Turkish Minister Says China Gaining Unfair Advantage

It doesn’t matter whether or not China and the U.S. are actively trying to keep their currencies low, the end result is pain for emerging markets, Turkish Finance Minister Mehmet Simsek said Saturday.

In an interview with Dow Jones Newswires on the sidelines of the World Economic Forum, Mr. Simsek said he thinks China is deliberately depressing its exchange rate, and that that is giving it an “unfair advantage” against countries like Turkey “that compete in the same products for the same markets.”

“Why else would a country accumulate almost $3 trillion of foreign reserves?” he asks. “It’s quite obvious.”

He was less damning about the U.S. Federal Reserve’s policy of “quantitative easing,” saying he didn’t think the U.S. was trying to manipulate its currency, but said the consequences were also highly negative for Turkey, by helping to inflate the price of commodities such as oil that Turkey needs to import, and by stimulating inflows of hot money in search of higher returns than those on the dollar.

Tunisia’s Viral Revolution

Social media, which played a crucial part in Tunisia’s regime change, will be embraced by the country’s new government, Yassine Brahim, the minister of infrastructure and transport — as of two days ago — told a meeting in Davos.

“Young people were filming movies and spreading them on Facebook and Twitter” during the uprising, he said.

The new government is “aiming to leverage this medium,” he said. “Democracy is becoming horizontal. We don’t have a charismatic, populist leader.”

He noted that during the government’s first meeting, another new minister, who was in jail until three weeks ago for his opposition to the old regime, “put it on Twitter.”

Yuan’s Value Is Hot Topic at Davos

The Chinese currency is such a hot topic at Davos this year a breakfast meeting didn’t even go without it.

At a function hosted by a Chinese financial magazine Saturday morning, with China’s 12th five-year plan as the theme, Chinese executives, academics and their Western counterparts spent a big chunk of their time talking about nothing else but the controversial renminbi, or “People’s Money” as literally translated.

Surprisingly, this time, it was Joseph Stiglitz, the American Nobel laureate, who showed some degree of sympathy toward Beijing while his Chinese counterparts were arguing for a stronger yuan. Mr. Stiglitz said the U.S. has clearly won the political debate of accusing the Chinese of undervaluing the yuan but the rhetoric betrayed the mentality of a weakening superpower.

“Our kids are taught at school that we are the world’s No. 1 and we can do anything better than others. But when one day you realize that someone is doing just as well as you are and perhaps even slightly better than you, you tend to think the other person must be doing something unfair,” he said.

Frank: Clinton Is ‘Cool Kid’ at Davos

Barney Frank, the witty Democratic congressman from Massachusetts,  held forth on a number of topics during an impromptu question-and-answer session with reporters Saturday morning at Davos.

Among the more random questions put to the long-serving congressman: Can Bill Clinton — whose Thursday evening talk was one of the conference’s best-attended events — be considered the “Mayor of Davos”? “No,” Mr. Frank replied. “I don’t know what that means.”

Instead: “He is the most popular kid in Davos High School.”

“He may even go beyond Bono … He’s got that rock star plus the politico thing.”

Huffington Post Haste

Uber-blogger Arianna Huffington is a star at these gatherings and is always in great demand for her views on how to improve the state of the world.  On Saturday, she was in such demand that she had to cut short her contribution to a panel discussion on U.S. politics. The reason: She had to catch her helicopter to Zurich.

The creator of the Huffington Post website left her fellow panellists, Rep. Mario Diaz-Balart (R., Fla.) , Rep. Carolyn Maloney (D., N.Y.) and Harvard’s Kennedy School commentator David Gergen in midstream with a cheery wave. Given Huffington’s embrace of all things green (HuffPo has hosted a “No Impact” week in the past to raise awareness of the planet’s carbon excesses), we assume she bought the carbon credits to cover the damage her short flight caused.

Ukraine’s Greater Isolation From Europe, Russia Felt at Davos

Ukraine feels “discrimination” from both Russia and the EU as Europe’s richer countries seek gas routes avoiding it and Poland, President Viktor Yanukovych said.

