WEBINAR: 15 year veteran Alec Hogg spills the beans on Davos 2018

JOHANNESBURG — Davos is a small town in Switzerland that for 51 weeks of the year is quietly populated by locals and tourists. But for the other week, it becomes a hot bed of some of the world's greatest minds. Biznews was fortunate enough to send founder Alec Hogg and deputy managing editor Gareth van Zyl to cover the event, where they rubbed shoulders with ANC president Cyril Ramaphosa, and saw US president Donald Trump in action, albeit from a distance. The theme for 2018 was 'Creating a shared future in a fractured world'. It was Alec's 15th appearance at the World Economic Forum and this is his Davos Wrap. – Stuart Lowman.___STEADY_PAYWALL___.Welcome, it's a beautiful picture that I hope you can see nice and clearly that starts-up our presentation for today on the WEF (World Economic Forum). I got back on Saturday evening, so this is pretty fresh or hot off the press, if you like, and we've got a more beautiful presentation than ever in the past, thanks to the insights of Greg Beadle. Now, Greg is a photographer from CT who was brought into the WEF pool, there are 13 photographers who cover it on behalf of the WEF. He was flown all the way in from CT of course, we hit it off quite well and Greg very kindly has given access to some excellent photographs that he took. Before we get carried away on that side let's just find out from Stu, if everything is technically the way it should be. .Thanks Alec. To all the listeners can you please just raise your hands if you can hear Alec clearly and see the picture? Excellent, so we've got some sound and visuals. Just another thing – we like to keep the webinars very interactive so as questions come to mind please put them in the questions bar. It's on the right hand control panel, there's a little drop-down menu for questions. If you could just pop them in there and then I'll pass them onto Alec and we can get the conversation going quite nicely because I think it's a very conversational topic, Davos, but I think everything is good so over to you..Yes, it is conversational. In fact, let me just make sure that everybody knows that I am here and I am in London. There we go, you can see a little bit of the background from my office on the South Bank of London. Even London taxis so that's where we are and all dressed up for you today, with a jacket and tie on, and it isn't something that Standard Bank insisted upon I can assure you. Anyway, welcome to the BizNews Premium subscribers and also, to the Standard Bank Online Trading or WebTrader clients. We look forward to be in your company now for the next hour or so, depending on how many questions come through and Stu, I just want to check with you. Can you see the presentation nice and clearly?.Yes, it's a lovely picture there Alec, part of the Alps I'm gathering..Let's get straight into it, and this was the year of the snow. Now, I've been going to the WEF since 1993, which was the first time I went, and then I was away for 10-years and then went again in 2003 so, if you like, it's been 25-years since my first visit there and a total number of 15 WEFs that I've been to, and there's never been snow like this before. That picture was taken by a kind gent who was sitting next to me. As you can see, I didn't have a place to sit and this was on the bus between a place called Landquart and Küblis. What happened was and unusually for Switzerland was that there was so much snow that the train lines on the way to Davos were closed down, there was just too much snow..There were lots of concerns about avalanches and the mayor of Davos was very concerned that this was going to be a disaster because as it is, you get thousands or tens of thousands of people who descend onto this relatively small town during the last week in January. It's already traffic clogged-up but when there is continuous snow they can't even clear the roads so where you did have two-lane roads you now had single-lane roads, and it was a disaster for the first couple of days but then thankfully the sun came out. Those guys on the right hand side, I just had to take this photograph to show you, they are Yogis, and they came from India. India was very front and centre at this WEF. The Prime Minister Modi came in, which was the first time that an Indian head of state has been to WEF in a couple of decades. He came in and left within 24 hours so lots going on in his own country but a big Indian contingent and certainly for the beginning parts of Davos they were much in the highlight. Many people are looking to India as being the next sensational driver for the global economy, into the future..You can see the nice blue sky but one of the big things about Davos is always security. There are guards posted – this guy doesn't look too heavily armed but most of them are pretty heavily armed, the policemen and the guards all around the mountains and around the town itself so it takes a while to get from point A to point B. This year with Donald Trump arriving on the Thursday evening it was a little bit more stressful than before but this is just a lovely picture of Greg's to show you the security levels that there are..That's a picture of what was happening on the Tuesday. Huge snowfalls and this area is where you walk into the Congress Centre, as you can see with that little slide on the left-hand side, 'slippery floor.' Gareth van Zyl and I slipped a few times, fortunately not badly. I think if you slip on this black-ice, and particularly coming from SA, it's not easy to negotiate but we managed to get through it. Unfortunately, there were quite a few people who did slip and fall..Also, interesting this year for the first time I realised that the local people of Davos actually have a prayer meeting, which is a lovely touch, isn't it? For the full week, and it's been going on for 20-years that people get together in a church, (the locals) and they pray for the people at the WEF that the decisions that are taken are the right ones. It just shows that the whole town gets involved in this and not just those who are profiteering, and my goodness are they profiteering..This is an indication of the commercialisation of this little town. Also, to show you how far the crypto and blockchain has come. It wasn't really that strong on the agenda but around the WEF there were a number of these cryptocurrency organisations. Ethereum was there in full cry, holding events throughout the 5-days of the WEF, and they took over the shopping precinct. In fact, virtually all of the shops in this town along the promenade or their Main Street were closed and taken over by companies because the shopkeepers can hire out their businesses and receive, in two weeks rentals from companies like these cryptos. They could receive a full year's rental so they just vacate the premises for two weeks, take everything off site, come back in two weeks' time and their rent for the year has been paid..You can just see this as well how the participants or the companies – this is a Thomson Reuters display on your way to the Congress Centre. Deep snow there and you can stand and watch television if you want to, on a very clear picture..Star appeal always is at WEF. One of the reasons why lots of people go back year after year, after year, and that is a very well-known face, Cate Blanchett. She and Elton John, the musician, were the