Selected highlights from the second key day of the World Economic Forum in Davos, Switzerland:
TOP STORIES:
German Chancellor Praises Ukraine's Resistance, Warns Against Economic Protectionism
Russia has failed to reach its goals in Ukraine, and the invasion has made the West more resilient and accelerated the decarbonization of its economies, German Chancellor Olaf Scholz said, speaking at the World Economic Forum conference in Davos, Switzerland.
Almost a year after the start of Russia's invasion, Mr. Scholz struck a positive note as he commended Kyiv's successful resistance, helped by Western military assistance, and described how Germany and its partners had buttressed their economies and become independent of Russian energy supplies.
Mr. Scholz also warned about the danger of protectionism and fragmentation as governments race to shield their economies from the impact of the war. Without mentioning the standoff between the U.S. and China, he cautioned against a global economic decoupling between East and West.
---
In Davos, Leaders Fret Over Fragmenting Global Economy
Geopolitical rivalry, technology decoupling and protectionism have increasingly altered the world's business and political landscape, adding new risks and threats and, for some, opportunity, say executives and officials at the World Economic Forum.
"We are very concerned about geo-economic fragmentation," said Gita Gopinath, the number two official at the International Monetary Fund, in an interview. In conversations with member countries and in Davos, "This is something that comes up a lot."
---
Ukraine's First Lady Says She Delivered Invitation to Dialogue to Chinese Delegation
Ukraine's first lady, Olena Zelenska, confirmed on Wednesday that she delivered a letter to the Chinese delegation at Davos, calling it an "invitation to dialogue" with China.
Ms. Zelenska said the letter was addressed to China's President Xi Jinping and outlined Ukrainian President Volodymyr Zelensky's vision for peace in his country.
---
INTERVIEWS AND PANELS:
Big tech companies will have to get used to becoming more productive with fewer resources, Microsoft Corp. Chief Executive Satya Nadella said, as layoffs mount across the tech industry amid economic uncertainty. Speaking at the World Economic Forum in Davos, Switzerland, Mr. Nadella said the tech industry had grown much faster than GDP in recent years but would now need to do more with less. "We are going to go through a phase today where there is going to be a normalization of demand," Mr. Nadella said. "We in the tech industry will have to get more efficient--it's not about everyone else doing more with less, we will have to do more with less. We will have to show our own productivity gains," he added. Mr. Nadella's comments came shortly before Microsoft said it would lay off 10,000 employees.
---
A panel on risks facing international banks produced several interesting tidbits on under-appreciated financial risks and funding the energy transition:
---
UBS Chairman Colm Kelleher said banks were healthy but warned about risks building in so-called nonbank financial institutions. "Banks and insurance companies are well-regulated. I think they're systematically safe," Mr. Kelleher said. "But I do think regulators have, with respect, taken their eye off the ball in terms of the non-banking, NBFI sector," which includes entities such as insurers, pension funds and investment funds.
---
Citigroup Chief Executive Jane Fraser said her bank had no plans to stop funding new oil-extraction projects, as HSBC pledged recently. Ms. Fraser said recent energy shortages showed the need to make the transition to alternative energy sources cautiously while continuing to finance oil. "We need to have energy security and we need to be operating on cleaner technologies," she said. Meanwhile, a drop in global dealmaking is sapping investment-banking revenue at Citigroup and other banks, Ms. Fraser said for Citigroup that is being offset by a burst of activity in other areas such as foreign exchange.
---
Three years into the Covid-19 pandemic, the world is in some ways unprepared for the next global health crisis, Pfizer Inc. CEO Albert Bourla said Wednesday. Governments have not made changes to speed responses to an outbreak, and in some cases have undertaken regulatory moves that could hurt future drug development and innovation, Mr. Bourla said in an interview with The Wall Street Journal at the World Economic Forum here. Mr. Bourla criticized some aspects of the law dubbed the Inflation Reduction Act, which has a measure meant to blunt drug prices, and said regulatory agencies around the world had become more strict after the pandemic. "There's a huge effort to go back to the past," he said. "They're trying to be more conservative than ever."
