09-30-2007, 09:39 AM
BEYOND DAVOS: "DEMISE OF THE HUB-AND-SPOKES WORLD ECONOMY : THE 21ST CENTURY GREAT GLOBAL ECONOMY PARADIGM SHIFT"
Prof Jean-Pierre Lehmann, IMD International, Lausanne
The annual mela in Davos, Switzerland, begins today and is being held under the theme "The Shifting Power Equation." However, as Prof Jean-Pierre Lehmann from IMD Lausanne points out, this in fact is the "Demise of the Hub-and-Spokes World Economy" via "The 21st Century Great Global Economy Paradigm Shift." With multiple sessions on climate chaos which some in the gathered crowd are cynically branding as climate collapse -- this may be one of the "greenest" gatherings of the throng ever . "Better late than never!" as one social entrepreneur put it. Prof Lehmann writes:
Jean-Pierre Lehmann
THE DAVOS WORLD ECONOMIC FORUM
COMPETING IDEOLOGIES: DAVOS v BELEM
Its five-day 2009 meeting attracted over 2500 participants from 91 countries, including over 1170 CEOs and chairpersons from the world's most powerful companies. Others included 219 public figures, 40 heads of state, 64 cabinet ministers, and various other high-level business, government, think tank, media, academic, religious, organizational, and union officials. Noticeably different, according to Bloomberg, "was the virtual absence of Wall Street figures" as well as top Obama administration figures.
Annually, Davos becomes headquarters for the world's power elite to meet and review past achievements, challenges, and prospects for greater exploitation of world markets, resources, and people everywhere. Or put another way, to use money to create more of it, for themselves, of course.
Ordinarily the occasion is celebratory. Capitalism flaunts its successes and parties. This year gloom prevailed, and one topic above others took precedence: assessing the global economic crisis, its risks in the near and longer term, plotting strategies for the coming year and beyond, and avoiding an appearance of panic in an event drawing prominent media coverage.
Not easy with capitalism most in crisis since the Great Depression, no one sure how to right things, and attendees like George Soros believing today's problem "is larger than in the 1930s." Bloomberg headlined the mood: "Grimmest Davos Ever Brings Anger, Finger-Pointing at Bankers," and one observer noted that "the only good news in Davos was the weather."
Bloomberg added that "Almost everyone blamed the few bankers who showed up for the near-collapse of the financial system," with harshest criticism for Wall Street, the Bush administration, and Obama officials for their absence. Economist Kenneth Rogoff called this year the grimmest Davos ever. Abraaj Capital's CEO, Arif Naqvi said "People are looking for the solution, but don't yet have the question formulated." Other attendees predicted that conditions in 2010 may be no better.
The Financial Times' (FT) John Gapper wrote: "This was not the week to be seen in Davos and, if you were there, it was not the time to remain calm." He cited one debate with Black Swan author Nassim Taleb saying bankers should be punished and forced to return their bonuses. He described WEF founder Klaus Schwab as "pale-faced," considering "the impossible task this year - to forge harmony out of tension" and plan how to recover.
For many, Davos this year was "where the pent-up dismay and anger over what Wall Street wrought boiled to the surface" despite efforts to contain it. The stars were those who saw the crisis early and warned about it. Figures like Taleb and Nouriel Roubini who says the worst is still to come.
The FT reported that "The unrelenting economic gloom and the fragility of the banking system have cast a cloud over the global agenda and (managed) to dominate discussions. Drama did as well with Turkey's prime minister Erdogan storming out after an exchange with Israel's Shimon Peres over Gaza, but there was more. Despite its absence, America dominated geopolitical and financial concerns.
The Wall Street Journal reported that "The premiers of Russia and China slammed the US economic system in speeches (January 28), holding it responsible for the global economic crisis."
Implying but not naming America, China's Wen Jiabao said the financial crisis was "attributable to inappropriate macroeconomic policies of some economies and their unsustainable model of development characterized by prolonged low savings and high consumption; excessive expansion of financial institutions in blind pursuit of profit."
Putin, in contrast, was blunt in attacking a "unipolar world," saying it's "dangerous" to rely on the US dollar, and calling for the development of multiple, regional reserve currencies in addition to the dollar. He also mocked US businessmen who boasted last year that America's economy was strong and prospects sound. "Today," said Putin, "investment banks, the pride of Wall Street, have virtually ceased to exist," then added: "The entire economic growth system, where one regional center prints money without respite and consumes material wealth, while another regional center manufactures inexpensive goods....has suffered a major setback."
US officials didn't comment but former Fed vice-chairman, Alan Blinder said: "The sad thing is that we might have scoffed at (these comments) a while ago. But we really dragged the world down" economically. "No wonder (Klaus) Schwab looked so stricken," said FT's Gapper.
Davos is a secluded ski village. Protests are banned but not entirely. Dozens marched through the town and threw snowballs and shoes at Swiss police and the convention center. Among them were members of the Young Socialist and Green parties as well as Amnesty International representatives.
Things were violent in Geneva where Germany's Deutsche Welle reported that "Riot police fired tear gas and water cannons at bottle-throwing demonstrators protesting against the annual World Economic Forum in Davos." AP said hundreds turned out for a largely peaceful demonstration until police "chased black-clad protesters through (Geneva's) narrow streets as shoppers took refuge in bars and cafes."
Regional secretary for the trade union Unia, Alessandro Pelizzari, spoke for many in saying: "100,000 lost their jobs in Europe this week. And those responsible are in Davos." One of the protest organizers, Laurent Tettamenti, added: "The WEF is a symbol of the neoliberal policies of the last 20 years that have caused (today's) crisis. We have no confidence that the same people who caused (this) can solve it."