star attractions this year, as far as the entertainment industry was concerned. Both of them are involved in philanthropic exercises, as a result, they were awarded the Crystal Awards by the Schwab Foundation, which I guess is another way to ensure that you bring some really high-powered glitterati to make things even more attractive for those who attend..Those who attend are very well-fed as well. The countries tend to fall over themselves to show-off their wares. This was one of the lunches that had been arranged by a country, I think in this case it was Saudi Arabia. Interestingly enough Saudi Arabia made sure that its lunch was just before Donald Trump spoke so you had the bizarre situation of people filing into the Congress Centre or standing and waiting to get into the Congress Centre, and Arabic music was playing in the background at the same time. I don't know if they were trying to send a message but whatever it was, the delegates are pretty well looked after..Let's get onto what happened for SA, because that is the major thrust, as far as I was concerned. I went there this year with a bit of a different agenda. This was a big year, potentially, for SA, we all knew this. After the 18th December, ANC elective conference – Cyril Ramaphosa became the ANC president and as happened in 2009, when Jacob Zuma became the ANC president, the ANC president rather than the president of the country goes to Davos to lead the team. The president of the country pulled-out last year 3-days before, (Jacob Zuma), and in previous years he's been pretty invisible at the WEF. I guess he's a little concerned about his bad press that he gets internationally, and the kind of questions that he would be getting here because the international media does not hold back in its questioning. In fact, neither do the business executives, nor the NGOs who attend here and that's what makes this WEF so special, is that you get A-type personalities in the room and nobody is as diplomatic as you would expect them to be in a different scenario. Here, they're all falling over each other to make a point. SA this year was led by Cyril Ramaphosa, as it was last year, but last year he was called off the bench with only 3-days to go. This year he had a couple of weeks, and it was a very key event for SA..It didn't start too well though, and I want to just take you through a little bit of the developments in the first couple of days. This happened on the Monday, the opening press conference from the IMF (International Monetary Fund). This is the very first time they've done it at the WEF. That is the chief economist Maurice Obstfeld – it's just the angle from which I took the photograph that shows him, he then put on the table the fact that IMF has once again upgraded its global economic growth for the world. It went up by another 2 percentage points so things are going very well. A cyclical upswing in the world – happy days all over the world as it recovers from the global financial crisis and continues on its economic upswing. However, the news for SA was negative in that SA was one of the few nations to be downgraded by the IMF. I asked him in the Q&A time, after they had done the update and incidentally, this always used to be done in Washington. They moved it from Washington to Davos this year for the first time to update their forecast, and that just gives you another indication of the pulling power of the WEF..I asked him why, after the elective conference and Cyril Ramaphosa, and already the statements that had been about reforming some of the bad economic policies. Whether they would be reassessing SA? He said that he saw no reason to do so right now, and he said that maybe in 6-months time they can look at it again, but a very negative response from the IMF. Pretty much a question of, 'we're not buying it.' Similarly, we had on the right hand side and that is Bob Moritz, who is the chairman of PwC. Every year, just ahead of Davos, this is on the Monday night, PwC releases its CEO survey, which is a very important document. It is compiled after in-depth interviews with 1,300 CEOs around the world. Once again, the outlook for the world as a whole, is very bullish. CEOs have never been as confident as they were in this survey. Everything hit new records. Bob Moritz was pleasantly surprised, he said, by pretty much everything that came through except SA and Africa..I got hold of him afterwards and had a very interesting interview. It's well worth listening to. It's on the BizNews site and in that interview, he said that the CEOs are concerned about corruption, infrastructure, and the ability of Africa to leapfrog. They're aren't seeing anything like that happening. They have got many other alternatives around the world and they don't see Africa getting onto that list of the top-10 investment destinations any time soon. I asked him about SA and he too, just like the CEO of the IMF, Maurice Obstfeld, was non-committal and said, 'they would take a wait and see approach.' It was the 21st time that PwC brought out this survey. So those two didn't exactly fill me with lots of excitement, as you can imagine..Then this one really brought a lead-balloon into the situation. This the guy on the left-hand side is Richard Edelman, the Edelman's Trust Barometer is one of the most prestigious of the surveys that is brought out anywhere in the world annually. What it does is, it has a look at the trust that the public have, and they call them the informed public and the uninformed public, they break that up by the amount of consumption of media, etc., and how much trust the public has in business, in NGOs, in government, and in the media. So they have a look at those 4 categories. They put them all together and give them a rating. This year the trust in the USA from the informed public had absolutely imploded. Now, the informed public are primarily the people who voted for Hillary, but as you can see there last year the USA was ranked very highly. It was at 68 points. This year it went down to 45 and the comment, and this was what staggered me a little, the comment from the panelists was, 'America has fallen even below SA,' as though we were the bottom scrapers of the barrel of the 28 countries, and of course, we were. There we are, SA is second-last, and the USA is stone-last..In fact, we've dropped from just off the floor last year, with a rating of 49 down to a rating of 45 so it shows you how badly SA is perceived going into Davos. Remember, this survey was done between mid-October and mid-November so long ahead of the ANC elective conference, and ahead of Cyril Ramaphosa's appearance here. This emphasises it all, of the 28 countries, their trust in government. In 16 of them it had improved. It's interesting to see that China is right at the top there with a good increase in the level of trust, as is South Korea. They got rid of their president, President Park, who was apparently corrupt, but the USA fell back sharply, as you can see. They had the biggest decline, minus-14, and who's bottom of the table, and quite some way, even behind Brazil, is SA, down at 14 points. That means that 14% of South Africans trust its government. Again, that is going into the WEF meetings, this was on the Tuesday morning..So, if you're looking at all of these things as Cyril Ramaphosa or as a South African, you've got to be scratching your head and thinking, 'my goodness, we've got a lot of work to do,' which we know. Everybody in the country knows that but this really emphasises the size of the challenge..However, on Wednesday the sun came out and it's a beautiful little town, when the sun is shining rather than when the snow is there and almost, as soon as the sun came out – I hope you guys are enjoying these pictures, by the way..We had this cartoon in Daily Maverick by Zapiro, and it is just so apt. Now, Jonathan Shapiro, who is better known as Zapiro, has been a regular visitor to the WEF. He's regarded as something of a star in Davos, when he does go there. He wasn't there this year but he knows the setup and he knows how things work. As you can see, he talks here of the 'Cyril-spring.'