Davos Diary Day 2: Presidents, Prime Ministers, business leaders and a cheer for Brand SA

Alec Hogg's second day in Davos, Switzerland at the World Economic Forum showcases not only the essence of the high-profile meetings in the Alps, it edifies the case for bringing the world's leaders together. In this podcast Alec takes us through a day that was power-house packed to say the least; starting off with an intimate and sobering address from Ukranian President, Petro Poroshenko; moving to gatherings with Italian Prime Minister Matteo Renzi and Finnish PM Alexander Stubb, highlighting the challenges facing economies and increased geopolitical tensions; ending off with having a one-on-one with PwC's Global CEO, Dennis Nally about the PwC CEO Survey indicating more pessimism being felt by leadership this year. As if the day's festivities weren't enough it finally rounded up with a Brand SA dinner with the likes of SA's Minister of Finance, Nhlanhla Nene. Phew! Have a listen or a read to get all the details, insights and good reasons to be positive about South Africa's little democracy. – LF 

[soundcloud url="https://api.soundcloud.com/tracks/187262273" params="color=ff5500&auto_play=false&hide_related=false&show_comments=true&show_user=true&show_reposts=false" width="100%" height="166" iframe="true" /]

ALEC HOGG: It's Wednesday, the 21^st of January and it's Alec Hogg reporting for the Biznews community from the World Economic Forum in Davos. This is Davos Diary: Day 2. Well, Wednesday is usually a day that the conference centre is overcrowded and bursting at the seams. Everybody wants to get their little slice of the action on the very first full day of the World Economic Forum's

Annual Meeting, and so it was again today. Fortunately, I didn't have to join the crowds because of a wonderful program that had been put together by the WEF for the International Media Council, of which I get invited to. I had plenty on my plate without having to look for sessions elsewhere. The first of these (the big one) for me, of the whole conference was the grouping that got together to listen to the President of Ukraine, Petro Poroshenko.

The IMC is about 60 members and I think every single one of them were there today to listen to Poroshenko. I have never seen the room as full, but it was a wonderful discourse. Lionel Barber, the editor from the Financial Times of London, was doing the honours and basically, what it all boiled down to was that Ukraine has been invade by Russia. A deal was struck four months ago, which everybody signed, including the dissidents (the people that the Ukrainian President calls 'the terrorists'). While Ukraine has been living up to its side of the ceasefire, the whole idea of the ceasefire was that under the Accord, the Russian/terrorist groupings would stay on the one side of a demarcated zone and the Ukrainian forces on the other side. Subsequent to that, the Russian troops have actually moved 500m² of ground, which they've taken away.

What is really interesting in the development in all of this, and not just the sanctions that are going on, but the real concern that it could escalate into a war that brings various other nations into the equation. President Poroshenko was wearing a little badge, which you might have seen in Paris – the 'je suis, Charlie – after the Charlie Hebdo issue that happened earlier this month. Well, they now have a similar thing of a bus that had 28 passengers in it – all civilians – that was hit by a missile sent from the Russian side of recently occupied territory. This, says President Poroshenko, has become a rallying signal. It really was interesting to sit there and watch history being made. Where does South Africa stand on all of this? Well, a little later in the day, we got to talk again with IMC – a much smaller group this time – with the Prime Minister of Italy, Matteo Renzi and the Prime Minister of Finland who followed him up, Alexander Stubb.

Both of these Prime Ministers are barely 40 years old and it's a reflection on the economic problems, which they're having in both of those countries. Italy, for the last 20 years, has had zero growth. Think of that. Twenty years, and the debt has escalated threefold. According to Matteo Renzi, the reason for this and the reason why Italy is on its knees is because (primarily) of labour market inflexibility. He was voted into power on the basis that he can change that. He's only been in power for a year. He says they already have some serious improvements promulgated to make the labour market more flexible and in his opinion, this is what is going to pull Italy out of its long-term decline. Lessons in there for South Africa, which has an even more inflexible labour legislation than does the Italians.

What really, was of interest was when Alexander Stubb, the youthful Prime Minister of Finland, started addressing the Ukrainian situation. His view is that Europe has isolated Putin and Putin is very much the villain of the piece, according to pretty much anyone that you listen to here in Davos. I asked a question about the BRICS, though. If Putin is so isolated, why then are the BRICS countries (Brazil, India, China, and South Africa) still welcoming him with open arms? Indeed, at the last G20 meeting, there are pictures of President Jacob Zuma of South Africa and Vladimir Putin, this man who's so unpopular with everybody else, smiling, having a joke and talking together. Stubb had some interesting things to say. Unfortunately, these conversations are off-the-record (Chatham House Rules, as they say).

