New global realities split WEF opinion
The dramatic events unfolding in Egypt over the last week neatly summed up the mixed feelings at the 41st edition of the World Economic Forum’s annual Davos meeting.
While some observers hope the civil unrest in Egypt, and before that in Tunisia, will transform autocratic regimes into stable democracies, others fear it could result in chaos spreading into the Middle East.
The response of Russia to the Moscow suicide bombing, that claimed 35 lives, also left some people wondering about new realities. Having sacked airport security staff and threatened to eradicate terrorist groups, Russian President Dimitri Medvedev defiantly flew to Davos to deliver the opening address in a clear signal that his plans would not be disrupted.
At the same time Russia announced plans to build a multi-billion dollar ski resort in the war torn Caucasus region in the new-found hope that tourism would help to defeat terrorism.
Politicians, business leaders and representatives of civil society, the media, religion and science in Davos were also split on whether the new economic order will help or hinder global development.
The mood at the meeting was one of cautious optimism, in contrast to the stark fear of 2009 and the uncertainty of rebuilding last year. Talk was dominated by the two-speed growth in emerging and developing economies that could spark a bout of protectionism.
Patchy growth
Sustained high growth in China, India, Brazil and other countries has helped the global economy emerge from recession, the forum heard. Everyone agreed that investment and innovation would continue to migrate from the West to the East and South.
But the consequences of this vast shift of economic – and inevitably, political – power divided opinion. United States economist Nouriel Roubini described the state of affairs as a “glass half full, yet half empty”.
He neatly defined the uneven patterns of economic progress by pointing out that China’s 10 per cent growth was equal to the US unemployment rate.
French President Nicolas Sarkozy said he would never let the besieged euro currency collapse while German Chancellor Angela Merkel announced new measures to help alleviate debt-ridden European Union members. But there were still plenty of doubts in Davos whether either defence could succeed.
US Treasury Secretary Tim Geithner shrugged off his country’s growing budget deficit that is due to tip $1.5 trillion by the end of the year. His defence of President Barack Obama’s State of the Union plans to keep on investing while maintaining tax cuts also raised some eyebrows.
Spring in step
On the other side of the coin, China and Russia increased their representation at Davos – in China’s case from three in 2001 to 66 this year. Emerging powerhouse economies clearly had a spring in their step and China took the opportunity of launching formal negotiations towards concluding a free trade agreement with Switzerland.
Many of the 2,500 delegates came to debate issues surrounding the environment, health and poverty, gender equality and humanitarian aid.
The overwhelming impression at Davos in 2011 is that these messages have been knocked further down the agenda with discussion dominated by political turmoil in North Africa, the state of the world’s economy, sovereign debt and currencies.
Social issues relegated
So was it worth attending if you were not interested in those heavy issues? Bill Gates thought so as he announced more massive funding towards the eradication of polio.
Bill Clinton thought so as he reminded the world about the continued need to keep rebuilding Haiti. Rock star and former WEF cynic Bono also thought so as he used the stage to plead with cost cutting governments not to slash aid budgets. Thousands of children’s lives have been saved thanks in part to WEF getting the right people together at the right time, he said.
The gathering of so many influential international figures, encompassing a vast spectrum of expertise, also presented an opportunity for lobbying, negotiation and deal making – not all of it to line the pockets of financiers.
The banking community was back in greater force, but attempts to strike a more bullish tone, following the financial crisis, were not well received.
Casting a shadow
But overshadowing all the debates and cocktail parties was the still unresolved situation in Egypt and the fear that Jordan and Syria might next be in line for unrest and enforced change.
Philip Jennings, secretary-general of the international trade union movement UNI Global Union, asked whether events in North Africa may represent a “Berlin Wall moment” for both that region and the adjoining Middle East.
Many delegates were unwilling to put their necks on the line by voicing an open opinion on the subject. Perhaps they were simply confused by the speed of events, but Amnesty International secretary-general, Salil Shetti, believed many were simply hedging their bets.
“A lot of people here have vested commercial interests – irons in the fire – in Egypt and they are waiting to see which way it will go,” Shetti told swissinfo.ch. “But the Arab region has a lot of money, so if unrest spreads people will have to get realistic.”
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 United States to find ways of boosting connections and solving problems.
It is a non-profit organisation with headquarters in Geneva and is funded by the varying subscription fees of its members.
The 2011 Davos meeting takes place from January 26 to 30 and will attract 2,500 delegates from 90 countries.
The local authorities said they were pleased with the organisation of this year’s annual meeting, despite a clash on Saturday between anti-globalisation protestors and police. The police fired rubber bullets to disperse the crowd. No one was seriously hurt during the showdown, which took place hundreds of metres from the main venue.
Six violations of the protected airspace above Davos during the meeting were reported, but defence minister Ueli Maurer said security was assured at all times. Maurer also played down a small explosion in the cellar of a Davos hotel used by business and political leaders. The blast shattered two windows but caused no injuries.
Four thousand Swiss soldiers assisted the security operations in Davos. The military operation cost Swiss taxpayers SFr1.5 million.
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