.Well, he wasn't the only one talking about that. It became a little bit of a phenomenon after a period of time. It started off on the Wednesday, where Cyril was in a closed meeting for potential investors in SA. Now, let me just bring you up to date on what's been going on. Towards the middle of January Goldman Sachs, which is the most powerful investment bank on Wall Street, issued its annual report having a look at emerging markets and it rated SA as the hottest emerging market in the world. This was done in the wake of 18th December elective conference, when Cyril Ramaphosa was appointed. Goldman Sachs is very well plugged into the SA economy. Indeed, the SA chief, Colin Coleman, who is from the country is a regular attendee in all team-SA events, and he was at the WEF this year. His summary, I did a dual interview with him and Geoffrey Qhena from the IDC – two of the smartest guys you're going to listen to for their summary of the event, which is up on BizNews this morning, which is well worth listening to as well..At this event what was most interesting was that last year pretty much, no one went along to it. You had a few South Africans there. This is a private event for institutional investors, but this year they couldn't accommodate. It wasn't big enough to accommodate who wanted to go there. It was over subscribed and a very clear message was delivered by Cyril Ramaphosa, and suddenly things started catching fire. He said, later in the week that he was doing at least 20 interviews or engagements per day. Now, if you work that out into a normal 8-hour day, you'll see that that doesn't' even get you to 15 minutes an hour. As a consequence of this he worked long and hard, but the real hit that we saw came on the Wednesday evening, every Wednesday evening Brand-SA hosts a dinner at this venue. This is called the Kirchner Museum. As you can see, it's well branded by the country and Brand-SA's HQ is in this area so if you are in Davos and you want to go and see a friendly face you just pop into the Kirchner Museum and you'll see people wearing SA-branded scarves, and there's always a cup of tea for you there. It's a nice place to pop into regularly..On a Wednesday night though, they have a dinner. Last year Cyril hosted the dinner, and Pravin Gordhan was there – remember he was still the Finance Minister then, so much has changed in the past year. The dinner last year was hopeful perhaps, but primarily only South Africans. This year they asked us to bring foreign guests, well they do every year. I brought a guest who's a top banker here in London and he was very impressed, and the reason why he was suitably impressed as were pretty much any other of the foreign guests who were there, is because of this man..Now, this was one of the most impressive engagements or talks that I've ever heard. He stood, as one normally does, at the other end of the room where the podium was. As you can see, full-house with South African and foreign guests at the Brand-SA dinner. Last year it was probably three-quarters full maybe, the year before half-full – they really used to struggle to fill the room. This year they had to bring in extra tables but after a little while and after introducing himself he went, what we call at BizNews, off-piste. Cyril took the microphone and started getting closer, walking down to where everybody was sitting, rather than everybody looking up a him. Then he completely went off-script for 35-minutes. He spoke from the heart and he explained exactly what was on his mind and where the priorities were for the country and what he intended doing about it..Really, I had the good fortune for a little bit, surprisingly, because of your sleep deprivation at a place like the WEF. I switched on my phone to record it and we then had the address transcribed and put it up and BizNews and it's had 80,000 reads, which in our business, is pretty big. It's a lot of people who have actually read what Cyril Ramaphosa had to say, given that he was talking off-script. The last time we did something like this or saw something like this was when President Zuma spoke off-script a few years ago, and made a complete hash of things. When he said that, 'Africa is such a big place – all the other Continents would fit into it and all the other Continents had a river and Africa didn't,' and so on. He really, just made a mess, in denial if you like, of the realities of the world..This time round you had a superlative contribution, and I would urge you to go and read the transcript or go and listen to the president in waiting of SA, and he really focussed on three things. He said, 'the policy inconsistency is the message we're giving to foreign investors here, in Davos that has to be addressed. We are going to address corruption. There will be no mercy for those people who have been corrupt. They will be forced to face the consequences.' It was almost like he was urging those who have been part of the network of corruption to come forward and state their case. Interestingly enough, in the morning before this address we got the Terms of Reference for the investigation into State Capture, and those are pretty much as the former public protector, Thuli Madonsela, had them outlined in the past..It was one of the big problems for observers on the investigation into State Capture by the Deputy Chief Justice, the Terms of Reference. Well, those have been spot-on and very consistent with the message that Cyril Ramaphosa was giving here. The third thing he said was, 'we need to address state owned enterprises.' The work that has already been done at Eskom flows from his personal involvement and driving of that process. Part of the reason for that, he told us this evening was that he had received a memo from 400 managers, senior managers at Eskom to say, 'the place was in big trouble, please intervene.' He said that he also, while he was in the pre-Davos gathering with CEOs and other South African delegate people that one of the CEOs stood up and said, 'Mr Ramaphosa, you needn't even go to Davos if you don't do anything about Eskom.' Eskom is on the brink and people know this around the world. Remember, Eskom has funded a lot of its capital investments from foreigners. Eskom bonds are traded all over the world, and as a consequence of that he said, 'if you don't get this thing fixed up then you may as well not go to Davos.'