Economy has turned positive, says Premji

DAVOS, SWITZERLAND: This year the outlook for global economy has turned positive and the worst is over even though the road ahead is full of challenges, said Wipro chairman and a co-chair of the World Economic Forum, Azim Premji.

“Last 12-18 months have been very difficult for the global economy. However, I think the worst is over, 2010 looks positive,” a PTI report quoted Premji as saying in his message to the global business and government leaders for the annual WEF meeting here.

“We have an absolutely unique opportunity today, but it comes with its set of challenges. The first big challenge comprises ecological sustainability and tackling climate change. The second is that of reducing poverty and inequality in the world. To me, if you combine these two challenges, they present an opportunity,” Premji told the forum.

“The key is to look at the very fundamental fact that the developing world has still to build most of its energy infrastructure physical infrastructure, and to buy most of its consumer goods. This very simple fact – that the developing world does not have these things – is the great opportunity for tackling climate change and ecological sustainability,” he added.

Meanwhile, global business leaders at the forum warned Western governments that a populist crackdown on the financial industry could crimp a fragile recovery from the worst recession since the 1930s. The worried response was a reaction to U.S. President Barack Obama's plans to tax and curb big banks.

Nearly 2,500 business leaders and policymakers are meeting in the Swiss ski resort of Davos.

Obama jolted markets on January 21 with proposals to force commercial banks to cut ties with hedge funds and private equity funds and stop proprietary trading, and to make the financial sector pay for a massive taxpayer bailout.

“It would be unfortunate if regulatory reforms that will be forthcoming were based on a populist message,” a Reuters report quoted Dennis Nally, global chairman of accountants PricewaterhouseCoopers (PwC), as saying.

Confidence rebounds

A PwC study showed business confidence bouncing back after the sharpest drop in economic activity since World War Two, prompting more industry leaders to start hiring again.

The survey of 1,200 chief executives in 52 countries found 39 percent of industry bosses aimed to hire extra staff in 2010, while 25 percent planned more job cuts, down from nearly half who slashed jobs last year.

But recruitment will be on a modest scale and mostly in booming emerging economies such as China and India, rather than in the developed world, the report showed.

(With inputs from Reuters)