It’s Davos time again! The five-day global-elite’s festival of self-importance has kicked-off in luxurious fashion at the ski resort in Switzerland; the rich and powerful are again competing for public and media attention as they toast their good intentions. But this year, is the fat-cat backlash coming?
Established back in 1971 as a not-for-profit foundation, and headquartered in Geneva, the World Economic Forum has, as its mission statement, “to improve the state of the world”; it characterises itself as “independent, impartial and not tied to any special interests”.
Right now, though, it feels like that motivation is rather misplaced: wouldn’t it be far more useful for the state of the world to have an organisation that promoted the special interests of the majority of its inhabitants?
In order to talk ‘mission’, every year, about 3,000 participants “from every sphere of influence: business, government, civil society, academia, arts and culture, and media” descend upon Davos “to discuss how to build a better version of globalisation”. Interestingly, equitable participation isn’t a hallmark of that better version. Just one in five participants are women. The best represented regions are the ones with the largest share of global wealth and power, notably; Western Europe, North America and Asia.
The WEF gives no breakdown of the individual, organisational or collective corporate wealth of their participants. But, then, to do so might only highlight the extent of a purpose-defeating disparity. For Davos is where the wealthy and powerful gather to talk about everyone else. And, as Oxfam International’s latest report notes, the top 26 billionaires on the planet have stockpiled riches equal to that of the poorest 3.8 billion people combined. In contrast to the wealth increase for the tip-top of the financial food chain – the number of global billionaires has doubled since the 2008 financial crisis – the wealth of the world’s poorest citizens dropped by 11% last year.
Indeed, though the snow up in the Alps is bright and sparkly, and the alcohol top-shelf, the economy beyond the ski slopes and fancy chalets is one of gathering clouds. While, last year, attendees were fairly enthusiastic about the global economic outlook and their political fortunes – this year, not so much.
Davos, of course, will maintain the status quo of pomp and circumstance despite the political turmoil surrounding Brexit, the bi-partisan hostility infusing the US government shutdown, the uncertainty of upcoming EU elections, and the looming global economic slowdown. Its tone-deafness, though, will be starker than usual.
World leaders such as the German Chancellor, Angela Merkel, Brazil’s new president, Jair Bolsonaro, and the Chinese Vice President, Wang Qishan, will be in attendance, clapping each other on the back. They will hobnob with business luminaries such as Microsoft co-founder Bill Gates and JPMorgan Chase & Co. Jaime Dimon, of JPMorgan, will be there – even though his firm, the largest bank in the US, missed analysts’ fourth quarter earnings expectations and is predicting more trouble for the economy ahead. (It was subsidised by a government bailout, cheap rates courtesy of the Federal Reserve, and lawyers that are adept at settling fraud-related investigation penalties.)
There is, however, a growing list of non-attendees. These include President Trump and, as of last week, mindful of the federal shutdown and how it would look if they were to turn up to the Swiss shindig, the rest of his delegation. Theresa May and the French President, Emmanuel Macron are also mired in problems in their own nations and know that no amount of Davos discussion can solve them.
It’s all a rather different scenario from last year, when, in his keynote speech, Trump declared: “To be successful, it is not enough to invest in our economy – we must invest in OUR PEOPLE.” He also said: AMERICA IS OPEN FOR BUSINESS AND WE ARE COMPETITIVE ONCE AGAIN.” (Those capitals are courtesy of the WEF’s website transcript of President Trump’s 2018 address.)
These words ring rather hollow today: under Trump’s direction, using a loophole that enabled him to bypass congressional approval under the guise of national security, the White House went on to slap a host of tariffs on US trade partners that has sent the global economy further into a tailspin. In addition, the US government has been shut down for nearly five weeks, as the President and the Democratic party duke it out over a $5.7 billion stalemate regarding a wall between the US and Mexico, shirking responsibility to pay federal workers in the meantime.
But it’s not just America. So much else has become less secure in the world. Last year, Macron delivered an hour-long overture, shaped as an ode to France’s resurrection. It was met by a standing ovation. This year, following the gilets jaunes rebellion in the streets of Paris, his popularity continues to dive.
A year ago, Theresa May was skating on dangerously thin Brexit ice, with people deserting the hall before she’d finished her speech. This year, she’s crashing through it. What point Switzerland?
Meanwhile, economic growth everywhere is declining. Original European Central Bank forecasts for Eurozone economic growth in 2018 were at 2.4%, but now the World Bank says that growth slowed to 1.9% in 2018 and that it will decline to 1.6% in 2019. We are all dealing with a less certain year ahead.
So at what point will the Davos mob realise that their stated aspirations and world-improving diatribes are nothing more than posturing in the face of their own shortcomings?
Part of the problem is that it’s not only empty posturing. There’s also powerplay afoot. Most of the WEF’s funding flows from the world’s most elite businesses. These multinational corporations can join as members or partners depending on how much they are willing to shell out. Fees range from about £50,000 to £500,000. Most of them include a seat at Davos for the CEO, but there’s an extra fee thrown in for Davos participation.
The companies on that rarefied guestlist have no problem paying exorbitant fees. They include Goldman Sachs, Deutsche Bank, Citigroup, and HSBC holdings – banks which have been recipients of the taxpayer and central bank largesse, despite engaging in such nefarious business practices as money laundering, rigging markets and committing fraud.
But these corporate fees that underwrite the non-business participants, the ones who can’t afford the hefty price for access that include leaders from civil society, the arts, young global leaders, media leaders, and technically, the heads of state and ministers. And it is here that the Davos ethos really does come unstuck: if corporations are paying for public leaders to attend, then the power relationship is clearly skewed in their favour.
If these gilded elites truly wanted to change the world, they might start by realising that the world is rightly sceptical of all that they do. It’s pointless suggesting they might fly economy and sit in the audience while real people discuss the state of their world – but that would be more in line with the stated intentions of Davos. Or at least, it might inject a little more honesty into events and give it a relevance it is so sorely lacking.