The World Social Forum's (WSF) Alternative Vision
At a time of global crisis, WSF more than ever was crucial, relevant and vital. Founded by Brazil's Ethos Institute for Business and Social Responsibility chairman Oded Grajew, it held its first meeting concurrently with WEF in late January 2001 and continues doing it annually. Its motto - "Another world is possible." Today, it's essential.
WEF is "an opened space - plural, diverse, non-governmental and non-partisan - that stimulates decentralized debate, reflection, (and) proposals building. (It) experiences exchange and alliances among movements and organizations engaged in concrete actions towards....more solidarity, (and a) democratic and fair world."
WSF's Charter of Principles
After its 2001 inaugural, WSF drafted Principles "to guide the continued pursuit of (its) initiative."
Unlike predatory capitalism on display at Davos:
(1) WSF "is an open meeting place for reflective thinking, democratic debate of ideas, formulation of proposals," free exchanges among participants, and formulations of collective action plans. Participants are civil society individuals, groups and organizations committed to a new society "directed towards fruitful relationships among Mankind and between it and the Earth."
(2) WSF's "Another World Is Possible" theme is a "permanent process of seeking and building alternatives."
(3) WSF is "a world process."
(4) WSF supports global justice, democracy, human rights, equality, the "sovereignty of peoples," and opposes neoliberalism, predatory capitalism, complicit governments, and their destructive harm.
(5) WSF is a civil society meeting ground, not a body representing it.
(8) WSF is decentralized, "plural, diversified, non-confessional, non-governmental and non-party" locally and internationally "to build another world."
(9) WSF is committed to "pluralism (and) diversity." Government officials who accept the Charter Principles are welcome to attend. More on that below.
(11) WSF is a Forum for debate, reflection and exchange of ideas on how to "resist and overcome" the domination of capital.
(12) WSF "encourages understanding and mutual recognition (among) participant organisations and movements, and places special value on (exchanges) among them."
Over 100,000 attendees from 150 countries voiced common themes - Pan-Amazonia for the Forum's site, opposition to predatory capitalism, wars, inequality, injustice, intolerance, environmental destruction, prejudice, and elitism. For six days, hundreds of events took place in workshops, campings, seminars, conferences, speeches, testimonies, marches, cultural and artistic activities, exchanges, reflection, proposals, consensus-building for a better world, and ending with a "Day of Alliances" to decide on joint actions. In all, it was a mass coming together for a better world and an utter rejection of Davos and its ruling ethos.
Latin American Leaders at Belem, Not Davos
On January 29, Venezuela's Hugo Chavez, Brazil's Luiz Inacio Lula da Silva, Bolivia's Evo Morales, Ecuador's Rafael Correa, and Paraguay's Fernando Lugo criticized Washington in Belem.
He also attacked US-dominated institutions like the IMF and World Bank: "Using the art of deception they will try to confuse us into thinking the victims are the guilty ones. They are the ones responsible for the crisis. They are not the ones to give us lessons." Correa should know. He's a University of Illinois-educated Ph.D in economics.
Lula: the global crisis affecting Latin America wasn't caused by "the socialism of Chavez (or) the struggles of Evo (Morales)," but by wealthy Western states. It's their crisis, not ours. "And who is the god to whom they have appealed? Why, the state! (They) told us what we need in our poor countries. They thought we were incompetent." Look what they did. In attacking George Bush, he added: "The world cannot elect any more presidents that do not listen to social movements, that do not listen to the people."
Paraguay's Lugo is a former Catholic bishop and liberation theology adherent. He said his country changed "because of your movements' voices of hope" and quoted from the Guarani people's ancient aspiration that one day a "Land Without Evil" might be created. He added that "Latin America is changing and the hope is the north will change as well. We have seen the economic policies they said were so efficient fail."
For the ninth consecutive year, WSF's participants agreed that "Another World Is Possible." This year it's essential, now more than ever.
Davos-Klosters, Switzerland, 1 February 2009 ? The world’s business and government leaders only have a short time to develop effective solutions to the current economic crisis, participants at this year’s World Economic Forum Annual Meeting were told. In the closing plenary, participants joined members of the Forum’s Global Agenda Councils to formulate a message to key international decision-makers, such as the heads of government and ministers who will gather in April for the G20 summit. The message from the Annual Meeting is that leaders must continue to develop a swift and coordinated policy response to the most serious global recession since the 1930s: global challenges demand global solutions.
Founder and Executive Chairman of the World Economic Forum, Klaus Schwab said: “We have to address all the issues simultaneously and not forget any of them, like climate change. We have to involve all the stakeholders of global society in this process so that they feel responsible. Above all we need to restore confidence in our systems.”
Throughout the five days of the Annual Meeting participants worked on a number of objectives:
• Supporting governments and governance institutions, particularly the G20
Participants at today’s closing plenary painted a sobering picture of a rapidly darkening economic landscape, in which the pain of rising unemployment, home foreclosures, bankruptcies and poverty are only beginning to be felt.
“This is the time to see courageous leadership on the part of the G20,” said Maria Ramos, Group Chief Executive, Transnet, South Africa and Co-Chair of World Economic Forum Annual Meeting 2009. “The time for words is over; this is the time for implementation and action. If we come back in six months or a year and are still talking about the same things, we will have failed. And the social unrest we will have to deal with will be absolutely dramatic.”
DAVOS IS JUST AN EGO TRIP FOR THE 1%
David Weidner
www.marketwatch.com/story/davos-is-just-an-ego-trip-for-the-1-2012-01-31
The World Economic Forum in Davos, Switzerland, has just wrapped up, and the world is a better place.
Now we know which billionaire can ski and solve — or perhaps cause — a banking crisis at the same time.
