Like it or loathe it, to dismiss Davos is to miss the point

Analysis:Davos delegates departed the World Economic Forum (WEF) yesterday and re-entered reality.

Taoiseach Enda Kenny made a robust case for Ireland’s recovery and expectation of a debt deal. German chancellor Angela Merkel said the euro patient, though stable, would have to make greater strides in 2013 for competitiveness. If that happened, British prime minister David Cameron said he was happy to stay in and not get out.

It is 43 years since the WEF set up shop in the Swiss resort of Davos, ironically dubbed the “Magic Mountain” by Thomas Mann. Ask Davos veterans what makes the mountain magic and they point to WEF founder Klaus Schwab.

Each year he lures the movers and shakers from business and politics to this snowy mountaintop with a simple, clever premise: tapping high-achievers’ deep-seated need for recognition.

Once inside, and before the evening parties begin, Schwab asks participants to attend events and to think and talk about old things in new ways, with people they might not otherwise meet.

Of course, no good idea goes uncorrupted and what started as a discreet think-in has become a global brand, with offshoot meetings on every continent.

But to dismiss Davos is to miss the point: like it or loathe it, this is where the world’s leaders meet to take the world’s collective temperature and grade each other’s report cards.

Breakthroughs

After years gaining momentum, several issues finally made a breakthrough. The idea of sustainable and inclusive economic growth received the imprimatur of a top Davos delegate: IMF managing director Christine Lagarde.

She sounded a warning, too, on climate change. Without agreement of business and governments on new targets by 2015, she said, “future generations will be roasted, toasted, fried and grilled”.

Some delegates were pessimistic about the future, worrying that political leaders had missed the chance to take charge of the globalisation train.

Despite such warnings, the mood in Davos was lighter than last year when, with the euro on the brink, bankers berated EU leaders for not acting more decisively. This year EU leaders turned the tables, presented their reform progress report and berated bankers for their reform backlog.

Regulation

“Shortly after the crisis in 2009 we all agreed that every banking centre, actor and product should be regulated,” said Merkel, “but we are still far away from that.”

Lagarde agreed that “the job has to be finished”.

Cameron told companies the time had come for them to come clean on tax avoidance that was “corrosive to public trust”.

For Irish WEF veteran Mary Robinson, Davos is unmissable – even if she is not always comfortable among the self-declared masters of the universe. “Some of the great heroes of Davos were responsible for the financial crisis and I don’t think that has ever been accounted for,” she said.

Does she ever raise that with them? “It depends if I can get part of my discussion and agenda done,” she said.

“The Davos language of euphemism is irritating, and the jury is out on whether we can make progress.

“But we have a complex global architecture and sometimes you need the right people in the room. Sometimes Davos can provide that.”