Davos conference aims to carve new capitalist path for world economy

By Chris Otton

DAVOS, Switzerland–The world’s political and business elite will shelter from the chill winds buffeting the global economy and plot a new path for capitalism at the annual Davos forum which begins Wednesday. Some 40 heads of government will rub shoulders over the next five days in the Swiss Alps with titans of commerce and industry to discuss everything from the eurozone crisis to Iran’s nuclear program as well as trends in science and the arts. German Chancellor Angela Merkel will deliver the keynote address on Wednesday while fellow G-20 leaders such as British Prime Minister David Cameron and his Canadian counterpart Stephen Harper will also address delegates later in the week. They will be joined by a new generation of premiers from countries such as Tunisia and Thailand which are trying to emerge from periods of turmoil as well as African heads of state including Nigeria’s Goodluck Jonathan as his country grapples with an intensifying Islamist insurgency. But it is the title of the debates which catches the eye as much as the participants with the first posing the question: “Is 20th Century Capitalism Failing 21st Century Society?” Other discussions scheduled include “Fixing Capitalism,” ‘Has Globalization Reached its Economic and Political Limits?’ and ‘How Will the Eurozone Countries Emerge from the Eurozone Crisis?’ While U.S. Treasury Secretary Timothy Geithner will ponder the challenges for the U.S. economy, a sizeable contingent from emerging powers including India and South-east Asian nations will consider the theme: “Is this truly the Asian century?” Noticeable by their absence however are leaders from eurozone laggards Greece, Spain and Italy. There is also a low-key turnout from Russia in an election year and the Chinese are busy celebrating the lunar new year.

But if austerity measures are forcing some to stay away, leaders from the biggest 1,000 companies are here in force, despite the annual membership fee of 35,000 euros (US$45,000). According to Klaus Schwab, the founder and organizer of Davos, this year’s meeting will focus on how to develop a new world model as “capitalism in its current form, has no place in the world around us.” “The danger for the world is that the political leadership is overwhelmed,” Schwab said on Tuesday evening as he welcomed delegates. “Maybe what we have here is a kind of burnout,” added Schwab who founded the forum 42 years ago. A major survey released on the eve of the summit highlighted how business leaders have little faith in politicians turning things around in the immediate future. A survey of 1,258 bosses by accountancy firm PricewaterhouseCoopers, timed to coincide with the World Economic Forum of the global business elite, found 48 percent expect economic decline and only 15 percent growth this year. European business leaders were the most pessimistic, amid fears governments are not up to the task of resolving their debt crises and concerns about the stability of capital markets, the firm said at the ski-resort summit. “CEO confidence is decidedly down as they deal with the aftershocks to the recession,” said Dennis Nally, chairman of PwC International. “CEOs are disappointed with the course of the global economy and the pace of recovery. The optimism that had been building cautiously since 2008 has begun to recede.” Some 5,000 Swiss soldiers have been mobilized to provide security over the course of the gathering while the airspace over a resort favored by the jetset has been severely restricted. A small group of anti-capitalist activists have made their way to Davos, building a protest igloo. They are not joining in the discussions.