If it sounds silly, it’s nothing compared to the four-day event in one of the most exclusive ski resorts in the world. After wrecking the global economy, the powerful and rich are back to their insulated worlds. In one session, panelists and the audience were asked if 20th century capitalism was failing in the 21st century society. Read full story on Davos panel .
Almost no one raised their hand, except...
David Rubenstein, managing director of the private equity powerhouse Carlyle Group, Raghuram G. Rajan, Professor of Finance at the Booth School of Business at the University of Chicago; Ben Verwaayen, chief executive of Alcatel-Lucent / and Brian T. Moynihan, CEO of Bank of America .
In a nutshell, you can see the essential problem with Davos. It’s really not the “make the world a better place” forum it purports to be. It’s an ego trip for billionaires and politicians. It’s a place to reinforce the political and economic equation of haves and have-nots.
The billionaires who stormed Davos
People who run hedge funds, banks and multi-national corporations can see that the global system is working just fine. And they’re right. It is for them.
And their message — from the heart of cuckoo clocks, pocket knives and premier chocolates — to the rest of the globe? Let them eat Cadbury.
“You have many people in the room who affect those global businesses from the political side in government or the business side,” Frank said. So, if you’re doing business globally, “in two or three days you can get a lot of information about those markets and maybe do some deals.”
“There are very few truly exclusive clubs that make you feel special. Davos remains one of those clubs.”
Now, there’s nothing wrong with having an exclusive club, or a global chamber of commerce meeting, or even calling it what it is: an old boys’ club schmoozefest.
A snow-covered city sign stands in front the congress center in Davos. What is a problem is that Davos is revered by its participants and, in turn, by the media, as some kind of global summit where everyone tries to learn, discuss and make decisions based on the concentration of thought and power in the rooms.
Are the rich and powerful meeting in Davos truly addressing the need for a more just global economic system?
http://www.aljazeera.com/programmes/coun...21477.html
STRAUSS-KAHN NAMED TO LEAD IMF, PLEDGES REFORMS
It may be important for the just economics scholars amongst us to weigh up and advise us of the significance of the Strauss-Kahn comitment. Who has time to consider and respond ?
Peter
WASHINGTON (AFP) - The International Monetary Fund appointed Dominique Strauss-Kahn its new chief Friday as the battered institution seeks to redefine itself in the face of increasing skepticism globally. The IMF executive board said it had chosen "by consensus" the French Socialist former finance minister as managing director for a five-year term, starting November 1, to succeed Rodrigo Rato of Spain.
"I am determined to pursue without delay the reforms needed for the IMF to make financial stability, serve the international community, while fostering growth and employment ," Strauss-Kahn said in a statement after the announcement. Strauss-Kahn, 58, had been widely expected to get the job after he gathered support from Europe and the United States, the powers that still dominate the IMF . The Bretton Woods institution, created in 1944, is seeking to redefine its role in a globalizing world reshaped by the rising economic clout of developing countries like China, India and Brazil.Strauss-Kahn has pledged to be a "consensus-builder" at the 185-nation financial institution, which bails out countries in crisis but faces its own crisis of relevancy and legitimacy in a world flush with cash and access to capital. The European Union candidate said his election by the 24-member board of executive directors was "a joy, honor and responsibility." His sole rival for the job had been Josef Tosovsky, a former Czech central bank chief proposed last month by Russia. Tosovsky's own country had not backed him. After his nomination in July, Strauss-Kahn traveled the globe visiting a host of countries, many of them emerging or middle-income economies, in search of support. On Thursday, Brazil -- Latin America's regional powerhouse -- along with Argentina and Chile officially backed Strauss-Kahn, who was first proposed by French President Nicolas Sarkozy. Rato's abrupt announcement in late June that he was quitting cast a cloud over the broad reform program he spearheaded, which made little progress. Among the challenges Strauss-Kahn inherits is the IMF's dearth of borrowers -- this after the institution aided a number of countries in crisis during the 1990s such as Indonesia, South Korea, Russia, Brazil, Argentina and Mexico.
Nearly all those countries have repaid their debt as their economies strengthened, strapping the IMF which partly depends on the interest paid on loans to finance operations. Another key issue is the IMF's relevancy, which is questioned by many countries because member voting rights and the board's structure of representation do not reflect the strength of the new economic powers. That issue is at the heart of the debate over the unwritten tradition that leading European powers pick the head of the IMF and the United States chooses the president of the World Bank. Strauss-Kahn awaited the IMF announcement in Santiago, Chile, on what he called a "good symbol" visit to underscore his pledge to give more voice to emerging countries if elected .
He has scheduled a news conference in Paris on Monday. In a board interview at IMF headquarters in Washington last week, Strauss-Kahn acknowledged the Fund's dire need of reform. "It will be a hard task for all of us to rebuild both the relevance and the legitimacy of this organization . But I am prepared to do that and I ask you to be prepared as well," he said. Rato welcomed the board's decision, saying Strauss-Kahn "possesses the experience, vision and dedication to public service needed to successfully lead the IMF at this important juncture." The outgoing managing director, who said he will step down on October 31, also praised the board's "transparent and competitive process" in selecting his successor.
World Bank president Robert Zoellick, a former US trade chief who took office in July, said Strauss-Kahn was "a respected leader and economist." "I am very pleased Dominique is interested in enhancing the close cooperation between our two institutions," Zoellick said. In France, Sarkozy said Strauss-Kahn's selection was "a great victory for French diplomacy." The change in IMF leadership will follow the October 20-22 annual meetings of the IMF and the World Bank in Washington.
