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28 January 2002

Where the elite preens itself

The World Economic Forum or Davos (actually it's held in New York this year) brings together the wor

By Jenni Russell

“You’re off to the World Economic Forum?” asked the Oxford economist, enviously. “How very impressive. They’ve never invited me.”

Three days later, I queued in the snow outside the conference centre in Davos, standing behind mink coats and cashmere overcoats, watched over by Swiss policemen with machine-guns. “Reporting press? You can’t come in here. Side entrance, please.” I stood in line again, this time behind Puffa jackets and Newsweek journalists, waiting to collect my orange badge. Once inside, I found that the seminar I wanted to go to was being held in a half-empty room. “You can’t sit here. All seats are reserved for white badges. Coloured badges have to stand.”

An acquaintance invited me to a dinner he was hosting: “There are people I’d like you to meet.” The green-badged Forum employee stopped me at the door. “This is a participants’ dinner. Orange badges are not allowed.” Then, later, reluctantly: “If you’re coming in, please can you turn your badge around? Diners may be upset if they see you’re a colour.”

“Why does anyone put up with being treated like an epsilon?” I asked a Financial Times correspondent. “Because we all live in hope of becoming white badges,” he said. “Then we’ll know what’s really going on.”

A leading British businessman was wearing a white badge, but it bore a small logo on the top left-hand corner: GLT. “What’s a GLT?” I asked.

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“Ah,” he said, “well, it’s a Davos club. I’m a Global Leader for Tomorrow.”

“That sounds very important,” I said. “Yes,” he said, “I thought so myself, until I bumped into the man who’d sponsored me, on the way to my first meeting. I asked him if he was coming, and he said, ‘Oh no, dear boy, I don’t bother with that any longer. I’m not a GLT any more, I’m an IGWEL.’ ‘What’s an IGWEL?’ I asked him. ‘A member of the Informal Group of World Economic Leaders of Today.’ “

The World Economic Forum has employed a simple psychological truth – that nothing is more desirable than that which excludes us – to brilliant effect. Year after year, its participants apply to return, in the hope that this time they’ll be a little closer to the real elite. Next year, they, too, might be invited to the private receptions for Bill Clinton, Kofi Annan or Bill Gates, instead of having to stand on the conference centre’s steps like teenage rock fans.

It’s the sheer concentration of individuals in possession of power, wealth or knowledge that makes the privately run Forum so desirable to its participants. The thousand chief executives who attend its annual meeting control, between them, more than 70 per cent of international trade. Every year, they are joined by a couple of dozen presidents and prime ministers, by senior journalists, a changing selection of leading thinkers, academics and diplomats, and by rising stars of the business world. Access to the meeting is by invitation only, costs several thousand pounds a time for business participants, and is ruthlessly controlled.

The Forum prides itself on being not just high-powered, but high-minded – dedicated to finding solutions to global problems, identifying trends, encouraging corporate responsibility and extending the benefits of capitalism worldwide. Its critics would describe it in more brutal terms – as a group dedicated to keeping the world safe for big business, no matter what the cost.

For 30 years, the Forum has met in the Swiss mountain resort of Davos, where it began. This year, it will be different. The annual meeting is to take place at the Waldorf Astoria Hotel in New York at the start of February. Klaus Schwab, its founder, says that moving this year’s meeting is a gesture of support for a city traumatised by terrorism. Cynics suspect other motives, largely to do with the Americans’ current reluctance to leave their shores. Security is another issue. Last year, the meeting was under siege by anti-globalisation protesters; snowball-throwers in woolly hats were met by Swiss police firing water cannons. This year, the potential threats are thought to be altogether more serious.

