World Economic Forum survey finds 30 per cent of business leaders pessimistic about the future
The survey found that of the one-third of businesses that had put investment plans on hold since the Iraq war, 75 per cent had still not restarted investment.
And while 64 per cent of the senior private sector participants surveyed indicated that the geopolitical situation is stable, one-third are pessimistic about the future business outlook. Almost a half rated current consumer confidence as low.
On who is in the strongest position to reduce geopolitical uncertainties, needed to restore business confidence, more than half thought the US should take this role, with the United Nations trailing in second place with 11 per cent of respondents.
Interestingly, of the majority of respondents who indicated that the USA is in the strongest position to reduce geopolitical uncertainties, most were from the Middle East and the USA.
But of those who thought the UN could play a stronger role, nearly all were European.
Respondents who represented companies from all regions and industries indicated that sales levels in all parts of the world fluctuated surprisingly little due to recent events in the Middle East.
Even when asked specifically about Middle East sales, fewer than 10 per cent of those surveyed reported fluctuations of more than 10 per cent. Worldwide sales fluctuations were even smaller.
In addition, recent events in the Middle East have focused company attention on their brand name’s association with their home countries.
A full two-fifths of those questioned indicated that this association has a damaging impact on customer behaviour in countries outside of their home markets and one-third of those companies plan specific actions to disassociate their brand from their company’s nationality.
“Middle East geopolitics has clearly impacted businesses well beyond the recent stock market roller-coaster ride,” said Kevin Steinberg, director of the centre for global industries at the World Economic Forum.
“It has directly and materially impacted on investment. The many hundred business leaders in Jordan this weekend, stemming from almost 50 countries, are a display of the business world’s commitment to bringing peace and prosperity to the region. On a very personal level the businesspeople present feel not only economic, but also a compelling set of moral and humanitarian, reasons to bring the resources at their disposal to bear on the situation,” he added.
The situation in the Middle East focused company attention on the association between their brand and home country. Forty per cent indicated that this association has negatively affected customer behaviour in countries outside their home markets, and one-third of those companies plan specific actions to disassociate their brand from their company’s nationality.
Among other survey findings, 41 per cent of those polled thought that the Trade Round in Cancun next September will fail and less than a quarter thought it has any chance of success.