.The other thing that Cyril shared with us this evening was that he was walking with his daughter, and there was a guy running and doing his exercise. He stopped and introduced himself. He said that this young man worked in the capital department of Eskom and he said, 'Mr Deputy President, you really have to do something about Eskom. Things are on a knife edge there, and we're in big trouble.' As a consequence of that a lot has happened. Cyril is behind the whole process. He's driving it aggressively. You've seen the very competent, Jabu Mabuza, being appointed as chairman of the SOE (state owned enterprise), and where Eskom goes others will follow, of that you can be certain..So, that was his message really. His message to the SA delegation, which he repeated in those 20-plus meetings a day with leading investment bankers and foreign investors who are looking at SA. The message is that we're going to address the inconsistency in our policies. One of the big ones there is the MPRDA, and you might be aware that that's to do with minerals and resources, and we've got the Mining Indaba coming up in the next few days. In fact, it starts next week so, something is going to happen between now and next week to give the miners the belief that this is a new SA with policy certainty..Secondly, corruption, and we've already seen the Hawks doing some rather interesting raids, and the third thing is the SOEs. So Ramaphosa is talking the game that rational people, to whose ears is absolute music. Of course, he's already starting to follow through. People will not believe it until things happen but he has certainly begun on that and the people who do believe it are those who were in Davos, and those are the power-mongers, if you like, who have the ability to change our fortunes..This was the press conference. Again, where the message was once more totally consistent. It wasn't a complicated message. It was a consistent message to say, we've made mistakes. The governing party understands that it has got problems and that we will not brush them under the carpet. In the past, there was only a perception that there was corruption. We spoke about it but we didn't really believe it. We've now grasped the nettle and we are addressing the corrupt practices. It was a consistent message that came from all of those who were at the press conference, and as you can see, Cyril Ramaphosa there making a point or two..What I found most interesting about the press conference was the chat that I had with Rob Davies, the Minister of Trade and Industry, afterwards. I did ask a question during the press conference – 'How have you guys found the difference between 2017 and 2018 in Davos?' They all said that it was almost like being in a different universe. In 2017, there was no real interest in SA. In 2018, they were run off their feet, and the way Rob Davies put it was he said, last year those who sought him out to have discussions with him were actually just wanting to complain. They wanted him to try and fix little niggles that they had, and many of them were unhappy and that they had investments in SA, but as it was there they had to kind of make the best of it, and so on..He said that this year, without exception, those who met with him, and he had a very busy schedule, he said that he was sought out by many people that he hadn't seen for a while. It was that they either wanted to expand their existing investments in SA or to bring new money into the country, and that's extraordinary. When these hard-headed businessmen, who do sail underneath the radar but do keep an eye on what is happening in the global arena and where the investments are. When they come to cabinet ministers of a country with a message that is so, dramatically different you've got to know that something big is happening on the ground. In the next couple of weeks, I'll be in SA going around the country to talk about why it's a good time to invest in SA Inc., this is one of the big reasons for it..Another thing there, Cyril Ramaphosa again, leaving the press conference. I like to see this. Often the state leaders are followed by up to a dozen, or sometimes even more hangers-on, who shield or protect them from the rest of the world, and here's Ramaphosa sitting on a golf cart after his press conference, and off he goes to his next appointment. By the way, I asked them, 'please slow down, I'd like to take a photograph,' and that's why they were laughing at it. They actually stopped and the fellow who's driving there, he does that during the whole of Davos..That's all he does is he drives his golf cart to the top, and brings them down to the media centre, but as you can see, a very confident, a very happy, and a very excited SA Inc., a terrific photograph here of Cyril Ramaphosa by Greg Beadle..If you were a man from Mars and you came down, and you saw this gentleman you'd have to say, 'man, he's intelligent, he's articulate, he speaks off-the-cuff, he has a great feel for global economics, he's got to be the star of the show,' but in fact, he wasn't. This guy was the star of the show. It was quite extraordinary – Donald Trump arrived in Davos to all kinds of conflicting messages, but he did bring… Remember, this is the ultimate protectionist. He's put America first. He's fighting free-trade. He's pulled out of a couple of trade agreements already. He suggests that he would like to pull out of NAFTA (North American Free Trade Agreement) as well. That's between the US, Canada and Mexico, and a few others. He's really got a blinkered-approach towards globalisation. He's on the other side of the fence, and Davos, and you'll see to Trump's left there is Klaus Schwab, and his wife, Hilde Schwab, is on the far left. The WEF is all about globalisation. It's all about open societies. It's all about promoting integration around the world and of course, Trump is the opposite..So, what would you expect? You'd expect Trump to arrive and to be either shunned or ignored – it was precisely the opposite. Now, whether this was because of a curiosity factor or whether it's because he just has this magnetic star appeal – it matters not. He lapped it up. On Thursday afternoon, by the way, when I or somebody else asked Cyril Ramaphosa whether he was staying for Donald Trump's address? He said, he would be leaving on Thursday night, as did many of the other global leaders, but many of the delegates at the WEF waited for the Friday morning address. When Trump came in there, literally people stood 4-deep to get a glimpse of this man and as he was walking into the centre, by the way, he brought 10 cabinet ministers from the US Cabinet, and one of the journalists shouted out and said, "Trump, you're not welcome in Davos." And this was the picture that Greg took immediately afterwards. He opened his hand and he said, "What do you mean, look around you." I guess he's got a point on that one because it really was a star attraction and a beautiful picture that Greg picked..Bonang Mohale, who is the head of Business Leadership SA, has been very outspoken on numerous issues, particularly on corruption in SA. He was pretty outspoken about Trump as well, and he called for a boycott and he was all over the international news as a result of that. Indeed, most Africans did boycott the Donald Trump speech primarily because of the comments that he allegedly made in a meeting with the democrats, where he called SA or the entire Africa, Haiti and El Salvador – 'sh*thole countries' and he hasn't apologised for it. Bonang felt that it was the right thing to do, not to attend the speech..Well, being a journalist that wasn't on my agenda so I went and stood in the queue