In Age of Discontent, Is Davos Still Relevant?
More than 40 years since the World Economic Forum (WEF) began as the rather less-impressive sounding European Management Forum, political leaders, chief executives of the world’s biggest banks, royalty, actors and pop stars will converge on the small Swiss ski resort of Davos next week.
In a Europe where high-level summits are now an almost weekly occurrence, the meetings of presidents, prime ministers and profit makers from over 100 countries at Davos may seem less exciting than before.
“Davos continues to have relevance. It’s an independent forum, it brings together a whole host of people and their ideas, and increases awareness of the challenges and opportunities the world has to offer,” B.G. Srinivas, head of Europe at Infosys, who is going to his sixth WEF conference in Davos this week, told CNBC.com.
No-one could accuse the organizers of failing to discuss big questions. WEF is tackling this by making sure big issues are at the top of the agenda. The theme of the conference—The Great Transformation: Shaping New Models—encompasses debates about the very future of capitalism, youth unemployment and cyber security, among many other topics. Cynics may suggest that these problems will probably remain unsolved after the conference.
“It’s about what happens afterwards. All the ideas which come out find their ways into government policymakers and businesses, and shape decisions for businesses,” said Srinivas.
He added that previous Davos conferences had helped him find out more about emerging technologies and employment creation.
German Chancellor Angela Merkel, one of the most important decision makers in the euro zone debt crisisthat has swayed global markets in the year since the last Davos meeting, will open the summit on Wednesday.
No matter how many decision makers convene, their plans can be superseded by events. Last year’s summit famously had to convene extra meetings when the protests in Cairo’s Tahrir Square sparked a seismic shift, thousands of miles from the supposed center of global political power.
This year, the Occupy movement is setting up camp as close to the conference center as they will be allowed by the security surrounding it—a reminder to all the attendees that their privileged world can come under attack. Unlike their tent-dwelling counterparts in Wall Street, London and elsewhere, the Occupy WEF protestors have built igloos to stay in during the conference.
“This is a meeting of all the so-called global leaders who caused the crisis, and now they’re trying to tell us they can be the solution,” David Roth, president of the youth wing of the Swiss Social Democrats and one of the people planning to picket the meeting, told CNBC.com. “It’s wrong that they think they alone can decide.”
The world of finance is a huge part of Davos, and attendees include chief executives and chairman from most of the major investment banks. It’s a far cry from the origins of WEF, which was set up in 1971 with just 25,000 Swiss francs – this would probably just about cover some of the nearly 2,600 delegates’ hotel bills nowadays.
Some businesspeople —includingPimco chief executive Mohamed El-Erian—argue that Davos doesn’t have any real impact.
The World Economic Forum argues that Davos acts as a conduit, a place where “incipient changes in the world are first discerned and where ideas for changes that have shaken the world have been conceived or refined.”
The concept of “congenial exchange” central to Davos is also an extension of the Swiss tradition of neutrality—although exchanges may not always be entirely friendly.
There are also plenty of concessions to the growing power of social media—demonstrated last year by the use of Twitter and Facebook in the Arab Spring protests—in an effort to make the high-level summit more accessible.
An officialDavos YouTube channel will allow members of the public to submit questions for the high-profile delegates. They will then be voted on, with the most popular answered via a special video booth at the event.
Accessible is not the word which springs to mind first when thinking about Davos, which famously has a complicated colored badge system to enable the organizers to separate the wheat from the chaff for the different sessions. Journalists attending have been known to grumble that this excludes them from some of the most interesting events.
The most high-level discussions aren’t even listed on the program—you have to be invited to know about them. The Informal Gathering of World Economic Leaders (IGWELs) are small gatherings of some of the high-level policymakers in town for the rest of the meeting. They’re so secretive, you’ll never hear whether anything has actually been decided until much, much later.
The idea for the North American Free Trade Agreement (NAFTA) between Mexico, the US and Canada first came about at an IGWEL, according to Mexican President Carlos Salinas de Gortari, as well as the concept of the UN Conference on Environment and Development, known as “The Earth Summit,” which was held in Rio de Janeiro in 1992.