---
Many shoppers and product manufactures need a financial incentive to make more sustainable or climate-friendly choices, Walmart Inc. CEO Doug McMillon and other executives said. Some shoppers buy with the climate in mind, but "there is also a very big part of the population that is under price pressure and can't afford to make some choices that might cause them to pay more," said Mr. McMillon, speaking during a panel discussion at the World Economic Forum. "Our job becomes one where you must design a system so that the easiest path, the lowest-cost path, no negative tradeoff associated with it is actually the more sustainable path," he said.
---
European energy companies need help from governments to better protect the region's energy infrastructure from possible physical attacks or sabotage, said Anders Opedal, CEO of Norwegian oil & gas company Equinor. "Normally companies have been able to maintain and develop that infrastructure themselves... but now it is also about protecting the pipelines and the critical infrastructure, making sure there is no sabotage," he said. "Companies cannot do that alone. We need more broad collaboration between companies and governments to do this."
---
Europe should avoid a recession this year despite high inflation and economic uncertainty, Bank of France Governor François Villeroy de Galhau told a panel discussion at the World Economic Forum in Davos on Wednesday. The war in Ukraine and Western sanctions against Russia have taken a heavy toll on the European economy, disrupting trade and driving up inflation. "We have a slowdown without any doubt," Mr. Villeroy de Galhau said. "But activity is more resilient than what we expected three months ago," he added.
---
From earlier Wednesday:
ESG is here to stay. That was the message of Bank of America Chief Executive Brian Moynihan as he responded to criticism of the movement pushing companies and investors to consider environmental, social and governance goals. CEOs view ESG goals such as combating climate change and making their workforce more diverse as integral to the long-term health of their companies. "They're going to run the companies based on a view of how to create long-term value and I don't think that gets derailed" by politics, he said.
---
Japan's economy isn't at the stage when monetary policy can be normalized, economy minister Yasutoshi Nishimura said, after the Bank of Japan maintained its current ultra-easy stance at a policy meeting. "At this point, the way ahead for the economy is unclear. That's the way I understand the Bank of Japan's decision to keep policy on hold," Mr. Nishimura said during a panel discussion at the World Economic Forum in Davos, Switzerland.
---
Moderna Inc. plans to expand its mRNA vaccine production capacity, saying shots targeting different pathogens can be made in the same facility, Chief Executive Stephane Bancel said. "This is what gives me hope, not only for [coronavirus] variants, but also for other vaccines," Mr. Bancel said on a panel at the World Economic Forum in Davos, Switzerland. He cited Moderna's recent developments in RSV immunization as another application of the mRNA technology besides targeting Covid-19.
---
Saudi Arabia, the world's fastest growing major economy and a top foreign-aid donor, has begun to condition its development assistance to other countries on the sort of ambitious economic reforms it has implemented at home. "We wanted to be a role model for the region and we are encouraging a lot of countries around us to really do reforms," Saudi Finance Minister Mohammed al-Jadaan said Wednesday.
---
Fully autonomous trucks, without safety drivers, could be on American roads within five years, said Volvo Group's chief technology officer. Lars Stenqvist, a member of the Swedish truck maker's executive board and executive vice president for truck technology, said the U.S. was moving faster than other places in experimenting and testing autonomous vehicles. "Confined areas are the starting point, it's happening today," Mr. Stenqvist said. "The big thing is highway operations. We certainly believe in highway operations. We see the starting point, the market that will take off first, is the U.S.," he said.
---
The current mood is mixed, there is finally light at the end of the tunnel insofar as inflation is concerned, and there is general optimism, according to JPMorgan EMEA CEO Viswas Raghavan. Abundant cheap money has now gone and there is finally a supply constraint and a cost of capital, Raghavan says in a Bloomberg interview at the World Economic Forum in Davos.
---
Reaching Uber Technologies Inc.'s goal of becoming a zero-emission transportation platform in the U.S., Canada and Europe by 2030 will be challenging, said Jennifer Vescio, the ride-hailing app's chief business development officer. "I fully admit the goal is going to be aggressive," Ms. Vescio said on a panel at the World Economic Forum in Davos on Wednesday. She said the company could meet that target, but it would be dependent upon partners including car manufacturers adopting electric-vehicle technology relatively quickly.
---
(MORE TO FOLLOW) Dow Jones Newswires
01-18-23 1204ET