Sentiment isn’t much warmer in the U.S. and Europe, where some see recent prosecutions of Kiev officials as a politically motivated witch hunt. After he was elected president, Mr. Yanukovych changed the rules so that he could oust the prime minister, archrival Yulia Tymoshenko, and prosecutors have since charged her and other former officials with crimes. Ms. Tymoshenko denies wrongdoing.

Friday at an interview at his villa bristling with security more than 4 kilometers from the Davos conference hub, Mr. Yanukovych sat before a prepared Russian script and responded carefully to political questions, occasionally interrupted by aides.

Relations with Russia, once the champion of his Party of the Regions, have become more “pragmatic” and focused on the countries’ bilateral trade, as well as “neighborly” relations,” he said. But on the question of South Stream, a gas pipeline that would link Russia to Italy and Austria via the Black Sea, Mr. Yanukovych didn’t mince words.

DHL Finance Chief Sees Upturn in Yield

Lawrence Rosen, the chief financial officer of Germany’s DHL, said Friday that the company is seeing an upturn in yield, which is a broad measure of revenue per package delivered.

The major global delivery companies recently instituted price increases of 5% to 6%, and with an economic rise he’s “optimistic that a good part of that will stick.” DHL operating profit margins rose to over 4% in 2010 from less than 4% in 2009, and with increased volume and moderate price increase, “we’ll have a reasonable margin trend” this year, he said, without specifying.

DHL is middle of the pack on margins, he noted, but the global package company is targeting a margin that is equal to or greater than the industry by 2015.

Read more at Barrons.com, where Vito Racanelli is blogging from Davos.

Novartis Interested in Emerging Market Bolt-On Acquisitions

Novartis Chief Executive Joe Jimenez said Saturday that thanks to about $1 billion per month in cash flow, the giant drug firm will be able to pay down debt and maintain a double-A rating, while simultaneously continuing to make “bolt-on” acquisitions and begin stock buybacks authorized by a recent $10 billion share repurchase plan.

Currently, Novartis has a $15 billion net debt position. So far some $300 million of the buyback authorization has been spent.

Speaking at the sidelines of the World Economic Forum in Davos, Mr. Jimenez also said that in terms of geography its acquisition efforts are focused on emerging markets China, Russia, India, Brazil and Turkey, as well as South Korea. It’s looking for acquisitions there across all of its businesses, drugs, generics, vaccines, eye care, and consumer over-the-counter  products.

The latter is also of acquisition interest in the U.S., added Mr. Jimenez, who defined bolt-on acquisitions as deals of up to roughly $1 billion.

Read more at Barrons.com, where Vito Racanelli is blogging from Davos.

Gates Foundation Targets ‘Unbanked’

There’s been a lot of focus at Davos, as usual, about the concerns of the world’s top bankers. But there hasn’t been much attention paid to the more than a billion people who have no access to banks — and therefore to savings.

One exception is Jeff Raikes, CEO of the Bill & Melinda Gates Foundation, the world’s largest philanthropic organization.

It’s directing $500 million over the next few years to the people he calls the “unbanked.” If you can’t find a reliable bank, it’s very hard to save and build up reserves to deal with personal or family crises such as a serious illness. It’s also risky to use traditional savings methods. In parts of India, a man’s savings may be the gold bangles on his wife’s wrists; in parts of Africa, his cattle.

The aim, he said in an interview, was to “transform the underlying economics of banking” using mobile phone technology.

Christine Lagarde vs. Bob Diamond

Some Alpine chilliness seeped into a World Economic Forum panel Saturday morning as French Finance Minister Christine Lagarde and Barclays PLC boss Bob Diamond tussled over the status of Europe’s financial crisis.

Mr. Diamond said he thinks the crisis has eased but could continue to fester. “It will be more chronic as opposed to acute,” he said, citing the likelihood of ongoing euro-zone market volatility “from time to time.”

Other bank CEOs have privately made similar comments this week in Davos and are pushing for a more muscular European effort to tackle the euro zone’s debt troubles. Some executives pressed that point in a meeting with finance ministers and central bankers that took place shortly before Ms. Lagarde, Mr. Diamond and six others took to the stage for the panel discussion.