Prof Jean-Pierre Lehmann, IMD International, Lausanne
The annual mela in Davos, Switzerland, begins today and is being held under the theme "The Shifting Power Equation." However, as Prof Jean-Pierre Lehmann from IMD Lausanne points out, this in fact is the "Demise of the Hub-and-Spokes World Economy" via "The 21st Century Great Global Economy Paradigm Shift." With multiple sessions on climate chaos which some in the gathered crowd are cynically branding as climate collapse -- this may be one of the "greenest" gatherings of the throng ever . "Better late than never!" as one social entrepreneur put it. Prof Lehmann writes:
Emirates Airlines runs daily non-stop flights from Shanghai and Beijing to Dubai. Soon it will be inaugurating a non-stop flight between Dubai and Sao Paulo. It will then be possible for Brazilian and Chinese business executives (and others including government officials, students, tourists and honeymooners) to fly between their two countries without the hitherto obligatory stop-over in either Frankfurt (Europe) or Los Angeles (US). Regular direct flights from Dhaka, Karachi, Mumbai and Colombo to Dubai also secure the dynamic and ever stronger link between the economies of the Gulf and the economies of the Indian Sub-Continent. Arab businessmen will be flying to all these destinations as an ever increasing flow of goods, capital and ideas link the four regions: Greater China, South Asia, South America and the Middle East.
The economic ties and business networks across Asia are being developed and discussed in the recently inaugurated Indian-Arab and Chinese-Arab CEO annual summits convened by the UAE based forum Moutamarat. This reflects, among other things, the fact that China, India and the states of the Gulf Cooperation Council are the three fastest growing world economies. The recent increasingly growing business ties between and across the three Asian regions (West, South and East) have been described as the New Silk Road.
While the trans-Asian connection - which increasingly also encompasses Central Asia within its expanding orbit - is the most important economic story of the first decade of the 21st century, it is by no means the only one. In October 2006, as ATCA observed, Beijing hosted the first China-Africa Summit, a very grand affair that brought to the Chinese capital over 50 African heads of state. China is by far Africa's fastest growing trade and investment partner; with India also increasingly active, this trend has been described in a publication by Harry Broadman of the World Bank as "Africa's Silk Road: China and India's New Economic Frontier." At a policy level, the new relationship between the three continents of the "developing world", Africa, Asia and Latin America, was reflected in the establishment of the G-20 during the Cancún WTO ministerial meeting in September 2003; led by Brazil, India, China and South Africa, the G-20 is the first developing world trade alliance to counter the hitherto overbearing authority of the "Quad" (US, EU, Japan and Canada).
All these trends are indicative of the terminal demise of the 20th century global hub-and-spokes business paradigm, whereby the OECD (Organisation for Economic Cooperation and Development) countries represented the hub and the different parts of the developing world the spokes. The new paradigm, though not yet entirely clear, is one of growing axes of trade, investment, networks and knowledge across the erstwhile spokes. Economic ties are also spawning more political and cultural connections. By no means should one infer that the old industrialised nations are "finished". The US, EU, Japan, Australia, Switzerland and Norway remain extremely rich in both material and cultural wealth. But, in the words of Bob Dylan, " The times they are a-changin'" , and both the demise of the hub-and-spoke and the rise of the new global axes of business development are inexorable.
The influential and highly respected economics editor of the Financial Times Martin Wolf, also an ATCA member, wrote in a 2005 article: "The economic rise of Asia's giants is the most important story of our age. It heralds the end, in the not too distant future, of as much as five centuries of domination by the Europeans and their colonial offshoots." [ Asia's G iants on the M ove, 23 February 2005] The rise of the European seaborne empires in the late 15th century spelt the end of the old Silk Road, as its merchants and rulers stayed confined in their resolute ways and mindsets, thereby failing to respond to the new competition and technologies, and to adapt to the changing times. The shoe is now on the Western foot.
This will have immense implications across virtually every dimension one can think of. Western policy makers and business leaders will need to adjust. The "typical" Western multinational enterprise that runs its business empire from a Western central hub with the developing world compartmentalised into regional spokes - Africa, Middle East, Latin America, South Asia, Asia Pacific, etc - is unlikely to capture the ethos of the new age and therefore ultimately will lose out on the business being created. The Western multinational corporation of the 21st century in order to survive, let alone thrive, will need to reflect these new realities, in terms of organisation, management, culture and manpower.
Western policy makers must also fully absorb the implications of the changing paradigm. The 21st century marks the end of the Western imperial age - what the Indian historian BN Pandey called "The Vasco da Gama era of history", stretching from the rise of the Iberian seaborne empires in the late 15th century to the resurgence of the great Asian nations in the late 20th/early 21st centuries. This new multipolar world will require, more than ever, the strengthening of multilateral institutions, and especially in such a way that they truly reflect the changes. Western political and business leaders must abandon their badgering colonial attitudes in favour of a truly global collaborative mindset.
It cannot be over-emphasised that carrying out these changes, especially the change in mindsets, is going to be extremely difficult. But there is no real choice, apart from decline and extinction.
Western business leaders and policy makers might be inspired by what Bob Dylan had to say:
Admit that the waters
Around you have grown
And accept it that soon
You'll be drenched to the bone
Then you better start swimmin'
Or you'll sink like a stone
For the times they are a-changin'
Very warm regardsJean-Pierre Lehmann
Jean-Pierre Lehmann is Professor of International Political Economy at IMD International -- Institute for Management Development -- in Lausanne, Switzerland, since January 1997. His main areas of expertise are the socio-economic and business dynamics of East Asia, the impact of globalisation on developing countries and the government -- business interface, especially in respect to the global trade and investment policy process. In 1994 he launched the Evian Group, which consists of high ranking officials, business executives, independent experts and opinion leaders from Europe, Asia and the Americas. The Evian Group's focus is on the international economic order in the global era, specifically the reciprocal impact and influence of international business and the WTO agenda. Jean-Pierre Lehmann acts in various leading capacities in several public policy institutes and organisations. He obtained his undergraduate degree from Georgetown University, Washington DC, and his doctorate from St Antony's College, Oxford University. He is the author of several books and numerous articles and papers primarily dealing with modern East Asian history and East Asia and the international political economy.
