The World Economic Forum has long been something of a coming-out party for emerging economies, with developing countries dispatching politicians and executives to the Swiss resort of Davos to drum up interest. This year, the big magnet for investment looks to be an older player on the global stage: the United States.
While Brazil stagnates, Russia enters a recession, and India struggles to implement economic reforms, the U.S. is booming as energy prices plummet and Silicon Valley dominates global tech. Though Wednesday’s retail sales report dampened enthusiasm about the scale of the U.S. rebound, the American economy grew at its fastest pace in over a decade in the third quarter of 2014, reaching an annualized rate of 5 percent.
“The pendulum has shifted,” said Jacob Frenkel, chairman of JPMorgan Chase & Co.’s international arm, who’s been attending Davos since the mid-1980s. “The U.S. is now regaining its position in the world economy. It is the place where the recovery took hold in the most robust way.”
The Davos agenda continues to focus more on emerging markets than on the U.S., but the tone at this year’s meeting (held Wednesday through Saturday) is less upbeat about prospects in the developing world. The 2014 program featured sessions such as “Fulfilling North Africa’s Promise” and “Eurasia: The Next Frontier?”
This year, a panel titled “Achieving Africa’s Growth Agenda” will weigh the impact of falling commodity prices. Another, “The Arab World Context,” will address rising youth unemployment and escalating social tensions.
Beyond the podium at Davos – in the corridors, cafes, and bars – much of the talk will be about America’s remarkable resilience, said Martin Reitz, who oversees the German business of investment bank Rothschild. Companies “not present in the U.S. or who are sub-scale in the U.S. are thinking about how to address this.”
Stuck in a small ski town surrounded by snow, forests, and mountains for the better part of a week, top CEOs use the conference to catch up with other executives, and the talk often turns to acquisitions. That could lead to more deals like the $259 billion in foreign takeovers of U.S. companies that took place in 2014, more than double the previous year’s total and the highest since 2007.
Bank of America CEO Brian Moynihan and other executives from the Charlotte bank will be attending the gathering, as in years past. Moynihan will be meeting with other CEOs, clients and global policymakers. Staff writer Rick Rothacker contributed.