and you can see there. This is 30 minutes before Donald Trump was due to speak, and look at the queue behind me. I'm looking forward towards the Congress Hall and that's the queue behind. It was a crush as people were just desperate to get into the Plenary Hall, which holds about 2,500 people. As the story turned out, I got to the front of the queue and this year I had a media badge, and they explained that that wasn't good for getting in with. I had to go through a specific media entrance so after 30 minutes of being jostled and squashed and everything else, only to be turned away. I was a little unfortunate. I went off to the other side but there were only 150 seats that had been reserved for media and those had clearly been taken long ago so, that meant that I wasn't in there. Then I was following Bonang's boycott recommendation but, of course, not willingly but just because I couldn't get into the hall but it gives you an indication of the star appeal of the man..Not everybody was star struck. These two gents were having a nice smoothie and a chat, and it was good to chat with Lesetja Kganyago, the Reserve Bank Governor. This was while Trump's speech was being made, and he mentioned to me that he would regard this as the most successful WEF that he's had in many a year. Last year he said, people met with him out of politeness and/or out of courtesy. But he said that this year they sought him out. This year people from all over the world were looking for him, other central bankers, bankers, etc., they were very keen to get into his diary to have conversations with him. There is an excitement and there is a buzz about SA's delegation and not just at the WEF but because of the transformation that is happening in the political environment. There he is with Khaya Ngema, who's with Transnet and also, talking off the record. You don't really want to let too much of this out, but they were talking about the excitement that exists within his organisation as well, at the transformation that we're seeing..Getting back to Donald Trump – this was where I was standing outside. Greg came out to take a photograph of it as well. Remember, you've got Trump inside the Plenary Session talking to a full audience and here is a television screen outside and you can see people actually taking photographs of the video screen. What did he say? Well, it was pretty much what one might have expected. He's America first. He doesn't like China and that we know. He talked tough on going against China because of the way that he perceives that they're stealing intellectual property, and they are subsidising their exports. As you might be aware, America has recently put duties on to Chinese exports so the beginnings of a 'Trade War' are being seen there as well. The speech was very tightly scripted, written by Gary Khan, who's one of the former bosses at Goldman Sachs, and who is now very close to Trump and helping him to understand or at least put out the right message to the world. It said pretty much what you might have thought..I thought it was underwhelming. Some of the international media were impressed, and certainly in the hall itself, from what we could see on television, the people who were at the event were quite impressed because they clapped for him afterwards. Interestingly enough, when he arrived in Davos where we were standing 4-deep, and he was suggested by a journalist that he was unwelcome. At that point in time, there was no clap, there was no cheer, there was no boo, there was nothing – it was just silence, which was very strange. You had this huge crowd looking on at a man who stopped as an Emperor would have in the Roman days, I guess, and waved at the crowds. I didn't see too many people waving back but no one said a word. This time, however, when he was in the Congress Centre, after his speech there was clapping and from what you could see on the video, people at least in the first few rows gave him a standing ovation. So it's an interesting contrast to how Trump was perceived here..Once he went off-script he wasn't anywhere near as good as when he was reading from his script. He had 3 teleprompters in front of him, and having been in the television industry for a while you pick these things out, they're highly sophisticated now. It's like a perspex screen with the words that you can read from it. So, as he turns his head across you can see that he's reading from the teleprompter. Then after he had his speech he was asked a couple of questions by Klaus Schwab, the WEF Chairman, and he wasn't quite as tight and focussed during that engagement and claiming, strangely, that the US stock market boom is up 50% since he was elected – he's taking total credit for that. He said that if Hillary had been elected rather than him the sock market would be down 50%, but those are the kind of Trump statements that we've come to be used to, and anybody who says it, is told that they are participating in 'Fake News.'.That is the feedback from the WEF. There were three other big things that perhaps are just worth dwelling on quickly. The one is – this was the year when I saw blockchain coming more and more onto the agenda. Cybercurrencies – most people who were at the WEF did say that cybercurrencies are in a bubble and that the bubble would burst and the governments would try to regulate it, at the very least, as they have done through history. It really was a dangerous game that those people who were buying Bitcoin, or some of the other cybercurrencies, were playing. There were many of these questions in sessions, from the IMF through to some of the other press conferences that I attended – it appeared as though the public wanted to know and the media wanted to know more about what's going on with cybercurrencies and Bitcoin. But the participants kind of dismissed it and they felt that maybe we've got a change here. We've got the status quo being challenged. It is however, something that a lot of people are paying attention to so, those were the one issue..The big issue for SA is that the country is being perceived, after a dreadful start, that was 'turned on a tikkie,' as you might remember the old saying, and there was a great interest in the country and a great belief that Cyril Ramaphosa is going to be making a huge difference to it. We'll see at the next instalment, which will be at the Mining Indaba and that should be an interesting one. The third big point to come out of it is that the global economy is in excellent shape. It is a cyclical upswing, true, and those countries that have not done reforms, structural reforms, and have allowed themselves to still be in the same situation that they were in, going back to the time of the global financial crisis, are going to be in trouble, but the countries that have done the reforms are not going to be in trouble. SA is in the first category, i.e., it hasn't reformed its economy – it hasn't used the difficulties of the past few years to get things right. In fact, it was on a completely weird path, but it has now got somebody there who is prepared to implement the National Development Plan..Something else that I haven't mentioned as well, which is aligned to this, is Zimbabwe. The Zimbabwean president, Emmerson Mnangagwa, was there as well. He also had lots of meetings. There was a lot of interest in him. I spoke to him on the phone to try and set up a meeting, which