Prior to joining IMD, Jean-Pierre Lehmann has had both an academic and a business career which over the years has encompassed activities in virtually all East Asian and Western European countries, as well as North America. He was (from 1992) the founding director of the European Institute of Japanese Studies (EIJS) at the Stockholm School of Economics and Professor of East Asian Political Economy and Business. From 1986 to 1992 he established and directed the East Asian operations of InterMatrix, a London based business strategy research and consulting organisation. During that time he was operating primarily from Tokyo, with offices in Seoul, Taipei, Bangkok and Jakarta and was concurrently Affiliated Professor of International Business at the London Business School. Other previous positions include: Associate Professor of International Business at INSEAD (European Institute of Business Administration) in Fontainebleau, France; Visiting Professor at the Bologna Center (Italy) of the Johns Hopkins University School of Advanced International Studies; twice in the 70s Visiting Professor and Japan Foundation Fellow at the University of Tohoku, Sendai (Japan); and Founding Director of the Center for Japanese Studies at the University of Stirling (Scotland), where he also taught East Asian history in the University's History Department. From 1981 to 1986 he directed the EC-ASEAN 'Transfer of Technology and Socio-Economic Development Programmes' held in Singapore, Bangkok, Jakarta, Kuala-Lumpur and Manila.
THE DAVOS WORLD ECONOMIC FORUM
COMPETING IDEOLOGIES: DAVOS v BELEM
Stephen Lendman
Founded in 1971, the Geneva-based World Economic Forum (WEF) meets annually in Davos, Switzerland to bring together top business and political leaders as well as mostly neoliberal minded intellectuals, economists, journalists, and others.
WEF calls itself "an independent international organization committed to improving the state of the world by engaging leaders in partnerships to shape global, regional and industry agendas." It aims for "world-class governance (read dominance)." Its motto is "entrepreneurship in the global public interest (read for the top 1%)." This year's theme - "Shaping the Post-Crisis World" - a tall order addressing what they caused that's heading the world for a calamitous depression.
Its five-day 2009 meeting attracted over 2500 participants from 91 countries, including over 1170 CEOs and chairpersons from the world's most powerful companies. Others included 219 public figures, 40 heads of state, 64 cabinet ministers, and various other high-level business, government, think tank, media, academic, religious, organizational, and union officials. Noticeably different, according to Bloomberg, "was the virtual absence of Wall Street figures" as well as top Obama administration figures.
Annually, Davos becomes headquarters for the world's power elite to meet and review past achievements, challenges, and prospects for greater exploitation of world markets, resources, and people everywhere. Or put another way, to use money to create more of it, for themselves, of course.
Ordinarily the occasion is celebratory. Capitalism flaunts its successes and parties. This year gloom prevailed, and one topic above others took precedence: assessing the global economic crisis, its risks in the near and longer term, plotting strategies for the coming year and beyond, and avoiding an appearance of panic in an event drawing prominent media coverage.
Not easy with capitalism most in crisis since the Great Depression, no one sure how to right things, and attendees like George Soros believing today's problem "is larger than in the 1930s." Bloomberg headlined the mood: "Grimmest Davos Ever Brings Anger, Finger-Pointing at Bankers," and one observer noted that "the only good news in Davos was the weather."
Bloomberg added that "Almost everyone blamed the few bankers who showed up for the near-collapse of the financial system," with harshest criticism for Wall Street, the Bush administration, and Obama officials for their absence. Economist Kenneth Rogoff called this year the grimmest Davos ever. Abraaj Capital's CEO, Arif Naqvi said "People are looking for the solution, but don't yet have the question formulated." Other attendees predicted that conditions in 2010 may be no better.
The Financial Times' (FT) John Gapper wrote: "This was not the week to be seen in Davos and, if you were there, it was not the time to remain calm." He cited one debate with Black Swan author Nassim Taleb saying bankers should be punished and forced to return their bonuses. He described WEF founder Klaus Schwab as "pale-faced," considering "the impossible task this year - to forge harmony out of tension" and plan how to recover.
For many, Davos this year was "where the pent-up dismay and anger over what Wall Street wrought boiled to the surface" despite efforts to contain it. The stars were those who saw the crisis early and warned about it. Figures like Taleb and Nouriel Roubini who says the worst is still to come.
The FT reported that "The unrelenting economic gloom and the fragility of the banking system have cast a cloud over the global agenda and (managed) to dominate discussions. Drama did as well with Turkey's prime minister Erdogan storming out after an exchange with Israel's Shimon Peres over Gaza, but there was more. Despite its absence, America dominated geopolitical and financial concerns.
The Wall Street Journal reported that "The premiers of Russia and China slammed the US economic system in speeches (January 28), holding it responsible for the global economic crisis."
Implying but not naming America, China's Wen Jiabao said the financial crisis was "attributable to inappropriate macroeconomic policies of some economies and their unsustainable model of development characterized by prolonged low savings and high consumption; excessive expansion of financial institutions in blind pursuit of profit."
Putin, in contrast, was blunt in attacking a "unipolar world," saying it's "dangerous" to rely on the US dollar, and calling for the development of multiple, regional reserve currencies in addition to the dollar. He also mocked US businessmen who boasted last year that America's economy was strong and prospects sound. "Today," said Putin, "investment banks, the pride of Wall Street, have virtually ceased to exist," then added: "The entire economic growth system, where one regional center prints money without respite and consumes material wealth, while another regional center manufactures inexpensive goods....has suffered a major setback."
