Business as usual off the agenda for elite in Davos

THE LARGEST global gathering of senior business, political and economic figures kicks off on in Davos on Wednesday as the World Economic Forum (WEF) holds its 40th annual meeting in the Swiss alpine resort, writes SIMON CARSWELL

More than 2,500 participants from over 90 countries will be involved in the five-day confab which has down the years developed more of a reputation for networking than pursuing the forum’s lofty goal of being “committed to improving the state of the world”.

The 71-year-old German economist Klaus Schwab, a business professor at the University of Geneva, founded the Davos meeting and, as executive chairman of the forum, is still the driving force behind the event 39 years after he first invited leading European business figures and industrialists to the village.

Peter Sutherland, the former Irish attorney general and EU commissioner and current chairman of Goldman Sachs, describes Schwab as “an amazing man”, who will be “carried out in a coffin because there is no way he is going to retire”.

While Davos, where the masters of the financial and political universe rub shoulders, has drawn criticism for being too exclusive, the event still has many admirers, despite the fact some of the contributors over the years brought the global economy to its knees.

“It is not doing badly,” says Sutherland. “It is undoubtedly elitist but to be fair to Klaus Schwab he creates a broad church.”

Sutherland points out that Archbishop Diarmuid Martin of Dublin will be attending the event again this year. He will speak on themes as diverse as “rethinking the global response to Alzheimer’s disease” and “how we can learn to make decisions based on fundamental values such as love, trust, compassion and charity”.

Sutherland, Martin and Niall FitzGerald, the deputy chairman of media giant Thomson Reuters, are among the few Irish participants at Davos this year.

Taoiseach Brian Cowen attended a meeting of multinational chief executives hosted by the IDA last year, but the development authority is holding no such event in Davos this year and no Irish Government figure is scheduled to attend over the five days.

Among the seven co-chairs of this year’s annual meeting are two bankers: Josef Ackermann, the long-serving chairman of Deutsche Bank; and Peter Sands, chief executive of UK bank Standard Chartered. They will share a platform with the likes of Melinda Gates, wife of Microsoft billionaire Bill Gates, who will also attend.

More than 30 heads of state or government and over 12 central bank chiefs will attend the event in addition to 1,400 top executives from the world’s biggest firms.

The event is less glitzy this year with fewer celebrities attending, though film director James Cameron is scheduled to discuss his latest movie, Avatar, as issues such as the environment and sustainability are raised in the film.

The theme of the discussions at this year’s meeting is: Improve the State of the World: Rethink, Redesign, Rebuild, though given that parts of the world are still in crisis mode, this could prove challenging for the participants.

Responding by e-mail to questions from The Irish Times, Prof Schwab says while the global economy may be out of “the imminent crisis mode, we are certainly not out of the danger zone” and that “there is no ‘business as usual’ to return to”.

“The main challenge for our participants at our annual meeting is to develop long-term and comprehensive solutions.

“There is certainly the risk that we will have a social crisis that follows in the wake of the financial and economic crisis if we don’t fundamentally rethink our values, redesign our systems and rebuild our institutions.”

One debate this week that is likely to raise such issues takes place on Thursday when Greek prime minister George Papandreou will discuss the topic of “rebuilding the euro zone” with European Central Bank president Jean-Claude Trichet and the heads of five other European countries.

The Greek debt crisis and US president Barack Obama’s proposed reforms for Wall Street are likely to be two of the hotter topics at Davos.

US bankers are rarely spotted at the Swiss think-in following the global financial crisis. John Mack, chairman of US investment bank Morgan Stanley, is one of the few Wall Street bankers attending.

Schwab believes that Davos has lost no credibility as a result of the global financial crisis, even though the subprime issue barely featured as an issue during the many discussions at Davos in January 2007.

He argues that the forum had issued warnings about “fundamental imbalances” in the global economic system and he believes that the organisation “remains as relevant as in previous years – probably even more so today”.

“The crisis has shown that in today’s world, our problems become globalised. But it has also demonstrated the need for co-operation and collaboration on a global level,” he says.

Schwab believes that as long as there is a need for a platform where decision-makers meet to discuss ways of addressing global challenges, “the relevance of Davos will remain . . . problems have become more complex, more interlinked and more global”.

He says that the WEF annual meetings are as significant for the ideas they generate as the events that take place every January in the Swiss village.

“Davos is as much about ideas as it is about events,” he says.

“Often a good idea starts in Davos. The result of this idea then takes time to grow and bear fruit, so it is difficult to draw a direct connection sometimes. Maybe the most significant achievement is more abstract, like creating awareness within the business world regarding environmental and sustainable responsibilities.”

Among “the most significant political achievements” at Davos over the past 39 meetings, Schwab cites the signing of a declaration between Greece and Turkey in 1988 which turned the countries back from the brink of war and the first ministerial meetings held between North and South Korea in 1989.

He also recalls the meeting between South African president FW de Klerk and Nelson Mandela, their first joint appearance outside their home country, as “a milestone in the country’s transition”.

Davos will “continue to play a vital role as a time and place to reflect on the state of the world and to find solutions to the challenges of our times through dialogue and co-operation”, he says.

“This is the spirit of Davos and I think the world is certainly in need of that today.”

Peter Sutherland says that the relevance of Davos is proven by its popularity. “Everybody who’s anybody wants to be there,” he said.