I had been promised but by the time he was able to really assess this – he was so inundated with foreign investors and others who needed or wanted to see him that I was quite happy to step-back because obviously, there were bigger priorities. So, I didn't get my meeting with the Zimbabwean president – maybe next time. That's the wrap up of the WEF. Stuart, if there are any questions, should we get to them now?.Thanks, Alec. Two questions from Andrew and they are on SA. He asks, 'is SA in a turnaround or do we need to wait for more proper signs?' Then off that he wants to know what was the feeling around the UK, with Brexit etc. at the WEF?.As far as SA is concerned it is… If you recall during the time of CODESA, as you can see I've got a bit of grey hair so, I was around then. Before CODESA started there were talks about talks, CODESA being the talker so, there were talks about the talks, and it's a little bit like that. There's talks about the action that's going to be taken. The action has started and SA's economic turnaround will be stimulated by the decisions that are taken today so, it's almost like the higher up the totem pole one goes in an organisation, in a country or within a company, the longer it takes for the decisions that you make to be felt on the ground. However, SA has stopped going down. The decisions that have been made recently on attacking or charging the corrupt people on changing the management at SOEs on addressing the policy uncertainty. All of those things are ideas or issues that have been keeping money away from the country. Now that you address those issues investors will come back into the country, and there is a massive amount of goodwill towards SA. More so, this being Nelson Mandela's, who would have been 100 this year so it would have been the 100th anniversary of his birth so, it's an opportunity for SA to really use it, and that Mandela's anointed one is poised to take over as president of the country. So, all of that puts the country in a good place but also, the fact that the ruling party is no longer in denial. It has accepted what the issues are and it's hellbent on addressing them, which is music to the ears of foreign investors..So, is the economy turning around yet? No, of course not. At least it can't just because we will it to happen but you've got to understand that the elevated emotions, and if you're in SA – I'm sitting here in London, but from all of the engagements that I have with people back home, the feeling is that the emotions are being elevated. Cyril says that he's going to appoint patriotic capable South Africans, who love their country and do not want to put their families and themselves first because there's a huge turnaround to happen. As you see those appointments going through, and more and more you'll see the high calibre of persons being put into important roles within the governing structures in the country. You will see the impact that they will have because when you are leveraging a tired, old machine like this or a machine that has been going downwards – you have low hanging fruit, and you have very quick wins to be made. It's likely that you'll see that in the short-term. Of course, the Rand tells it all, doesn't it – the share price of SA, which has rocketed since Ramaphosa came into office. It's below R12 to the US dollar, it was worse than R14 before he came in..As far as the UK is concerned – it was very quiet, surprisingly enough. Theresa May did speak and she had polite applause. She said very much the stuff that she's been saying throughout, good, solid, we believe in the rule of law – we believe in a rules-based trade, we believe in all the good things that democracies propose. We also believe in an exit from the EU (European Union) that will be measured and done responsibly and sensibly. The UK delegation again, they would have been happy with her competent management of the global community but there was nothing to change any opinions, one way or the other..I have two questions on the Trust Barometer that you mentioned, from Edelman. Trevor, who resides in Sweden, but he wants to know why are they (Sweden) so low, as well as Japan, from Deon – he doesn't quite understand it. As a comment he said, 'would it be that they're selling inappropriate airplanes to SA?' I think that's just an off-the-cuff joke..The sales of planes to SA would certainly not rank here. It's an interesting survey this, 33,000 people are polled around the world. It's been going for well over a decade now. Why is Japan so low, or did you say Sweden? Sweden is not bad..Yes, Sweden and Japan..Sweden is above Australia, above Spain, above Germany, and above the UK – that's not bad, I would have thought. I would love to see SA up there and indeed, a big change from last year. If you have a look on the right hand side there it says, USA down 23 but Argentina and Sweden up so, clearly, Sweden is lifting its head again and getting into a better position relative to the market. Argentina of course, Macri, the new president there, who was the former mayor of Buenos Aires and a former businessman, who's doing amazing things in Argentina, so there's an upliftment. It's almost like what you see happening in Argentina is the potential for SA – to see this significant improvement..As far as Japan is concerned well, there should be no surprises there. Japan just can't get out the starting-blocks. They've thrown money at the economy. The government has tried everything they can and they just can't get going. They can't get their economy growing so that's part of the reason why the informed public in Japan don't really trust Abe and the other leaders. You can see Russia and Poland also on that graph down towards the bottom..Another question; do you think Cyril is waiting on the outcome of the State Capture Enquiry to remove some of the top 6 that are implicated? I ask this because it would be hypocritical of him if he were to continue working together with those implicated..That's a really good question and I wish I had an answer for you. My own feeling on this is that Cyril Ramaphosa is playing this brilliantly. In Europe or in some other parts of the world when one of your leaders who might have previously been highly esteemed has a misstep or goes in the wrong direction. There's no compunction from the communities there to proverbially chop his head off, and to display the head to the masses as a person who was all bad. Of course, nobody is all bad or all good, and many people were pretty good in the past. As far as Africa is concerned there's a far more dignified approach towards this kind of dismissal, if you like, of the leaders. Even if you have a look at the way that the new Zimbabwean government and the Zimbabwean people have treated Robert Mugabe, who almost single-handedly has been responsible, at least in the last 20-years, an imploding economy that's shrunk to a fraction of the size of what it was before he took over. He's being treated with dignity because he made a huge contribution to the country, at a time when they really needed him to..One shouldn't forget that the ANC is still a liberation party. They've still got leaders who have sacrificed enormously in the past. Jacob Zuma was in jail for 10-years, on Robben Island, whatever else he's done subsequent to that, and peoples' memories are longer in Africa. So, Cyril Ramaphosa has a tricky