US officials didn't comment but former Fed vice-chairman, Alan Blinder said: "The sad thing is that we might have scoffed at (these comments) a while ago. But we really dragged the world down" economically. "No wonder (Klaus) Schwab looked so stricken," said FT's Gapper.
Davos is a secluded ski village. Protests are banned but not entirely. Dozens marched through the town and threw snowballs and shoes at Swiss police and the convention center. Among them were members of the Young Socialist and Green parties as well as Amnesty International representatives.
Things were violent in Geneva where Germany's Deutsche Welle reported that "Riot police fired tear gas and water cannons at bottle-throwing demonstrators protesting against the annual World Economic Forum in Davos." AP said hundreds turned out for a largely peaceful demonstration until police "chased black-clad protesters through (Geneva's) narrow streets as shoppers took refuge in bars and cafes."
Regional secretary for the trade union Unia, Alessandro Pelizzari, spoke for many in saying: "100,000 lost their jobs in Europe this week. And those responsible are in Davos." One of the protest organizers, Laurent Tettamenti, added: "The WEF is a symbol of the neoliberal policies of the last 20 years that have caused (today's) crisis. We have no confidence that the same people who caused (this) can solve it."
The World Social Forum's (WSF) Alternative Vision
At a time of global crisis, WSF more than ever was crucial, relevant and vital. Founded by Brazil's Ethos Institute for Business and Social Responsibility chairman Oded Grajew, it held its first meeting concurrently with WEF in late January 2001 and continues doing it annually. Its motto - "Another world is possible." Today, it's essential.
WEF is "an opened space - plural, diverse, non-governmental and non-partisan - that stimulates decentralized debate, reflection, (and) proposals building. (It) experiences exchange and alliances among movements and organizations engaged in concrete actions towards....more solidarity, (and a) democratic and fair world."
The first three forums were in Porto Alegre, Brazil. It moved to India in 2004, then back to Porto Alegre in 2005. In 2006, it was "polycentric" - in January in Caracas, Venezuela and Bamako, Mali, then delayed until March in Karachi, Pakistan because of the area's earthquake. In 2007, it was in Nairobi, Kenya, then in 2008, it became a Global Call for Action and Mobilization by letting thousands of autonomous organizations worldwide hold simultaneous events in dozens of countries. The 2009 forum returned to the Amazonian port city of Belem in northern Brazil, about 60 miles upriver from the Atlantic Ocean.
WSF's Charter of Principles
After its 2001 inaugural, WSF drafted Principles "to guide the continued pursuit of (its) initiative."
Unlike predatory capitalism on display at Davos:
(1) WSF "is an open meeting place for reflective thinking, democratic debate of ideas, formulation of proposals," free exchanges among participants, and formulations of collective action plans. Participants are civil society individuals, groups and organizations committed to a new society "directed towards fruitful relationships among Mankind and between it and the Earth."
(2) WSF's "Another World Is Possible" theme is a "permanent process of seeking and building alternatives."
(3) WSF is "a world process."
(4) WSF supports global justice, democracy, human rights, equality, the "sovereignty of peoples," and opposes neoliberalism, predatory capitalism, complicit governments, and their destructive harm.
(5) WSF is a civil society meeting ground, not a body representing it.
(6) Forums are for participant exchanges, not to establish positions for WSF as a body or make it a "locus of power."
(7) WSF facilitates and circulates ideas and decisions "without directing, hierarchizing, censuring or restricting them, but as deliberations" and decisions by Forum participants.
(8) WSF is decentralized, "plural, diversified, non-confessional, non-governmental and non-party" locally and internationally "to build another world."
(9) WSF is committed to "pluralism (and) diversity." Government officials who accept the Charter Principles are welcome to attend. More on that below.
(10) WSF opposes totalitarianism and reductionist economic views. It stands in solidarity with all humanity in peace and harmony for a better world.
(11) WSF is a Forum for debate, reflection and exchange of ideas on how to "resist and overcome" the domination of capital.
(12) WSF "encourages understanding and mutual recognition (among) participant organisations and movements, and places special value on (exchanges) among them."
(13) WSF aims to "strengthen and create new national and international links (to) increase the capacity for non-violent social resistance (against) dehumani(zing) the world."
(14) WSF aims to have a global agenda for "building a new world in solidarity."
Themes and Solidarity in Belem
Over 100,000 attendees from 150 countries voiced common themes - Pan-Amazonia for the Forum's site, opposition to predatory capitalism, wars, inequality, injustice, intolerance, environmental destruction, prejudice, and elitism. For six days, hundreds of events took place in workshops, campings, seminars, conferences, speeches, testimonies, marches, cultural and artistic activities, exchanges, reflection, proposals, consensus-building for a better world, and ending with a "Day of Alliances" to decide on joint actions. In all, it was a mass coming together for a better world and an utter rejection of Davos and its ruling ethos.
Latin American Leaders at Belem, Not Davos
On January 29, Venezuela's Hugo Chavez, Brazil's Luiz Inacio Lula da Silva, Bolivia's Evo Morales, Ecuador's Rafael Correa, and Paraguay's Fernando Lugo criticized Washington in Belem.
Correa: "The guilty parties in this crisis try to give lessons on morality and good economic handling. The most powerful people on the planet have united to find a therapy for the dying. They're getting together - the central bankers, the representatives of the large financial firms, the people primarily responsible for the crisis." They caused it. Can we expect them to fix it? Correa called for a "common project," a 21st century socialism characterized by justice and efficiency, a return to state planning "for the development of the majority of the people."
He also attacked US-dominated institutions like the IMF and World Bank: "Using the art of deception they will try to confuse us into thinking the victims are the guilty ones. They are the ones responsible for the crisis. They are not the ones to give us lessons." Correa should know. He's a University of Illinois-educated Ph.D in economics.
