For anyone thinking that nothing is cheaper than talk, the 32nd annual meeting of the World Economic Forum (New York City, January 31 to February 4) was enlightening. Some 2,700 participants, ranging from kings, presidents and business moguls to professors, clergymen and celebrities, paid $25,000 each to get into the gathering. They then divided their time between ritzy parties, serious elbow-rubbing, and giving off hot air on how to ease grinding poverty around the world.
The meeting, whose title this year was “Leadership in Fragile Times: A Vision for a Shared Future,” was moved for the first time in more than three decades from its usual venue at the Swiss ski-resort of Davos to New York, to express solidarity with the city after September 11. The Forum began in 1971 as a cozy private gathering of the world’s business elite to consider problems and make deals. Gradually the organisers began to invite non-business delegates to talk about social, political and economic issues.
Fears that violence by anti-globalisation protesters might break out in the vicinity of the Waldorf-Astoria, site of this year’s Forum, proved unfounded. Compared to the mayhem created by black-clad window-smashers and scruffy anarchists at other Forums in recent years, the New York meeting was remarkably peaceful. The protests were mostly non-violent and attracted fewer people than expected, the largest totalling approximately 7,000 on February 2. Some 200 protesters were arrested during the forum’s five days; the police charged most of them with disorderly conduct.
In many ways this year’s Forum was completely different from usual. Political and business titans seized on many concerns about the potential harms of globalisation that they had previously ignored. In remarks to the closing session of the meeting, UN secretary-general Kofi Annan warned that the attacks on September 11 have exposed the widening gap between the ‘haves’ and ‘have-nots’ of the world. He encouraged business and political titans to give hope to billions of people struggling to survive in developing countries. Otherwise, Annan predicted that the world would have to contend with the calamitous effects of the collapse or relapse of poor nations “into conflict and anarchy”, where they would be “a menace to their neighbours and potentially, as the events of September 11 so brutally reminded us, a threat to global security.”
Annan urged business leaders to invest in poor nations, which taken together constitute a large potential market. He also called on governments to double their foreign aid to $100 billion annually. Annan said that the concentration of power and wealth in relatively few hands is creating a “perception” that globalisation is to blame. “I believe that perception is wrong, and that globalisation, so far from being the cause of poverty and other social ills, offers the best hope of overcoming them. But it is up to you to prove it wrong, with actions that translate into concrete results for the downtrodden, exploited and excluded.”
Bill Gates, the richest man in the world, warned of the dangerous implications of the imbalance in terms of international trade, which are too favourable to the rich world. “People who feel the world is tilted against them will spawn the kind of hatred that is very dangerous for all of us,” Gates said. “I think it’s a healthy sign that there are demonstrations in the streets. They are raising the question of “is the rich world giving back enough?’” Michael Dell, head of Dell Computers, predicted that investors would soon demand greater openness from companies because of questions of financial manipulation and misrepresentation raised by Enron’s bankruptcy.
As if to leave no doubt that these pleas were falling largely on deaf ears, some leaders complained that large corporations and rich countries are being asked to do too much. Peter Brabeck-Letmathe, chief executive officer of Nestlé, said: “We are blurring and extending our responsibilities into areas which are not necessarily ours.” Instead he stressed that businesses should do what they are best at, that is make money and create jobs, saying: “Our biggest social responsibility on a global basis is job creation.” Employment is “the only way to alleviate poverty in the world.”
US treasury secretary Paul O’Neill defended Washington’s refusal to provide emergency aid to Argentina, the latest casualty of the dogmatic neo-liberal potion of privatisation and open-door foreign trade and investment. He said that such a move would amount to letting American “plumbers and carpenters pay for someone else’s bad decisions.” Richard Hass, the US state department’s director of policy planning, said that the US opposes any commitment to increasing foreign aid. “There are many ways in which development can be contributed to, and I would think that aid in many cases is one of the less important,” he said. Hass’ statement shows that the US is still unwilling to address the causes of resentment against it. The US allocates less than 1 percent of its $10 trillion economy to foreign aid, a lower proportion than most other industrialized nations, and less than the U-set goal of giving 0.7 percent of a nation’s GNP to foreign aid.
The issues dealt with at the World Economic Forum paralleled many of the issues discussed at the World Social Forum, an anti-globalization conference held at the same time in Porto Alegre, Brazil. Speakers at the Social Forum also condemned the Israeli occupation of Palestinian lands, with one speaker condemning the Palestinian self-rule arrangements set up by the Oslo accords as reminiscent of the apartheid-era Bantustans in South Africa.
An air of unease over the poor prospect of economic recovery in the US was palpable. Citigroup vice-chairman Stanley Fischer, who headed the IMF in the 1990s, told a panel of business leaders that he would “be surprised to see a rapid recovery from where we are now ... We’re in for slow growth for several years,” he said. Stephen S. Roach, chief economist at Morgan Stanley, echoed these dire predictions: “We cannot count on the US consumer to carry the US and the global economy on his back any longer.” He also described the jump in US consumer spending in the fourth quarter of last year as “the last gasp of the overly indulgent US consumer.”
In addition to warnings of the potential evils of globalisation, criticism of the self-centred foreign policy of the US was another surprising motif throughout the meeting. Speaker after speaker described the US as an arrogant superpower, too committed to Israel and insensitive to the needs of poor countries or the advice of allies. French foreign minister Hubert Vedrine criticised America’s “indifference” to its allies, making it clear that he was not confining his criticism to the current administration. “We find it very difficult to penetrate the minds of American leaders, the previous administration as well as this one,” agreed Malaysia’s prime minister Mahathir Mohammad. “There is a feeling in Washington that anything that is not American cannot be right.”
There was also other criticism of the US. Horst Kohler, managing director of the IMF, rebuked it for many trade policies based on protectionism. US senator Patrick Leahy scolded his colleagues in Congress for giving too much foreign aid to Israel, and said that too little aid flows to the neediest. “I’ve been critical of the aid we’ve given to Israel,” Leahy said, before adding: “But the same complaint could be made of a number of wealthy Muslim countries. They’re not giving aid to the poorest of their own people.”
The Middle East and Northern Ireland also took centre stage in discussions. King Abdullah II of Jordan told a plenary session of the forum that “the present situation in the Palestinian areas is very dangerous and requires immediate international intervention to help steer the parties from the brink,” arguing that the “burning injustice of Palestine” had “fed extremism around the world.” Israeli foreign minister Shimon Peres fell back on rhetoric: “I believe that despite all the very pessimistic views, there is also a ray of hope.” He added that a final settlement could be reached on the most contentious issues of borders, refugees, settlements and Jerusalem. “The plan we are now discussing is stop the war, then recognize immediately the establishment of a Palestinian state,” Peres said, but added that Palestinian Authority chairman Yasser Arafat must first stop “suicide” attacks on Israelis.
Now that the luxury limousines and jets have whisked the participants back to their lavish offices and mansions, it remains to be seen whether they can muster the will to turn their words into action. Otherwise the World Economic Forum will have been merely another annual talking-shop of business bigwigs and political potentates.