Within the conference itself, the issue of how to respond to the newly dangerous world will dominate the official programme. Schwab has said that the meeting must be more than a talking shop: he wants it to come up with solutions. There’s no doubting his earnestness. The programme is studded with sessions on how to deal with fundamentalism, bridge religious divisions, respect differences and reduce poverty. Yet, considering its record over the past few years, it will be a surprise if the Forum comes up with any original conclusions, or any inspired forward thinking. Despite its impressive invitation list, its intoxicating range of subjects for discussion and its enormous self-importance, the organisation has proved surprisingly poor at foreseeing both problems and opportunities.

In 1998, Davos staged a handful of sober sessions on the catastrophic collapse of the Asian economies. No one predicted that, over the next year, the financial turbulence would deepen and spread, causing Russia to implode, and driving stock markets down worldwide. The following year’s meeting failed to spot the impending dotcom boom, and, to compensate, 2000’s programme was stuffed with internet entrepreneurs in open-necked shirts, holding oversubscribed seminars on how you, too, could make millions in months. Nothing said by the Forum indicated that this was a bubble, which was to burst within three months.

At one of the first dinners I attended in Davos, the charming businessman next to me had risen the minute coffee was served. “Excuse me – I must just catch the president of Ghana,” he said. Twenty-five minutes later, he was back. “Did you speak to Rawlings?” I asked. “Too much of a crowd,” he said. “But I caught the president of Kazakhstan. He invited me to open one of my businesses there. I think I will. There are, oh, two hundred thousand individuals there with a net worth in excess of a hundred grand.”

“Is this why you come?” I asked. “Yes. The contacts you make here are invaluable. When I want to see him, I’ll call his private secretary, say we met at Davos, and I’ll go straight through . . . I do a deal a year at Davos. It’s worth half a million a time to me.”

Other participants don’t even bother with the formal schedule. Skiing alone through the woods on the cross-country trail one lunchtime, I was overtaken by an American banker, in charge of lending millions to the rest of the world. He’d been chauffeur- driven from Geneva directly to the ski shop. He worked for Goldman Sachs. Was he going to the afternoon sessions? “Naw.” Why not? “I look at it this way. Subject I know about, I guess I know more about it than anyone else in the room. Subject I don’t know about – say, the brain – I think, well, do I need this? And the answer’s no. So I don’t waste my time.”

The gulf between the values the Forum professes and what it actually does depresses and bewilders one contingent at the annual meeting: the representatives of the poorest countries in the world. They are excluded from the deal-making by sheer lack of resources, and they find the Forum hypocritical and ineffective, even when it comes to upholding its own most fundamental belief – that of free trade.

Four years ago, President Museveni of Uganda came to Davos to lobby for a change in the terms of trade. Most heads of state were staying in five-star hotels; Museveni and his entourage could afford only a small, bare flat on the edge of town. He made an impassioned speech asking why, when Kampala was filled with imported Japanese cars, he couldn’t reciprocate by selling Uganda’s beef to Japan. We don’t want aid, he said. We keep being told we must accept free trade, but it’s all one way: we aren’t allowed to export food and textiles into protected western markets. We don’t want dependence. We want opportunities.

I asked him whether he thought his lobbying would be successful. “I don’t know,” he said, sounding troubled. These were, he said, the most powerful people in the world. He had hoped they would support his case once they had heard it.

Campaigners have been puzzled at the lack of any effective response to their pleas. Every year, the Forum restates its commitment to the ideals of free trade, and yet the companies supporting the declaration include some of the most protectionist in the world. What they fail to recognise is that Davos can make no concessions, offer no compromises. It is not a negotiating body, like the World Trade Organisation. It cannot make promises on behalf of nation states. It has no leverage over the companies that attend. There is no necessary connection between its flowery resolutions and any activity, because no mechanism for that exists.

The irony is that, for a body so dedicated to identifying and associating with power, the Forum has none of its own. It simply offers a platform on which the elite can parade, talk and listen, thrilled by their proximity to one another. Even its futurology is unreliable. When the sonorous conclusions are issued in New York early next month, it will be worth remembering how little it all means.

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