With the global financial crisis dominating the headlines for the past few months, it comes as no surprise that the World Economic Forum, which opens Wednesday in the Swiss alpine village of Davos, will be devoted to finding ways to try to solve the crisis. This year, organisers of the event, which is usually replete with receptions and cocktails featuring business and political luminaries, must be mindful of the economic climate.
While the number of heads of state attending the conference this year is almost double that of last year, fewer business leaders are expected to participate in the five-day conference. Russian Prime Minister Vladimir Putin will open the meeting, which will be attended by Chinese Premier Wen Jiabao, German Chancellor Angela Merkel as well as British Prime Minister Gordon Brown among others. One notable absence is US President Barack Obama, who will be represented by senior White House aide, Valerie Jarrett.
With the conference opening just two days after the collapse of the Icelandic government following its perceived mishandling of the nation’s financial crisis, this year’s meeting looks set to focus on political leaders as the global economic crisis threatens to affect governments across the world.
Iceland is not on the agenda of the 40-year-old conference, whose overall theme is “Shaping the post-crisis world".
Speaking to FRANCE 24, Geoffrey Wood from the London-based Cass Business School said it would be a waste of a conference if Iceland were not on the agenda. “Iceland raises an interesting question", he said. “Who should be responsible for a bank when it fails? Had we been informed that when an Iceland bank defaulted, the only available resources would be Icelandic government tax reserves, people would have thought much more carefully about using an Icelandic bank. At the moment there is no clear statement about who is responsible for which bank.”
Wood feels that only at an international level could another Iceland be prevented. “Most banks are international when they’re alive, but who looks after them after they’re dead?”
‘A salon of vanity’
Since it was set up in 1971, the World Economic Forum has attracted criticism from anti-globalisation activists as well as experts who question whether the gathering of business and political elites actually achieves its primary goal, which is encapsulated in its motto, "entrepreneurship in the global public interest".
While critics view Davos as a symbol of flamboyant capitalism, organizers this year hope the forum will be able to address the global economic crisis. But Markus Kerber of the Berlin-based Technische Universität is sceptical about the summit's ability to address the crisis. "Davos is a salon of vanity, nothing more," he said. "Davos has never offered any solutions or new approaches. They don't question anything, especially not IMF politics, or the politics of world banks."
According to Eamon Butler, director of the Adam Smith Institute in London, the real work at Davos is done behind the scenes. “The [Davos] agenda is not so important. Most of the work is outside the conference hall, to keep it not reported, off the record", said Butler.
What’s more, according to Butler, different people attend the conference for different reasons. Politicians, suggested Butler, will go “to meet other politicians” to compare notes. But at Davos, politicians also try to make important contacts with business leaders, “because business people know more about what’s going on than political officials", said Butler.
This year, about 1,400 business executives are expected to be at Davos. Many of them might be spending their time at Davos justifying the need for financial bailouts to the politicians.
That said, says Butler, one must not expect too much. “It’s not like the UN Security Council. The Security Council decides things. The Davos conference doesn’t.” In fact, Butler says Davos this year will be “business as usual", except that “there will be a lot of small countries irritated by big ones”.