Where the rich lecture the poor

Davos is where global economic trends are supposed to be spotted, dissected and may be even set ... amid the widening divide between the world's rich and poor. BATUK GATHANI on the World Economic Forum's 30th summit.

THE SIX-DAY summit of the World Economic Forum at the ski resort of Davos in Switzerland is often described as an exclusive corporate retreat. Corporate executives with their spouses listen to miracles of current and future technology and discuss assorted topics related to creating and preserving wealth. Davos is where global economic trends are supposed to be spotted, dissected and may be even set, as delegates muse about the decline of the euro and the consequences of rising oil prices, amid the widening divide between the world's rich and poor.

Apart from top company executives, Davos also attracts a few heads of Government, scores of Government Ministers and above all some 600 journalists armed with the latest communication gadgetry, enough to cover a third world war, as The Financial Times put it. As The Economist succinctly wrote, the bosses of the thousand largest companies, account for four-fifths of world's industrial output. These are the world's rich and powerful who each pay an entry fee of some $20,000. This is where one rubs shoulders with the high and mighty of the world, who range from the U.S. President, Mr. Bill Clinton, to Mr. Bill Gates to Mr. George Soros to Mr. Yasser Arafat.

The Davos gathering is not about tangibles but ideas and perceptions. This year, a survey of 1020 chief executives revealed that the Internet will widen the wealth gap between industrialised and developed nations. Some executives even warned that this could create social unrest. It was argued that as a new technology, the Internet can create a ``knowledge gap'' between those with skills and access to technology to make use of the world wide web and those without.

According to a prominent academic at Davos, politicians will have to become as net-savvy as businessmen if they are to keep in touch with the changing nature of the constituencies. It was stated that world leaders have been slower than businesses to adopt the Internet, but they are discovering the benefits of transmitting their message directly to the voters.

On the stock market front, the respected gurus, Ms. Abbey J. Cohen and Mr. Kenneth Courtis of Goldman Sachs, predicted a sustained economic growth with stock prices rising. Ms. Cohen predicted that profits of U.S. companies would grow eight to ten per cent in 2000. She concluded that the inflationary impact of the recent rise in oil prices would be minimal.

Last year at Davos some 2500 delegates spent six days debating the merits of ``responsible globality'' and the latest phrase to enter the Davos discussions is ``globophobia'' which was coined by Mexico's President, Mr. Ernesto Zedillo, who referred to the backlash against globalisation that was unleashed at Seattle and last week was seen spilling over in the streets of Davos. An American observer wrote: ``every year at the World Economic Forum there is star or theme that stands out. The star of Davos 2000 without question was Seattle and Seattle was talked about everywhere.''

Observers point out that Davos has a mixed record. For example, the meetings failed to foresee Russia's economic crash or the depth of the Asian financial crisis two years ago. The WEF has made dialogue between adversaries such as the Arabs and the Israelis possible but nothing tangible has materialised. Davos at best provides international legitimacy for economic and fiscal reforms and creates a cozy atmosphere for delegates from semi- developed countries such as India, Brazil and South Africa to argue their case before the world's richest and most powerful if they have the time and the inclination to listen.

The saga of the WEF began three decades ago in 1970, when Mr. Klaus Schwab, Professor of Business Administration, took the initiative to convene the first informal meeting of Europe's prominent chief executives. The January 1971 meeting discussed a coherent strategy for European business to face challenges in the international marketplace. Since then, the WEF has not looked back. The WEF has launched individual country forums to coordinate a dialogue between international business leaders and heads of selected countries. By 1995, more than 500 such meetings took place in some 30 capitals. The fast-emerging sector is the WEF's Regional Membership which allows the integration of companies with a special interest in particular region, such as Asia and South Africa. According to WEF sources, more than half of the current member-companies are headquartered outside Europe.

The WEF is headquartered in Geneva. Its initial activities were merely confined to management issues but in recent years the WEF has integrated its activities to monitor and debate political, social and economic issues.

The WEF's history is a saga of entrepreneurship with global perspectives and for the participants in its annual gatherings, it is a case of how much they can absorb and impart, essentially to enlarge global cooperation to create wealth.

But many Davos devotees are also wondering if the annual summit is losing its purpose at the age of 30. The Wall Street Journal the other day wrote that the Forum is seen as a confusing web of its founder's overlapping personal and professional interests. Many wonder about the future of the Forum as some prominent world figures are choosing to stay away. Also for the first time Davos 2000 attracted protestors who burnt an American flag and did some property damage as Mr. Clinton praised free trade, and the virtues of globalisation.

He warned that any retreat would usher in the beggar-my-neighbour policies of the 1920s and 1930s which led to the Second World War.

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