Big dance in little Davos | Sunday Observer

Big dance in little Davos

22 January, 2023

“The advocates of free markets in all their visions say that crises are rare events, though they have been happening with increasing frequency as we change the rules to reflect beliefs in perfect markets. I would argue that economists, like doctors, have much to learn from pathology. We see more clearly in these unusual events how the economy really functions. In the aftermath of the Great Depression, a peculiar doctrine came to be accepted, the so-called “neoclassical synthesis.” It argued that once markets were restored to full employment, neoclassical principles would apply. The economy would be efficient. We should be clear: this was not a theorem but a religious belief.” –Joseph Stiglitz

The 53rd meeting of the World Economic Forum (WEF) was held in the city of Davos, Switzerland from January 16, to 20, 2023. Davos is a small ski resort with a population of about 12000, near Zurich, Switzerland. Every year thousands of selected participants that includes economists, political leaders, business leaders, investors, journalists, and celebrities attend the meeting. The organisation spends millions of dollars to have this big gathering though each participant pays about US$ 20,000 to secure an invitation.

The Davos forum was established in 1971 as an “independent, impartial and not tied to special interests” non-profit organisation by Professor Klaus M. Schwab of the University of Geneva. Since Prof. Schwab holds the position of the Executive Chair of the WEF since its inception, it may be helpful to know a bit about the man himself, in the process of understanding the impact of the juggernaut he created in 1971.

He is a Swiss-German (born in Ravensburg, Germany, in 1938) who holds a Master’s degree in Public Administration from the John F. Kennedy School of Government of the Harvard University, a PhD in Engineering from the Swiss Federal Institute of Technology and a PhD in Economics from the University of Fribourg, Switzerland.

In addition to being the founder of the WEF, he has co-founded (with his wife Hilde) the Schwab Foundation for Social Entrepreneurship. He is also the founder of the Forum of the Young Global Leaders (started in 2004) and of the Global Shapers Community (started in 2011).

The Schwab Foundation for Social Entrepreneurship provides platforms at regional and global level to highlight and advance leading models of sustainable social innovation. It identifies a selected community of social entrepreneurs and engages it in shaping global, regional and industry agenda that supposedly improve the state of the world in close collaboration with the other stakeholders of the WEF.

The Forum of Young Global Leaders (YGL) is a multi stakeholder community of exceptional young (30 to 40 years old) leaders who share a commitment to shaping the global future.

Each year the WEF identifies 100 extraordinary individuals worldwide to join the YGL community for five years.

International community

The process has produced a powerful international community of over 1500 young leaders who can make a significant impact on our global future.

The Global Shapers Community (GSC) is a global network of local communities of young people (20 to 30 years old) with exceptional achievements. There are about 500 such groups established in major cities around the world over the last ten years.

These three steps starting with 20 years of age in the GSC, advancing to Young Global Leaders and then to be active members of WEF will certainly help shaping their thinking patterns according to Prof. Schwab’s vision for the future of the world.

Founded in 1971 by Prof. Schwab as the European Management Forum, a Non-Governmental Organisation, inviting about 400 European industry leaders, with the intention of introducing management strategies of American companies to Europe, the WEF evolved into what it is today over the next ten years when the leaders of the powerful countries and monopolies around the world noticed the opportunities such a forum provides in expanding their influence.

This year there are over 3,000 participants representing over 100 countries and regions. Though it is called the ’World Economic Forum’, about two-third of the participants are from the following ten nations. USA (27 percent), Switzerland (10 percent), UK (10 opercent), Germany (4 percent), India (4 percent), Japan (3 percent), UAE (3 percent), France (3 percent), Netherlands (2 percent), and South Africa (2 percent).

Though there were about 40 heads of states in attendance the only leader from a G8 country was the Chancellor of Germany. The delegations from the US and UK consisted of only a few State officials and more of industry representatives.

Ten to fifteen percent of participants from the countries such as Germany, France, India, UAE, Netherlands and South Africa were Government officials. We may also get an idea about the importance of making a presence at the event for different industries and business establishments by looking at the number of representatives from different companies at the event paying almost US$ 20,000 per head just to get in.

Records show that there have been 13 attendees from the news organisation CNBC, nine from Accenture, eight from Salesforce, and seven each from companies like Google, Unilever, Wall Street Journal, Emirates, and Stanford University. There are about 700 CEOs in attendance too.

Imagining this elite group of billionaires, millionaires, politicians, industry and media representatives getting together at a ski resort, hosted by an organisation pushing the ideology of the man at the top for over 50 years.

They are supposedly discussing about climate change and what they can do to protect the environment though over 10 percent of the attendees got there by private jets and others using charted or commercial flights.

Not only the attendees but also the journalists who reported on this extravagant show concerning the well being of others and the planet and many service providers, including sex workers, fly into this little town in thousands during this meeting every year.

Swiss news outlets reported that agencies providing sex workers have reported sharp increase in their revenue since they can charge US$ 700 to US$ 1000 per hour from these rich clients during this period every year.

Billionaire friends

Though the benefits towards the world economy due to the WEF is debatable, that towards the economy of Davos and towards the agenda of Prof. Schwab (sometimes even known as Schwabism) and his billionaire friends may not be that difficult to see.

This perhaps is why, after the 52nd WEF in 2022, Nobel Prize winning economist Joseph Stiglitz said: “After four decades of championing globalisation, it is clear that the Davos crowd mismanaged things. It promised prosperity for developed and developing countries alike.

But while corporate giants in the global north grew rich, processes that could have made everyone better off instead made enemies everywhere. “Trickle-down economics”, the claim that enriching the wealthy would automatically benefit all, was a swindle – an idea that had neither theory nor evidence behind it.

This year’s Davos meeting was a missed opportunity. It could have been an occasion for serious reflection on the decisions and policies that brought the world to where it is today. Now that the globalisation has peaked, we can only hope that we do better at managing its decline than we did at managing its rise.”

The writer has served in the higher education sector as an academic over twenty years in the USA and fifteen years in Sri Lanka and he can be contacted at [email protected]