Leaders in business, politics and academia from around the world will gather in Davos, Switzerland, this week to try to rescue the planet. It’s a safe bet that, for the 41st year in a row, they will fail.
Even if it were possible to save the world in five days, the list of global problems just keeps getting longer — to the point where Klaus Schwab, founder and executive chairman of the World Economic Forum, is worried.
“I am concerned that governments and international organizations can no longer cope with the capacity and fast pace of this new reality,” Schwab said.
The World Economic Forum’s Global Risks Report, published this month, identified 37 major things to lose sleep over, one more than last year. The list included obvious risks like climate change, geopolitical conflict and government debt, and a few less obvious ones, including migration and new technologies.
However, just last year, for all the talk of crisis prevention, participants at the forum missed what proved to be the big economic story of this year — Europe’s sovereign debt crisis. While Greece’s fiscal problems were already becoming clear, Greek Prime Minister George Papandreou assured one session last January that the government would get its debt under control.
There was no sense that the common currency itself would be in danger.
Indeed, the perennial criticism of Davos is that it is more talk and partying than action. Partly in response, the agenda this year is focused more directly on finding solutions to global threats like scarce credit or chronic disease or, better still, preventing them in the first place.
“We must transition from a firefighting mode to one of risk prevention,” Schwab said by e-mail. “Otherwise the world will be caught in a downward spiral of crisis management.”
The 2,500 people expected to converge on Davos, a onetime mountaintop refuge for tuberculosis patients, can still attend sessions with titles like “Music for Social Change.” They will be able to hear Chesley Sullenberger, the pilot who landed a crippled passenger jet on the Hudson River in 2009, talk about leadership under pressure.
However, the emphasis is on more concrete themes, like the war on corruption or reshaping the US economy.
Measuring the actual effect the gathering has on the fate of the world is always tricky. Organizers and participants portray the event as a place where business executives and government -leaders check their entourages at the door and are exposed to ideas and people they would not encounter elsewhere.
“Davos should not try, and it does not try, to be too specific,” said Nikolaus von Bomhard, chief executive of Munich Re, a German insurance group. “The beauty of Davos is that you try to connect the big points.”
About 1,400 business executives, who often pay hundreds of thousands of dollars to attend, will mingle with university professors, leaders of nonprofit groups, artists and government officials, including 35 heads of state.
Among the top officials will be Russian President Dmitry Medvedev, who will deliver the opening address, and French President Nicolas Sarkozy, who made headlines last year by calling for an end to the US dollar’s role as the world’s primary reserve currency.
German Chancellor Angela Merkel, British Prime Minister David Cameron and South African President Jacob Zuma are also scheduled to attend. So far, the most important US official on the roster is US Treasury Secretary Timothy Geithner.
As usual, much of the action will take place outside the newly renovated Davos Congress Center, the official site.
In hotel rooms and restaurants, the business elite will mingle and make deals; many will barely set foot in the Congress Center. Paul Achleitner, chief financial officer of the German insurer Allianz, who will be attending the World Economic Forum for the 15th time (and makes it a point to attend some panels that do not have business themes), calls it “speed dating for managers.”
Representatives of industries and interest groups will also hold official meetings behind closed doors at the Congress Center under the auspices of the forum. Last year, for example, bankers met with top regulators, central bankers and political leaders to discuss rules to prevent future financial crises.
However, there was little agreement, and the meetings did not appear to have much effect on new regulations that were endorsed later in the year by the US Congress and the G20 nations.
“I think regulators in Davos last year did not think the financial services industry was contrite, but on the contrary was focusing on business as usual,” said Achleitner, who attended the sessions. “Therefore they just continued to do their thing.”
Even if the forum’s achievements fall short of its lofty goals, the event remains popular and prestigious. While undoubtedly elitist, it also allows leaders from developing regions to mingle with the Western establishment.
Representatives of China, India and other emerging nations are an ever bigger presence. This year, three of the six official co-chairmen of the Davos event are from Asia, compared with one last year. Indian companies and business groups seem determined to dominate the after-hours scene, with a seemingly endless series of Bollywood-themed parties and other revelry.
Ruben Vardanian, chief executive of Troika Dialog, an investment bank based in Moscow, said that Davos offered a place where people from emerging markets could meet on equal terms with counterparts from the US and Europe.
“We didn’t go to the same universities, we are not members of the same golf clubs,” Vardanian said, explaining why Davos was still relevant. “For me, being head of the bank and trying to connect Russia to the Western world, it’s one of the best platforms.”
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