Lula: the global crisis affecting Latin America wasn't caused by "the socialism of Chavez (or) the struggles of Evo (Morales)," but by wealthy Western states. It's their crisis, not ours. "And who is the god to whom they have appealed? Why, the state! (They) told us what we need in our poor countries. They thought we were incompetent." Look what they did. In attacking George Bush, he added: "The world cannot elect any more presidents that do not listen to social movements, that do not listen to the people."
Lula is a former factory worker and union leader, yet far from a popular president. Outside the event, several hundred in his United Socialist Workers Party (PSTU) protested his making concessions to bankers, business and Washington, yet doing little to stabilize employment for ordinary Brazilians.
Paraguay's Lugo is a former Catholic bishop and liberation theology adherent. He said his country changed "because of your movements' voices of hope" and quoted from the Guarani people's ancient aspiration that one day a "Land Without Evil" might be created. He added that "Latin America is changing and the hope is the north will change as well. We have seen the economic policies they said were so efficient fail."
Evo Morales used anti-imperialist slogans in condemning American interventionism and its regional military bases. He said "Before you are four presidents - four presidents (Lula spoke separately) who could not be here were it not for your fight. I see so many brothers and sisters here, from Latin America's social movements to European figures."
Hugo Chavez spoke about a new revolutionary path saying social movements have been in the "trenches of resistance" and must go on the "offensive" to create alternatives to global capitalism.
"Just like Latin America and the Caribbean received the biggest dose of neoliberal venom, our continent has been the immense territory where social movements have sprouted with the greatest strength and began to change the world....another world is necessary (and) is being born in Latin America and the Caribbean. Revolutions are no longer guerrilla battalions, no! This is a new revolutionary wave....This year will be hard, we must unite. Our socialism should not be a copy. Our socialism should be a heroic creation....Socialism of our America, a profoundly democratic socialism. This is our path."
For the ninth consecutive year, WSF's participants agreed that "Another World Is Possible." This year it's essential, now more than ever.
GLOBAL LEADERS URGE COLLABORATION AND SWIFT ACTION AT CLOSE OF ANNUAL MEETING IN DAVOS
www.weforum.org/en/media/Latest%20Press%20Releases/AM09_PR_Closing
Klaus Schwab: we need to redesign our systems in a proactive, collaborative way Pain of economic crisis creates risk of social instability List of detailed outcomes of the Annual Meeting:
www.weforum.org/en/media/Latest%20Press%20Releases/AM09_PR_Closing
Klaus Schwab: we need to redesign our systems in a proactive, collaborative way Pain of economic crisis creates risk of social instability List of detailed outcomes of the Annual Meeting:
Davos-Klosters, Switzerland, 1 February 2009 ? The world’s business and government leaders only have a short time to develop effective solutions to the current economic crisis, participants at this year’s World Economic Forum Annual Meeting were told. In the closing plenary, participants joined members of the Forum’s Global Agenda Councils to formulate a message to key international decision-makers, such as the heads of government and ministers who will gather in April for the G20 summit. The message from the Annual Meeting is that leaders must continue to develop a swift and coordinated policy response to the most serious global recession since the 1930s: global challenges demand global solutions.
Founder and Executive Chairman of the World Economic Forum, Klaus Schwab said: “We have to address all the issues simultaneously and not forget any of them, like climate change. We have to involve all the stakeholders of global society in this process so that they feel responsible. Above all we need to restore confidence in our systems.”
Throughout the five days of the Annual Meeting participants worked on a number of objectives:
• Supporting governments and governance institutions, particularly the G20
• Ensuring that global challenges are examined in a holistic way, including climate change and water security
• Beginning a process to develop recommendations on how the structure and strategies of international cooperation can be updated
• Improving the ethical basis for business as a constructive social actor
• Restoring confidence in the future
For more details on detailed outcomes of the Annual Meeting click here
Participants at today’s closing plenary painted a sobering picture of a rapidly darkening economic landscape, in which the pain of rising unemployment, home foreclosures, bankruptcies and poverty are only beginning to be felt.
“This is the time to see courageous leadership on the part of the G20,” said Maria Ramos, Group Chief Executive, Transnet, South Africa and Co-Chair of World Economic Forum Annual Meeting 2009. “The time for words is over; this is the time for implementation and action. If we come back in six months or a year and are still talking about the same things, we will have failed. And the social unrest we will have to deal with will be absolutely dramatic.”
Klaus Schwab cautioned participants not to raise their expectations for the April G20 summit too high, noting that in London, leaders will focus on immediate, technical responses to the financial and economic crisis. The Forum, he noted, is preparing the launch of a new initiative to address the numerous longer term issues raised by the crisis, particularly the need for a complete overhaul of the existing global governance institutions. “We need to redesign our systems in a proactive, collaborative way,” Schwab said. “We all have to work together.”
DAVOS IS JUST AN EGO TRIP FOR THE 1%
David Weidner
www.marketwatch.com/story/davos-is-just-an-ego-trip-for-the-1-2012-01-31
The World Economic Forum in Davos, Switzerland, has just wrapped up, and the world is a better place.
Now we know which billionaire can ski and solve — or perhaps cause — a banking crisis at the same time.
If it sounds silly, it’s nothing compared to the four-day event in one of the most exclusive ski resorts in the world. After wrecking the global economy, the powerful and rich are back to their insulated worlds. In one session, panelists and the audience were asked if 20th century capitalism was failing in the 21st century society. Read full story on Davos panel .
Almost no one raised their hand, except...
David Rubenstein, managing director of the private equity powerhouse Carlyle Group, Raghuram G. Rajan, Professor of Finance at the Booth School of Business at the University of Chicago; Ben Verwaayen, chief executive of Alcatel-Lucent / and Brian T. Moynihan, CEO of Bank of America .
