country that was newly reforming and doing well would send its finance minister or prime minister and everyone would be wowed. There would be a year of Turkey or a year of India.

But this year there was no sense of optimism about any model country. Instead, there was uncertainty. People worried about the U.S. economy (even though U.S. Treasury Secretary Tim Geithner made a pretty good case that the U.S. was bouncing back in the Davos plenary session, which we aired on GPS and can be seen in the video above). There was uncertainty about how strong the recovery was and whether the U.S. would be able to overcome its medium-term deficit issues.

U.S. concerns were overshadowed by European concerns.  Although people thought the Europeans were dealing with the crisis management pretty well, there was deep uncertainty about the long term future of the entire European model. There was a sense that Greece would never be able to pay off its debts and that there’d be a massive restructuring. People asked what Europe would look like after that restructuring. One of the delegates said to me, 'At the end of the day, the Greeks and the Italians will never become Germans. The question is: Can we have a Euro Zone that encompasses both?'

There was even a great deal of uncertainty about something that has been taken for granted for the last decade - the strength and vitality of the emerging markets. People were concerned about whether China had over-expanded during this recession - whether it had eased up on credit too much and whether its stimulus program had been too far reaching, producing everything from property bubbles to inflation to an unsustainable rise in wages. There was concern about whether China would be able to pull back and, if it did, what the effect would be on social stability. The Indian delegation was very gloomy because the politics of India are paralyzed and world trade seems to be declining quite significantly. Brazil's economy contracted last quarter. Everywhere, the certainties of the past had given way to a great deal of unease.

If there was one ray of hope, it was Africa. I had dinner with African heads of states, senior officials, and business leaders. They were bullish on Africa. They felt that politically they were doing better than they had before. Democracy was getting more entrenched. One of them pointed out to me that years ago The Economist had a cover that read, “Africa: The dark continent”.  Last month, The Economist had a cover that read, “Africa Rising: The hopeful continent.”  The delegate said those covers represent the transformation of people’s views of Africa. In a Davos filled with gloom, I was surprised to find the one note of optimism coming from the most unlikely spot.

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Topics: Africa • Economy • From Fareed • Global

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soundoff (65 Responses)
  1. Bright Simons

    Dear Fareed,

    Wonderful, insightful, thoughts as always.

    I believe however that you are referring to: 'The Hopeless Continent', rather than 'The Dark Continent', in your allusion to that seminal article that marked the baseline for evaluating the change in the tone of the Economist's coverage of Africa over the years.

    'The Hopeless Continent' appeared 12 years ago when Richard Dowden was Africa Editor. He has conceded himself that this piece represented the lowest point in the Economist perception of the continent, and that matters have improved steadily since then.

    I would also like to take the opportunity to inform you and your readers of the launch of the Africa 2.0 Manifesto in Davos this year, another seminal landmark.

    February 4, 2012 at 10:44 pm | Reply
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    January 31, 2013 at 5:14 am | Reply
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