The one piece of information that I can pass along is that he does not believe that if the worst were to occur – and remember, Finland is a country that has a 1400km border with Russia, so they're right there and they've fought many wars through history, with Russia. He does not believe that the other BRICS countries would be drawn into any kind of a conflict. I can tell you that it was with a sense of some relief that I heard those kinds of insights. This has been a fascinating geopolitically focused day, where many of the issues that the world is facing have been raised and put front and centre. South Africa in Briefing: unfortunately, I missed that because of the engagement that I had with the IMC but there wasn't a whole lot that I missed. Apparently, it's a jovial group (as we always are) – us South Africans – until President Jacob Zuma read a prepared speech.

The feeling, generally, from those who were there was that he spent too much time talking about the past and not enough time telling the rest of the world or those foreign investors who did attend, about the future, and how the future will be brighter in South Africa. I guess we're still struggling to find what the growth drivers will be. After that, I managed to get hold of Dennis Nally, who's the Chief Executive of PricewaterhouseCoopers. Last night (in other words, on Tuesday night), on the opening of Davos itself, Pricewaterhouse Coopers traditionally releases its Annual Survey of Chief Executives to find out how Chief Executives are feeling (confident or not) about the coming year. It's an accurate indicator and it is very well covered in the international media. To get Dennis a day later, to relax and to chat a little bit about the findings was really, I felt, more advantageous than joining the scrum and it proved that way.

There were a few things that came out of there that were particularly interesting, not least that Chief Executives around the world are more pessimistic now than they were last year, which is surprising. One area of brightness though, is the United States of America, where corporates are getting quite excited about the prospects, but they haven't yet started dipping into that $2trn of cash that is on the balance sheets. When the do that (or, should they do that), watch out. Prepare to meet your boom. It isn't quite there, yet – a very volatile world that we're in. Last night (or the ending of Day 2 in Davos) came with a dinner of Brand South Africa. Before the dinner, CNBC had set up a camera. In fact, I did my first crossings today from the outdoor studio (that was into Power Lunch). They set up a camera where I had a chat with Ben Magara, an impressive, very jovial and relaxed Chief Executive of Lonmin.

Things are going a lot better at Lonmin he says, but they've learned many lessons from Marikana and the aftermath. Most importantly, what the WEF is saying is that it is good business sense now to have stakeholder relations rather than just shareholder relations. It's something they've taken to heart and they're working really hard on making sure that everybody is participating in the same way. I suggested to him that it might be a good idea to bring AMCU's Joseph Mathunjwa to Davos and he thought that was a fabulous idea. Anyway, he and Mathunjwa have a good relationship and one that clearly, is developing along lines of mutual respect and frankness. The Brand South Africa dinner that followed… Well, the food was really good. The conversation was facilitated pretty well by Bronwyn Nielsen and Sigi Magadebele but I just felt again, that we seemed to be passing each other.

Some of the issues that are really important for South Africa to lift itself up out of the one-point-four percent growth rate, which is not nearly enough for a country with the potential that South Africa has, just aren't being raised just yet. It still seems as though we have this affliction of wanting to talk ourselves up rather do ourselves up. The microphone was passed to me at one point in the evening and I was asked for my thoughts about what was positive about South Africa. It was a good way to reflect that indeed, this democracy of ours is only 20 years old. It had the greatest blessing of all – to have an icon and a humble man, in the name of Nelson Mandela to lead us into those early days of democracy. Yet, with him not too long gone, we seem to have forgotten those lessons of 'working together, public/private partnership, reconciliation, and pulling in the same direction'.

I still believe in my heart that South Africans, when they pull together, have no one on earth that can beat them. The concern is that at the moment, much of the debate remains emotive rather than rational, but there are a lot of good people doing a lot of good things. I had the privilege of sitting opposite Finance Minister Nhlanhla Nene. The acoustics were such that we didn't really get to talk too much, but what I did like from his talk, was he said 'there had been reassessments on some of the Bills that were sent to Parliament, particularly the Bill on Oil & Gas', which went through

Parliament after being adjusted in a very unfriendly business manner.   That's gone back to Parliament and he said other Bills are being assessed as well, in the same respect. There is an olive branch at least – something of an olive branch, which is being passed by Government in rebuilding relationships with business, and I like to look at that as a glass that certainly, is becoming half-full.

This is Alec Hogg from the World Economic Forum in Davos.