Davos

4 hot-button global issues, according to a Davos attendee

January 21, 2014: 5:24 PM ET

We talk to the Eurasia Group's Ian Bremmer about what's really important at the buzzworthy annual economic forum.

Ian Bremmer 2013

FORTUNE -- The bloviating, partying, and high-minded panel-discussing that is the World Economic Forum in Davos, Switzerland, is just getting underway this week. Which prompts the question: What's really important this year?

To answer this, I called my favorite Davos Man, Ian Bremmer, just before he hopped on an airplane to Europe. He gave me his preview of what he'll be discussing in his public and private meetings during the week. (The swells who attend WEF actually refer to their one-on-ones in Davos as "bilaterals.")

If you're unfamiliar with him, Bremmer, 44, runs the political-risk consultancy Eurasia Group, based in New York. A political scientist by education, Bremmer wrote his doctoral dissertation at Stanford University on the impact of the imploding Soviet Union on the Russian Diaspora who would suddenly be expatriated from the Motherland. (He concluded that, for the most part, Russians had made themselves at home far from Russian soil and would do just fine under new regimes.) His firm, which he started in 1998, consults with large multinational companies, financial institutions, and governments which, he says, "observe the rule of law." He aims to provide "unvarnished analytical information and research," he told me. "I wouldn't want to be in a position to write something about clients that isn't accurate."

On a daily basis, Bremmer is in a position to offer opinions and analysis about just about anywhere in the world. I asked him to tell me his three hot-button issues heading into Davos. Overachiever that he is, he gave me four. (He also appeared last week with celebrity economist Nouriel Roubini in a session moderated by Rana Foroohar of Time magazine.) Notably, Bremmer believes the most pressing concerns at Davos this year will for the most part not be economic, which stands in contrast to recent years where subjects such as the eurozone crisis, U.S. fiscal embarrassments, and a feared China hard landing have preoccupied decision-makers and opinion-mongers in Davos.

Bremmer's hot list, below.

Chinese reform

Bremmer observes that the Chinese political leadership under President Xi Jinping is "more engaged in substantial reform than we've seen in 20 years." At the top of their list: corruption, financial-sector reform, a free-trade zone in Shanghai, and making state-owned enterprises more transparent to government leaders. "All of those things are really overdue," Bremmer says. "But they will create losers. The reason they haven't done anti-corruption before is that it will piss a lot of people off." For example, cleaning up China's massive shadow banking system will cut off a lot of credit, no small factor for economic and political stability in China. "This is why Xi has created a lot of power around his own person," Bremmer says. "He has an understanding that this stuff is not easy, and that his actions will create a backlash."

The reforms may well create an opportunity for Western companies. "Some will see that as state-owned enterprises are squeezed for capital they're going to be interested in working more with large multinational corporations," Bremmer says. "In this regard, U.S.-Chinese relations will improve. China wants more stability given all that is going on internally. At the same time, I don't think we'll see improvements in intellectual property and other cybertheft emanating from China."

MORE: Yet another China credit crunch: What's going on?

Renewed emphasis on U.S. foreign policy

Bremmer notes that the non-issue of 2014 -- the U.S. economy -- boosts the significance of US. foreign policy. With the conventional wisdom that the U.S. economy is not in decline, a major concern at past WEF gatherings, and with President Obama not burdened by budget showdowns and other crises over the domestic economy, his second-term team can focus again on matters abroad. Unfortunately, Bremmer doesn't see things going very well for the U.S., especially given that many of its allies are having a more difficult time with their own foreign policies. "Britain, Japan, and Israel have no choice" but to follow the U.S., he says. Ditto Mexico and Canada. "Everyone else is hedging. That creates problems for multinationals." For example, U.S.-based companies increasingly are being asked to prove they are not working with the National Security Agency.

As well, Bremmer isn't particularly high on the U.S. Secretary of State. "John Kerry is a smart guy," says Bremmer. "He's capable. But he wasn't Obama's first choice. He doesn't have the access to the President that Hillary did. He got his legs cut out on Syria. He doesn't know Asia well." Bremmer thinks Kerry does have a shot at completing an Iran deal; he is less optimistic about Kerry's chances brokering an agreement between the Israelis and Palestinians.

MORE: 10 most shocking NSA revelations of 2013

Emerging markets

Developing countries have, in Bremmer's view, a success problem. "As these places get wealthier their people demand more," he says. Citizens in Turkey, Brazil, and Thailand, for example, want accountable governance. "In that environment, political capital for leaders is hard to come by. The domestic environment is more challenging," and along comes an international problem: "With the U.S. coming out of recession and easing its monetary support, capital is harder to come by." This has hurt capital markets in developing countries, which creates domestic concerns. Bremmer's run-down of emerging markets to watch? Columbia and Mexico ("the next developed nation, which is great") are in good shape. Brazil and Indonesia look reasonably good. "Turkey looks horrible. India looks bad. Argentina and Venezuela are disasters. Russia looks bad."

MORE: Brazil's economic trap

Energy abundance, etc.

