Conference highlights rise of the East over the West

Analysis: More than 2,000 political and business leaders have left Davos after an Annual Meeting of the World Economic Forum that highlighted the revolution that the rise of China and India is effecting in the global economy, writes Denis Staunton in Davos

"The dominance of the US and the dominance of Europe - particularly Western Europe - is eclipsed. What we're witnessing is a sharp shift in wealth in a relatively short period of time from West to East," declared Sir Martin Sorrell, chief executive of communications services group WPP.

The change was reflected in the lavish closing gala, where entertainment was provided by a Bollywood dance troupe at one end of the venue and by jazz musicians from New Orleans at the other. The Indian show exuded confidence and dynamism while the New Orleans performers, who included jazz legend Irma Thomas, were pleading for help in saving their flooded city.

Few leading figures from the US administration came to Davos and the biggest American political star was former president Bill Clinton, who was greeted with a standing ovation. Sessions on US issues were few and sparsely attended, often because they were scheduled at off-peak times.

Insofar as the US was discussed, it was overwhelmingly in terms of the risks posed by a sudden downturn in the housing market and America's ballooning current account and budget deficits.

China has launched a five-year plan to boost domestic consumption, which would reduce the country's extraordinarily high savings rate - more than 40 per cent of GDP. There was no sign in Davos of any initiative to boost the US savings rate and many participants were in any case more worried about the consequences of a sudden end to America's consumer spending binge.

The biggest concern participants shared at Davos was the increasing environmental costs of development. They heard recommendations that resources, especially water, should be managed more effectively.

Political issues took a back seat this year as the meeting focused more strongly than before on business and economic matters. But Mukesh Ambani, chairman of Reliance Industries, India, said that sustaining more equitable and less polluting growth in the developing world is also imperative to discourage further conflict and social unrest among populations whose aspirations are unfulfilled.

"In the world, people are really fighting two battles. The developed world is fighting a battle for peace and then there's our part of the world, which is fighting a battle against poverty," he said.