Global Policy Forum

Economic Forum Confronts "Schizophrenic World"


By D. Ravi Kanth

Inter Press Service
January 24, 2007

The high-profile Davos meeting of the international political, business, economic and academic elite began Wednesday on the sombre note that globalisation is facing major threats due to worsening climate change, growing income disparities, escalating barriers to movement of people, and global political and economic instability.

"We are living in a schizophrenic world," Klaus Schwab, founder and chief executive of the World Economic Forum (WEF) told journalists at the inaugural press conference, arguing "there are so many underlying imbalances, fragilities, and inconsistencies" that need to be addressed on a war footing if the world has to be made a safe place. He said there are 23 risks that are posing a major challenge to globalisation, especially climate change and the stalemate in global trade negotiations. The situation in the Middle East is another major problem that needs to be addressed on a firm footing, he suggested, indicating that Davos is the best platform that can set the stage for arriving at appropriate answers on these global risks.

The central theme of this year's meeting is "shifting power equations", that aims to grapple with the ongoing changes in the world. The Davos meeting, which is invariably identified with the super rich that made huge gains from globalisation since 1991, has attracted almost 2,400 participants this year. The list of participants reads like the international who's who in global business and politics. It includes 24 heads of government including German Chancellor Angela Merkel, British Prime Minister Tony Blair, President Lula da Silva of Brazil and South African President Thabo Mbeki. Top chief executive officers of the Fortune 500 companies and an assorted mix of academics, social activists and religious representatives have turned up to discuss the burning issues of the day – but from a perspective of the established order.

Some 223 sessions will discuss a range of issues. The list sounds like a "dog's dinner", said one media analyst, arguing that she is somewhat baffled by the range of issues that are discussed, and the conclusions reached year after year.

Climate change tops the list of issues at this year's meeting, with Schwab stressing for concerted action at various levels, but there is no consensus among the world's CEOs on how to address this issue. The consultancy firm PricewaterhouseCoopers released a study Tuesday which showed that 31 percent of CEOs are "not at all concerned" about global warming and climate change while 28 percent are "not very concerned." The study showed that only 14 percent are "extremely concerned" about climate change while 26 percent are "somewhat concerned." If this is what companies think about climate change, it is not clear what impact the Davos meeting can make on this issue, said an Asian business representative, arguing that the focus on climate change is constantly shifting to emerging economies, particularly China and India. India's top telecom magnate Sunil Bharti Mittal told IPS that his country is ready to engage in the debate on climate change and even willing to consider some commitments provided there is uninterrupted access to nuclear fuel and state-of-the-art technologies that can drastically reduce carbon emissions.

With the United States President George W. Bush having finally spoken on "global climate change" in his state of union speech Tuesday, analysts here believe that Washington will no longer be part of the problem on this burning issue. Any post-Kyoto protocol agreement is now expected to see active U.S. engagement.

Aside from climate change, rising income disparities both in rich and poor countries came to the centre stage on the first day during various sessions on the threats to globalisation. "We are witnessing threats to globalisation, escalating fears about increasing dislocation, and a return to a degree of protectionism," warned Coca-Cola chief E Neville Isdell. He is worried that the train of globalisation is being removed from the rails because of these threats.

Ernesto Zedillo, director of the Yale Centre of Globalisation, said at one session that the threat for globalisation is coming not from China and India that have become global centres for manufacturing and services respectively, but from the very powerful industrialised countries which are closing their doors for the movement of people, or access to technologies.

Sunil Bharti Mittal, who is launching a joint venture with Walmart in India, expressed sharp concern that the doors for international migration and short-term movement of skilled personnel are closed in rich countries. He argued that the world, especially countries in North America and Europe, have to adapt to India's people of "global talent", suggesting that skilled personnel in India must be allowed short-term movement given the shortage of skilled personnel in the rich countries. If there is no access to easy movement of skilled personnel from India, the Indian government must not open its market to farm products from the West, Mittal suggested.

The Davos meeting on the first day seemed like a talk festival of the rich on the perceived threats to globalisation. But it was unable to present what an analyst called "out of box" answers that would require some radical rethinking.

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