Redefining Davos

Cautious relief was marked in the World Economic Forum meet at Davos this year, with a sense of need to project future global challenges

by IKRAM SEHGAL

The disastrous aftermath of the massive economic downturn in 2008 envisaged widespread political upheaval, that did not take place and the world’s leading economies are growing again. What had haunted the minds of the world’s elite in 2009 was manifest in the cautious but visible relief among the participants of WEF Annual Meeting 2010.

This year’s theme being “Improve the State of the World: Rethink, Redesign, Rebuild”, the WEF objectives were, viz (1) create values framework (2) strengthen economic and social welfare (3) mitigate global risks and address systemic failure (4) ensure sustainability (5) enhance security and (6) build effective institutions.  In November 2009, WEF Global Agenda Councils (GAC) engaged in Dubai in a multi-stakeholder dialogue to adapt structures and systems of International cooperation to 21st century challenges.

The pervasive apprehension remains that economic disaster was not fully averted, Nik Gowing’s BBC World Debate brought out in stark relief another possible recession, a “double dip”, in the coming year.   Massive stimuli could slow down for lack of funds as resources dry up.  Conversely the continuing stimuli could produce another speculative bubble.  Historical statistics are pessimistic, massive unemployment followed the 1929 crash three years later in 1932. On the bright side, Oct-Dec 2009 US quarterly growth rates were the best since 2003.

Before the world recession the buzzword was “globalization”, now believed an unstable system prone to political tensions and financial turmoil thereof.  Using his Plenary Address to attack the “globalization” concept, French President Sarkozy pushed for a new Bretton Woods-type agreement (1948 post-World War II) to regulate the world financial system.  Speakers argued that nations must not adopt a go-it-alone policy, coordinated policy responses were essential. FT’s Martin Wolf put the obvious questions, viz (1) has the world economy really come out of the crisis?  (2) the biggest economic challenges ahead and (3) lessons we should learn from this disaster?   To ward off financial apocalypse, the US led the world in putting the balance sheet of the State at the disposal of the financial system, fiscal deficits never seen before in history opened up, highest deficits happening where the private sector was hit directly because of the bursting of asset bubbles and consequent financial collapse. 

Coinciding with Davos, US President Obama’s State of the Union message emphasized tighter regulating of banks while cutting down their size, enacting laws to prevent free-wheeling speculation leading to another recession. Central European Bank Head Crichet gave the US policy crafted by former World Bank Head Paul Volker qualified support.   UK’s bankers (Standard Chartered, HSBC, Barclays) dismissed the concept of “smaller” banks. They were not in sync with their own policy makers, supporting Obama’s proposals, Lord Mervyn King, Head of the Bank of England, recommended carving up international banks and large pay cuts. 

Missing from Davos were the usual celebrity star attractions like Naomi Campbell, Michael Douglas, Brad Pitt, Angelina Jolie, etc. California Governor Arnold Schwarzenegger was there, James Cameron’s Session in a cinema theater explaining his hit movie “Avatar” was a major draw.  Former US President Bill Clinton’s star appeal is undiminished, eloquently appealing for humanitarian assistance for Haiti.   The session on “Global Governance Redesigned” had six Heads of State and Government, viz Presidents Felipe Calderón of Mexico, Lee Myung-Bak of South Korea and South Africa’s Jacob Zuma, PMs Paul Harper of Canada, José Luis Rodríguez Zapatero of Spain and Vietnam’s Nguyen Tan Dung. Paul Harper summarized best that every nation has its own national interests, these may be in conflict with the world interest.  Instead of forcing them to come into line, world understanding should narrow down gaps to gain consensus.

NDTV show-cased India’s economic success, holding a live TV debate for the first time with 271 participants in a room accommodating 288, among them 237 Indians.  India was represented by four ministers alongwith six Ambassadors from the EU Region.  There is new found maturity in India’s approach, for a change there was no Pakistan-bashing, or for that matter Pakistan-baiting.  Nevertheless glib rhetoric still glosses over the realities of their arrogance with neighbouring countries.  Panelist Habib Bank President Zakir Mahmood made Pakistan proud by his measured and deliberate responses.   The internal threat posed made no mention of India’s homegrown terrorists like the Naxalites across the country. There was visible Indian satisfaction on being bracketed with China rather than being straitjacketed in the India-Pakistan context. 

Top universities like Harvard, MIT, Stanford, etc ran “Ideas Labs”, participants debating the world’s current subjects of deep concern eg security, public, health, governance, nuclear non-proliferation, etc and in a university classroom format developing substantive ideas.  The outstanding Session on “Population Growth” was conducted by brilliant and committed Harvard Professor David Bloom.  Terrorism and nuclear potential having a dangerous nexus in Pakistan, IISS Head John Chipman moderated a Session in which I participated, proposing fasttracking Pakistan out of the nuclear cold, giving it access India-like to nuclear material and fuel through legitimate sources, and thus eliminating Pakistan’s need to go to the netherworld of the nuclear blackmarket. Geneva Defence Minister Zu Guttenberg and former Australian Foreign Minister Gareth Evans participated with me during a live German and Swiss TV discussion moderated by famous TV Swiss compere Romaine Jean in an “Open Forum”.

The Session on Afghanistan had no Pakistan participation since no Pakistani senior official was present.   Afghan’s Ashraf Ghani could not avoid the snide Pakistan comment, British Foreign Minister David Miliband forcefully brushed it aside, acknowledging publicly my suggestion that not enough was being done despite Pakistan’s central role. The US, EU, China and other developed countries had to exponentially increase adequate economic and security assistance, swiftly and abundantly.  He considered it incongruous that 30000 US soldiers in the “military surge” alone would cost US$1 million per soldier ie US$ 30 billion per year, whereas Pakistan would get only US$ 1.5 billion economic aid through the Kerry-Lugar Bill (US$ 1.2 billion in additional military support funds for Pakistan in 2010 was announced two days later). 

Vice Premier Li Kiqiang of China was there, alongwith Greek PM Papandreou and dozens of other Heads of State and government.  Pakistani PM Gilani got positive vibes for Pakistan in 2009 by networking with govt and business leaders. With both the President and the PM absent, my traditional “Pakistan Breakfast” was missed by WEF participants, the first time the Pakistan-specific event attended every year by an average of 300 participants at 7:30 in the morning despite snowstorms did not take place in seven years. This time even the official Pakistani delegation was missing from the WEF Congress Center, not even at Ambassadorial level.

Pakistani entrepreneurs in Davos, Arif Naqvi, Zakir Mahmood, Hussain Dawood and PSO’s Irfan Qureshi held the fort.  With five of us matched against 100 plus of India powerful economic elite, a 20:1 ratio was fair odds, we acquitted ourselves reasonably well. Arif Naqvi and Hussain Dawood were outstanding in their respective panels on industry and corruption, Arif is now clearly acknowledged a world entrepreneur par excellence. With Andre Schneider and his team re-inventing Davos to reflect future world challenges, we should encourage more Pakistani businessmen going to Davos, Presidential or PM-level presence would give Pakistan enormous dividends, not only economically but politically, from a “Redefined Davos”.