task. Everybody knows the ANC has lost its way. He admits it, as does any other rational person working within the ANC. The best way to address this is not to get personal and to allow the law to take its course, and that's the smartest way of addressing it. He cannot now go against those who voted for the top-6 and suddenly fire them – I don't even know if the constitution allows him to do that, those who have been appointed to those positions, but what he can do is he can have the law interrogate whether or not these people are suitable to be holding those positions, and that's exactly what is going on now..I don't think he phoned up the head of the Hawks and said, 'go and look into the Vrede Farm and raid Ace Magashule's office.' That's just not his style, but what he will do is he will most certainly, as Nelson Mandela would have done, give the authority and support the authority or the institutions who have the responsibility for doing that kind of work. I don't know what's going on in his head but I do know, from what we heard from him and from his very clear, direct approach, is that those who have been corrupted are going to pay the penalty. I pressed quite a few of the cabinet ministers, in both formal and informal discussions, and the response that I got, because my thought was, well perhaps it's time for SA to have another TRC (Truth and Reconciliation Commission), where those who have done the wrong thing and who are corrupted can come up and admit, and get on with their lives and we can all get on with our lives. The response was, 'no – corruption is a crime, and if we don't deal with it properly, as the law says we should be dealing with it then we are sending a message to the next generation, which will be a very unfortunate one, because it would put us onto the wrong path.'.So you can expect many newspaper headlines. You can expect lots of drama. You can expect lots of excitement around this, but the reality is the wheels of justice grind slowly but they grind very finely, and we can trust in the SA institutions. They have been stress-tested. They have held-up. They have not been subjugated by the forces of evil, and they will be coming more and more into their own in this regard. Of course, the big question here is how many people are going to go into the tell-tale or the tattle-tale room, as Paul O'Sullivan calls it. There's only so much space and not everybody can turn State's Witness. Both Bonang Mohale and some of the other people that I spoke to in Davos said that they've been inundated with whistle blowers or people who are coming out of the woodwork now, who were involved in these networks of corruption. It's a bit of a free for all to see who can tell the most and prove the most so that they can get the most immunity, suspended sentences, or light jail sentences. We're into this process now and that is what's going to determine the future of politicians, as well as people in business and in society..Gavin just wants to know if anything was said with regards to the infrastructure and water infrastructure of Cape Town, as day-zero is fast approaching. He said that it's an important city but there are also problems in the Eastern and Northern Cape so, he just wants to know if anything was addressed..Yes, we did ask at the press conference. In fact, that was one of my questions, was to ask specifically what is going on with water in the Western Cape. Central Government says they're on it, if you like. They couldn't really give us much more detail. Whereas in the past, you might have accused central government of some kind of politicking. These guys, the guys who are now calling the shots are not doing that at all. They're very concerned about it and they are addressing it. That's about as much as we got from them..Costa wants to know if you think enough was done to spare SA's downgrade by Moody's next month?.I think so. I think Moody's is going to listen to the mood. They're going to listen to what's being promised, and they are going to take the turnaround in attitude for what it means, and it does mean there's going to be action. If, however, we come in 6 months time and there's been very little done then Moody's will almost certainly do the downgrade. Remember, it's on negative watch and the negative watch was put there ahead of the ANC elective conference. You do have almost a change in government within the ANC. With the one grouping, the Zuma-affiliated grouping who had a different economic agenda, and a very poorly managed one as we can see from all the statistics, and the rise in debt, etc., a misguided one – they're out of the picture. The people who are in the picture now are very aware of the potential of the country and what needs to be done, and to align it within sensible economic policies..Interesting thing about all of this is as much as we hate the legacies of colonialism and apartheid, and issues that have put SA and Africa, indeed, on the backfoot. There is only one economic law. There are not many laws in economics. You can't say well, okay so, let's try communism or socialism because maybe the Russians just didn't do it properly. We'll get it right this time. That's not the way economics work. Economics works on the basis that you can only spend what you earn and if you keep spending what you don't earn and you borrow to do that, eventually there'll be a day of reckoning. That's the reality of it, and what Cyril Ramaphosa and his team are now going towards is exactly aligned with what Moody's and the other rating agencies have been saying, and the IMF by the way, and the SA Reserve Bank have been saying, these are the economic laws – let's just abide by them..I don't know what's going through Moody's minds but they have shown an ability to listen and to give SA the benefit of the doubt, even in incredibly difficult circumstances. This is now a circumstance where one would hope that they don't continue to punish the country for past sins, and that they, once again, give it the benefit of the doubt..A few questions on the Rand to sum it up. Has the Rand strength exceeded the hype or do you think there's room for further strength? I know you don't normally forecast but do you have some thoughts around the currency..I think I remember, a very wise man once said to me the person who signs assurity is a fool with a pen. I think that the person who predicts the Rand is in the same category. The Rand, although we did say just ahead, and those of you who've followed the webcast with the Global Portfolio last month, ahead of the ANC elective conference, we did say we believed that the right thing would happen and that Cyril would be elected and that the Rand would rebound strongly but it didn't make any sense for us to sell out the whole portfolio just to take benefit of that (that would be trading)..When it comes to the Rand – it is now into a bullish period. Whether it's overshot in the short-term, only time will tell us but even by most criteria, we're starting to get to the point where the Rand is fairly valued on existing circumstance. Once the new economic policies can be implemented – once the National Development Plan starts getting dusted off and starts being put in there. Once we see foreign investors bringing their money, where their intentions lay, the Rand could strengthen further, so it never is a one-way bet but even at these levels it does have