On that happy note, Bremmer turns his attention to a grab bag of other issues, including the ramifications of a potential oil glut. "Lots more production from the U.S. and Libya, plus Iraq in a low-growth environment mean prices go down. And then they go down again if an Iran deal happens. This is really problematic for petro states that haven't engaged in diversification and economic reforms." On the list of countries to be concerned about: Nigeria, Venezuela, Saudi Arabia, and Russia.

Bremmer concludes by noting that though we're not fretting over the U.S. economy or Europe this year, it's not as if everything is hunky-dory either. "It's a benign environment for the U.S. going forward. But Obama is unpopular. There is no upside for legislative gains. No free trade agreement, no immigration bill. No minimum wage hike. The gap between rich and poor is not moving. It's a true issue." He's not particularly upbeat about Europe, which is "just not an exciting topic this year. It's a hard slog. There's less concern about the eurozone collapsing, but there is no reason to do business there."

MORE: China's quest for a new energy source heads to space

But there's one good place for Ian Bremmer to do business in Europe, at least this week: Davos, of course.

  • Farewell, Switzerland: A Davos post-mortem

    From Jamie Dimon's defense of bankers, Mike Duke's less than rosy economic outlook, to the talking (and not talking) about the political turmoil in Egypt, here's a look at some of this year's highlights at Davos.

    Toward the end of another long day in Davos last week I phoned home to San Francisco, where the day was just starting. My four-year-old daughter asked me: "Why is your work in Switzerland, MORE

    Feb 2, 2011 10:53 AM ET
  • Why Davos was worth the trip

    There was a whole lot of talk at the World Economic Forum's annual meeting. But how much of it will turn into meaningful action?

    By Vineet Nayar, contributor

    When I arrived in Davos, Switzerland, last Tuesday for my fourth WorldEconomic Forum annual meeting, I found myself asking an odd question: What am I doing here?

    As described in a previous post, I kept thinking about the investment made in the 5-day event -- including MORE

    Jan 31, 2011 3:45 PM ET
  • Browsers get more (but not enough) privacy

    As several major web browsers begin to adopt stronger privacy measures, here are a few things that policymakers and business leaders should keep in mind.

    By Michael Fertik, contributor

    This week in Davos, the World Economic Forum is convening several sessions on digital privacy. (I am moderating one and panelizing and participating in others.) The WEF has taken a leadership role in this field, emphasizing the importance of privacy in the context MORE

    Jan 28, 2011 4:11 PM ET
  • In Davos, Egypt takes a back seat to economic issues

    The world's heavyweights are gathered to talk about carefully selected topics. An uprising doesn't make it on the official agenda.

    There are a few big stories this year in the sessions at Davos: The developed world's massive deficits, the rise of developing countries, the future of the euro.

    Off the mountain top, there is only one big story: Egypt.

    Davos, of course, is its own world, 1,600 miles from Cairo MORE

    Jan 28, 2011 12:52 PM ET
  • Apotheker on risk and (over)optimism

    I met for the first time this afternoon with Leo Apotheker, the new CEO and president of Hewlett-Packard (HPQ). We agreed not to discuss HP matters, given that he isn't quite ready to discuss his grand plan for the company.  (Yes, I traveled halfway around the world to meet the guy next door.)

    Apotheker is as charming and pleasant as I'd been told. If he has any ill will for my MORE

    Jan 28, 2011 10:57 AM ET
  • A CEO at Davos asks: Is Davos worth it?

    It's easy to see the benefits of global meeting in Davos, but the CEO of HCL wonders if there are better uses of the 75,000 executive hours.

    By Vineet Nayar, contributor

    What am I doing here?

    Maybe it was the change of climate or the jet lag or something I ate. But as I arrived in Davos today and gazed up at the snowy peaks, that's the question I was asking myself.

    Wait a MORE

    Jan 26, 2011 5:47 PM ET
  • Sorrell on running a multinational

    A good ad man can summarize complex thoughts in a way that's understandable to anyone, even a journalist. Martin Sorrell, CEO of advertising conglomerate WPP, did just that Wednesday morning in explaining his approach to global investing for WPP's business. As part of a panel on the economy on the opening day of the World Economic Forum in Davos, Sorrell likened WPP's world view to the way U.S. football clubs MORE

    Jan 26, 2011 3:40 PM ET
  • Rogoff on the economy: Not my biggest worry

    One consensus so far from the World Economic Forum is an unsurprising one: The global outlook is better this year than last.

    I found a perversely upbeat assessment of the economy today when I talked to Kenneth Rogoff, the Harvard economist who co-wrote the well received tome "This Time is Different: Eight Centuries of Financial Folly." I asked him the same open-ended question I'm asking everyone in Davos: What's the biggest MORE

    Jan 26, 2011 3:21 PM ET
  • Of green tech, white snow and red-hot air

    Critics like to fault the Davos conference for being a lot of hot-air conversations that might just as well take place somewhere else. This is fair, but incomplete.

    It began snowing Tuesday evening as I rolled into Davos, Switzerland, from Zurich, and it doesn't appear to have stopped. For even a mediocre skier such as myself the sight of gently falling snow and the sound of snowplows MORE

    Jan 26, 2011 12:58 AM ET
Search This Column
View all entries from this: Week, Month
Current Issue
  • Give the gift of Fortune
  • Get the Fortune app
  • Subscribe
Powered by WordPress.com VIP.