Davos is a place where leaders can speak their mind

Analysis: Do we need the Davos forum? I think we might

Analysis:Do we need the Davos forum? I think we might. But then, if you'd been sent for three days by your employer to one of the world's sexiest winter resorts to rub shoulders with leading world politicians, royalty and business people, you'd say the same.

So far I'm only here a wet morning and I've met the Taoiseach, the French minister for trade and spent about five minutes standing beside the future king and queen of Belgium trying to pluck up the courage to introduce myself. But besides being good for journalists' egos, does the forum do any good?

The World Economic Forum (WEF) was founded in the late 1960s by Prof Klaus Schwab. Born in Germany of Swiss parents, as a boy he made several trips over and back across the post-war German-Swiss border. The contrast between war-torn Germany and peaceful Switzerland made a deep impression. The war and everything that led to it was caused, fundamentally, by the economic problems of the 1930s.

There was after the war a general feeling that had leaders only had some forum to discuss their separate economic problems, future crises could be spotted and nipped in the bud. While giving expression to that feeling, the General Agreement on Trade and Tariffs, the World Bank and the Bretton Woods agreement had very specific objectives of trade liberalisation, development and management of the world's currencies.

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But there was no forum to discuss broader economic problems and - critically - how they might interact with political ones.

Pre-occupied since its inception with diplomatic fire-fighting, the UN was no place to do it. And even had it not spent most of its existence trying to arrange peace between Israel and Arab states, between the US and the former USSR, the UN's formality and bureaucracy were obstacles to what was really needed: a place where those at the top could get together, speak their mind and get away with it.

A good example of this happened yesterday in the General Congress Hall during a debate on climate change where Bi Jingquan, vice-chairman of China's National Development Reform Commission, had this to say about US energy policy: "The United States contains 4.7 per cent of the world's population and consumes 22 per cent of the world's energy. When China develops its energy consumption model in the future, we will never copy the US mode."

Highlighting consumers' fondness for SUVs in the US, Mr Jingquan went on to say that far from dictating the world's climate agenda, it might look at what the East was doing.

"We must develop the public transportation sector in urban areas. In China we have the largest public transportation system in the world" he said, a hint of triumph on his face.

If uttered in the grim environs of the UN's assembly chamber, the remark could have caused a diplomatic incident. But, with their ties off and the top buttons of their shirts undone, the Americans present took the remark on the chin gracefully; its hard to get nationalistic when you've spent the evening before in a cute Swiss chalet drinking beer in front of the fire.

Adding to the good atmospherics is the fact that no battles are being fought or sides taken: your friends can join your adversaries in criticising you and you'll still talk to them in the bar later.

The day before Mr Jingquan's comments the German leader and current EU president, Angela Merkel, added a woman's gentle coaxing to the debate: "I'm hearing signals from the United States that are more hopeful than those of past years."

The UN and World Trade Organisation and the like may be where agreements are finalised. But agreements are only durable if you create a good deal of understanding and two-way communication before they happen. If Davos forum does anything, it does this.

And Davos brings something else to the party. Most international fora do not recognise the existence of the business community, i.e. the people who most know how to make things happen. Dialogues between politicians only are often constipated affairs; with communication based on precooked formulaic approaches to problems that rule out any real interaction. Point scoring and conflict are often the only possible outcome. But something interesting happens when politicians are freed from the straitjacket of their script.

They revert to being human beings. Californian Congressman Fabian Nunez responded to Zhiang by admitting that the US had an energy problem it needed to deal with. In then came a contribution from James Cameron, founder of Climate Change Invesments, an investment bank that funds clean energy generator development in China. Give us the incentives, said Mr Cameron, and we'll provide the technology.

A French panellist, who was also a business person, agreed and had this to say about the chances of governments solving the problem alone. "Market solutions will prevail. Let's not hide behind the excuse of having to get a global agreement. Global agreements are the best way to get nowhere."

Astoundingly, Mr Jingquan - representing a communist country - announced that the People's Congress had just passed a law to reward private sector energy providers with tax incentives and financial support to develop clean forms of energy. China hopes to increase its proportion of renewable energy to 16 per cent by the year 2020, Mr Zhiang added.

If you like 2020 vision, come to Davos. Any organisation that can get French and British business people agreeing with Chinese communists gets my vote.