room for further appreciation. .Guy wants to know how we get the rating downgrades reversed?.Well, you don't get them reversed because they've been downgraded but what happens is that you now instil the correct policies and the ratings agencies then come forward and make a decision. Remember, rating agencies, what they're doing is they are deciding on whether or not you're going to be able to meet the debt repayments and the interest repayments on your debt. So, if there's a higher risk of default, and there have been defaults in the past. Argentina, which is now clawing its way back up the ladder, it had some dreadful defaults 30 to 40 years' ago. Russia has defaulted a number of times, but the closer you get or perceive to get to a default the more the international borrowers are going to expect you to pay for the money, (the price of the money), and that is determined by the ratings agencies. .Will the ratings agencies reverse and make SA investment grade again? I think we're going to have to see concrete evidence, rather than talk, before that happens. The first step is to stop the negative watchers because what would happen in the ratings agencies – they downgrade you, and what's happened to SA, we've been downgraded with a negative watch, which means that the next update they downgrade you again because there's a negative watch. You want now to just turn those negative watchers into neutral, or even positive, and neutral would probably come at this point so, in other words, you're not downgraded another notch. You just stay where you are, and then as the concrete evidence comes through the likelihood there is that you'll get upgraded but there are many challenges. .Let's not underestimate – we've had 10-years over very bad economic management. We've had the debt to GDP ratio, which has just ballooned. We've had SOEs that are on the verge of bankruptcy. We've had looting on a scale that was only seen previously in Brazil, and they've put more than three-dozen very powerful people in jail as a consequence of it. There's a lot that needs to be reversed before people like ratings agencies are going to say, 'fine, SA, we love what you've done – we now believe that you are on the right track and we believe that you are at investment grade again.' Investment grade is the level where, essentially, massive pension funds around the world can put their pensioners' money into those bonds or securities of the countries involved, and not be concerned that they're going to lose it..Just two questions to close off with. The first one is, aside from SA, are there any new tech themes to come out of Davos? CNN was saying earlier today that AI (artificial intelligence) was a hot topic but there were concerns about China's technological progress in this field and others – just some comments on new themes..Yes, AI is a hot topic indeed. It's funny, but this year in Davos it was almost like the Donald Trump story and then there was also, from our perspective, the SA story. It was a sensational SA story and Donald Trump is sensational, no matter whether you like him or hate him. In between that the normal themes continue so, the progress in areas like blockchain, or AI it continues at a pace. The other big story that I haven't mentioned that was big there, was the antagonism towards big tech. So, more and more we're seeing countries are aligning themselves against the power that Facebook and Google, in particular have. So, by using their AI to get to know us better as individuals so, that's a theme. I'm not nervous enough yet to sell Google and Facebook shares, but there is a definite marker and/or a definite flag that's being waved there. .George Soros, incidentally, in his talk and I haven't even mentioned that, but again, that's up on BizNews with the full transcript. In his talk he focussed on two areas. He spoke about the whole world. He thinks Trump is a danger for the world, by the way, and then he also focussed on the other big area, which is big tech. What we're seeing increasingly is that Google and Facebook are using our information, i.e., the users of those products, and that's why they can give it to us for free because they're using that information to have an advantage by using AI, in selling to us. Now, where do you draw the line? How much of our private information should they be entitled to or indeed, should they not be paying us for that private information? These are the big debates that are going along now, and are starting to emerge in Davos. .The 4IR is still very much on everybody's minds. The changing in jobs, the decisions on where we should be upskilling, and all of those issues are as before, as you would anticipate in the years ahead, but those themes of attacking big tech and AI are just getting more and more integrated into our societies and the economy, generally, in a good place for the moment but it's a cyclical upswing. I.e., like a normal cycle it will peter out at some point in time. Those are the big issues..Just to close off with, both Peter and Gavin want to know where you'll be presenting and when? Then Gavin has a little cheap shot here, he wants you to please give him your 2018 stock pick, just in case he can't make it..Okay, these are with Standard Bank. I'll be in CT on the 7th, in Johannesburg on the 8th, and in Durban on the 12th – all with Standard Bank. Those events are open to BizNews Premium subscribers. We have a few tickets that Standard Bank have kindly given us, and obviously, also to Standard Bank clients. So, we'll confirm all of that in the next couple of days. I think we might need to have some kind of a lottery for the BizNews Premium subscribers but it is one of those benefits that you get..There are other presentations that I'm also doing but those are more closed. Those are the 3, as far as this webcast is concerned. Don't forget tomorrow, we have got our Global Portfolio update so please, if you're interested in our Global Portfolio, and who isn't because it's been growing at 30% a year for more than 3-years now, then join us again tomorrow, same time. Make a date, and you're going to be sick of me by the end of tomorrow, I'm sure, but hopefully there's a bit more knowledge that will help..Excellent Alec. I think that's it from my side, thanks a lot for your time and it's always nice to send yourself and Gareth to Davos – I think the feedback was fantastic on the website, and you summed it up quite well here for us..Thanks Stu. It was another year and Gareth van Zyl was an absolute star, my colleague from BizNews. It was his first time there and he didn't slip and fall on the ice, which is quite good for a boy from the East Rand. He also did some terrific interviews and had a great time all round so lots of knowledge there. I'm sure he's really looking forward to going back again next year. There's lots on BizNews so if you want a little bit more supplementary information, if you like, we really did produce a lot of content for you there. I look forward getting back to SA – it's not so cold anymore here, Stu, I must tell you. The weather is already perking up a little – we're getting above 10 degrees, would you believe. In Davos it wasn't that cold either. I think we had 6 or 7 degrees on a couple of days, apart from the beginning, which was very chilly. But it's always lovely to come back to sunny SA, and I look forward to seeing you guys next week.