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Leaders to meet in Davos to "rebuild" the world

WEF executives say there is a danger of moving from the current economic crisis to a social one in 2010


Rethinking global cooperation and business values will be at the heart of talks at the 40th World Economic Forum (WEF) meeting in Davos next week, say WEF executives.

The annual five-day brainstorming, which opens on January 27 in the eastern Swiss mountain resort, is due to attract 2,500 participants from more than 90 countries. Haiti and global warming will also be top agenda items.

World leaders and business figures will be meeting under the motto “Improve the State of the World: Rethink, Redesign, Rebuild” to take stock in the aftermath of the deepest recession since the Great Depression of the 1930s.

“The world has fundamentally changed,” Klaus Schwab, WEF founder and executive chairman, told a Geneva news conference on Wednesday.

“We sense the danger of moving from a financial crisis in 2008 to an economic crisis in 2009 and to a social one in 2010 and the years to come.”

As a consequence of governments’ fiscal situations public and private households will have been squeezed and unemployment figures will have increased, he added.

“We have to rethink our values – we are living together in a global society with many cultures. We have to redesign our processes – how we deal with the issues and challenges on the global agenda. And finally, we have to rebuild our institutions,” said the WEF executive chairman.

On Monday WEF published the results of a Facebook survey in which two-thirds of the 140,000 respondents said the current economic crisis was also a “crisis of ethics and values”.

“The general public is increasingly distrustful of leaders from any kind of organisation,” Schwab told “Something is fundamentally wrong; we want to confront leaders with this issue.”

Haiti reconstruction

The Davos meeting will be the first big global gathering of leaders since the failed Copenhagen climate talks in December.

“We have to look at the Davos meeting in the context of what’s happening in the world... and we see that, clearly, the present system of global cooperation is not working sufficiently,” said Schwab.

“Global multi-stakeholder cooperation lies at the heart of the forum’s mission to improve the state of the world.”

Cooperation and assistance from business leaders to reconstruct Haiti, which was devastated by a 7.0-magnitude earthquake last week, will also be a major point of discussion in Davos.

Former United States President Bill Clinton, who is the United Nations Special Envoy to Haiti, will launch a major initiative for the island and its people, together with the United Nations Development Programme (UNDP).

“It will be about encouraging the business community to invest in the island, partnerships with Haitian organisations and creating a network to encourage long-term sustainable growth to help the population out of poverty,” said chief business officer Robert Greenhill.

Movers and shakers

In all, 30 heads of state and government will attend, as well as over 60 senior ministers, 1,400 top executives from the world’s leading companies, 100 officials from international organisations, as well as 200 academics and media leaders.

French President Nicolas Sarkozy will open the event alongside Swiss President Doris Leuthard, who also heads the economics ministry.

There will also be sessions with South Korean President Lee Myung-Bak and Canadian Prime Minister Stephen Harper, who respectively chair this year's G20 and G8 summits. And the meeting will also discuss climate change with Mexican President Felipe Calderon, who will chair the follow-up climate summit later this year.

A panel on the global economic outlook will include top White House economic adviser Larry Summers, the managing director of the International Monetary Fund, Dominique Strauss-Kahn, French Economic Minister Christine Lagarde, and the deputy governor of China's central bank, Zhu Min.

Another session will look at the uneven and often sluggish pace of reform of financial regulation, with European Central Bank President Jean-Claude Trichet.

Two other Swiss ministers are expected to attend: Finance Minister Hans-Rudolf Merz and Foreign Minister Micheline Calmy-Rey.

But many US bankers are avoiding Davos for the second successive year in a sign they remain wary of being seen there at a time when they are still being attacked for their role in the financial crisis and over huge bonuses.

Simon Bradley in Geneva,

World Economic Forum

The World Economic Forum started life as the European Management Forum in 1971.

Formed by German-born businessman Professor Klaus Schwab, it was designed to connect European business leaders to their counterparts in the US to find ways of boosting connections and solving problems.

It is a non-profit organisation with headquarters in Geneva and is funded by member subscription fees.

The forum took its current name in 1987 as it broadened its horizons to provide a platform for finding solutions to international disputes.

WEF conducts global and country specific reports and other research for its members. It also hosts a number of annual meetings – the flagship being Davos.

Davos has attracted a number of big names in the world of business, academia, politics and show business. These include: Nelson Mandela, Bono, Bill Gates and Sharon Stone.

As the forum grew in size and status in the 1990s, it attracted rising criticism from anti-globalisation groups, complaining of elitism and self-interest among participants.

The 2010 WEF in Davos will be held from January 27 to 31. A small protest is scheduled in Davos itself on January 28.

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WEF global risk report

In its annual report on global risks, published on January 14, the WEF warned that a fully-fledged sovereign debt crisis, an asset price collapse and a slowdown in Chinese economic growth were among the biggest threats facing the world this year and beyond.

The report said: "Many countries are at risk of overextending unsustainable levels of debt, which in turn will extend strong upwards pressures on real interest rates. In the final instance, unsustainable debt levels could lead to a full-fledged sovereign debt crisis."

A slowdown in China could lead to serious unemployment and social unrest, and badly hit the country’s trading partners, as well as global commodity and capital markets, the WEF warned.

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