In a nutshell, you can see the essential problem with Davos. It’s really not the “make the world a better place” forum it purports to be. It’s an ego trip for billionaires and politicians. It’s a place to reinforce the political and economic equation of haves and have-nots.
The billionaires who stormed Davos
Taking a look at the business community on hand at the World Economic Forum in Davos, Switzerland. Detractors who often chide the city for being too in tune with the global elite should back off their criticism, only 70 of the 2,500 attendees are billionaires. The rest are merely millionaires.
People who run hedge funds, banks and multi-national corporations can see that the global system is working just fine. And they’re right. It is for them.
And their message — from the heart of cuckoo clocks, pocket knives and premier chocolates — to the rest of the globe? Let them eat Cadbury.
And if you don’t believe it, consider Robert Frank, author of “Richistan,” “High-Beta Rich” and wealth reporter for The Wall Street Journal. In a recent appearance on the WSJ’s Mean Street program, Frank said Davos remains a hot ticket in a world getting crowded by billionaires; 70 attended last week.
“You have many people in the room who affect those global businesses from the political side in government or the business side,” Frank said. So, if you’re doing business globally, “in two or three days you can get a lot of information about those markets and maybe do some deals.”
The other reason?
“There are very few truly exclusive clubs that make you feel special. Davos remains one of those clubs.”
Now, there’s nothing wrong with having an exclusive club, or a global chamber of commerce meeting, or even calling it what it is: an old boys’ club schmoozefest.
A snow-covered city sign stands in front the congress center in Davos. What is a problem is that Davos is revered by its participants and, in turn, by the media, as some kind of global summit where everyone tries to learn, discuss and make decisions based on the concentration of thought and power in the rooms.
WEF 2018: THE PROBLEM WITH DAVOS
Are the rich and powerful meeting in Davos truly addressing the need for a more just global economic system?
http://www.aljazeera.com/programmes/coun...21477.html
WHAT's WEF AND WHY DOES DAVOS MATTER?
http://www.aljazeera.com/news/2018/01/wo...44445.htmlSTRAUSS-KAHN NAMED TO LEAD IMF, PLEDGES REFORMS
It may be important for the just economics scholars amongst us to weigh up and advise us of the significance of the Strauss-Kahn comitment. Who has time to consider and respond ?
Peter
WASHINGTON (AFP) - The International Monetary Fund appointed Dominique Strauss-Kahn its new chief Friday as the battered institution seeks to redefine itself in the face of increasing skepticism globally. The IMF executive board said it had chosen "by consensus" the French Socialist former finance minister as managing director for a five-year term, starting November 1, to succeed Rodrigo Rato of Spain.
"I am determined to pursue without delay the reforms needed for the IMF to make financial stability, serve the international community, while fostering growth and employment ," Strauss-Kahn said in a statement after the announcement. Strauss-Kahn, 58, had been widely expected to get the job after he gathered support from Europe and the United States, the powers that still dominate the IMF . The Bretton Woods institution, created in 1944, is seeking to redefine its role in a globalizing world reshaped by the rising economic clout of developing countries like China, India and Brazil.Strauss-Kahn has pledged to be a "consensus-builder" at the 185-nation financial institution, which bails out countries in crisis but faces its own crisis of relevancy and legitimacy in a world flush with cash and access to capital. The European Union candidate said his election by the 24-member board of executive directors was "a joy, honor and responsibility." His sole rival for the job had been Josef Tosovsky, a former Czech central bank chief proposed last month by Russia. Tosovsky's own country had not backed him. After his nomination in July, Strauss-Kahn traveled the globe visiting a host of countries, many of them emerging or middle-income economies, in search of support. On Thursday, Brazil -- Latin America's regional powerhouse -- along with Argentina and Chile officially backed Strauss-Kahn, who was first proposed by French President Nicolas Sarkozy. Rato's abrupt announcement in late June that he was quitting cast a cloud over the broad reform program he spearheaded, which made little progress. Among the challenges Strauss-Kahn inherits is the IMF's dearth of borrowers -- this after the institution aided a number of countries in crisis during the 1990s such as Indonesia, South Korea, Russia, Brazil, Argentina and Mexico.
Nearly all those countries have repaid their debt as their economies strengthened, strapping the IMF which partly depends on the interest paid on loans to finance operations. Another key issue is the IMF's relevancy, which is questioned by many countries because member voting rights and the board's structure of representation do not reflect the strength of the new economic powers. That issue is at the heart of the debate over the unwritten tradition that leading European powers pick the head of the IMF and the United States chooses the president of the World Bank. Strauss-Kahn awaited the IMF announcement in Santiago, Chile, on what he called a "good symbol" visit to underscore his pledge to give more voice to emerging countries if elected .
He has scheduled a news conference in Paris on Monday. In a board interview at IMF headquarters in Washington last week, Strauss-Kahn acknowledged the Fund's dire need of reform. "It will be a hard task for all of us to rebuild both the relevance and the legitimacy of this organization . But I am prepared to do that and I ask you to be prepared as well," he said. Rato welcomed the board's decision, saying Strauss-Kahn "possesses the experience, vision and dedication to public service needed to successfully lead the IMF at this important juncture." The outgoing managing director, who said he will step down on October 31, also praised the board's "transparent and competitive process" in selecting his successor.
World Bank president Robert Zoellick, a former US trade chief who took office in July, said Strauss-Kahn was "a respected leader and economist." "I am very pleased Dominique is interested in enhancing the close cooperation between our two institutions," Zoellick said. In France, Sarkozy said Strauss-Kahn's selection was "a great victory for French diplomacy." The change in IMF leadership will follow the October 20-22 annual meetings of the IMF and the World Bank in Washington.