The World Economic Forum in Davos – 2015

Strategic Culture
by Valentin KATASONOV

The World Economic Forum (WEF) is an independent international organization committed to improving the state of the world by engaging business, political, academic, and other leaders of society to shape global, regional and industry agendas. The Forum is best known for its annual winter meeting in Davos, a mountain resort in Graubünden located in the eastern Alps region of Switzerland. The organization also convenes some six to eight regional meetings each year. This year its annual winter meeting kicks off on January 21. 

The Forum was founded in 1971 by Klaus Schwab, a German-born business professor at the University of Geneva. At first the meetings were limited by West European participation and concentrated on European global economic strategy and tactics. Those were not the best days for Europe: the Breton Woods monetary management started to hit snags on the way, the dollar-pegged fixed exchange rates or par-value system was nearing its end and the European currencies started to float. The dollar was clearly on the way to become stronger (as was stated during the 1976 meeting of the Interim Committee of the Board of Governors of the International Monetary Fund in Kingston, Jamaica).

Initially the meetings were called European Management Symposiums. As years went by the participation broadened. Since 1987 the annual events are called the World Economic Forums. It’s not about the meeting only. Since 1976 the Forum functions as a permanently functioning non-government organization engaging business circles from all over the world. Today it brings together around 1000 companies from different countries, including around 20 business organizations from Russia. The Forum has its own hierarchy with «strategic partners» (Institutional and/or Knowledge Partners) more tightly tied to the WEF than mere members and charged a hefty fee ($250 thousand) for their institutional commitment. The list includes 34 transnational corporations (Microsoft, Sun Microsystems, Coca-Cola, Nestle etc.). There is another category – the Annual Meeting Partners (who co-sponsor the annual event) who pay $78,000 to the WEF Foundation in addition to the $12,500 annual membership dues and $6,250 annual meeting fees. These privileged partners enjoy wider participation. Others pay $20 thousand membership fee to take part in all sessions of the Forum. All participants are responsible for their daily expenses. They bring great profit to the small Swiss town. 

The regional meetings have a global reach to include Europe, Eurasia, America, Africa, and the competitive economies of the Arab world, China, East Asia, India and Latin America. The goal is to bring together the world business, political and intellectual elite. The Bilderberg Club and the Trilateral Commission hold meetings behind closed doors and have very limited participation (sometimes they even try to classify the lists of participants). The WEF has the reputation of «democratic» organization – a platform open for discussions. First, the WEF membership is offered to large companies and organizations with adequate ratings ready to pay membership fees and share the goals and principles of the Forum (no matter how blur they may be). Second, the Davos events are far from being closed. To the contrary, they are publicized to catch the attention of many millions from around the world. The WEF meetings are strictly informal – no binding decisions are taken. The priority is given to live chat, the exchange of opinions and «brain attacks». 

Political leaders soon began to use the annual meeting as a neutral platform. Experts and journalists say some ideas put forward during the informal meetings were subsequently brought into life to significantly influence the situation in the world. For instance, the first contacts between the West and Communist China were established at the Davos Forum. The idea of transforming the General Agreement on Tariffs and Trade into the World Trade Organization was allegedly first made public at Davos. In 1993 the globalization of world economy dominated the agenda. In 1988 prime ministers of Turkey and Greece agreed that the negotiations over Cyprus should remain the purview of the United Nations. They signed the «Davos Declaration» to keep them away from the brink of war. Davos was the place of first ministerial meetings between South and North Koreas (1989). At the same meeting, East German Prime Minister Hans Modrow and German Chancellor Helmut Kohl met to discuss German reunification. It was the place of first meetings between the representatives of North Vietnam and South Vietnam. Israeli Prime Minister Shimon Peres and Prime Minister of Israel and the leader of the Palestine Liberation Organization Yasser Arafat reached a draft agreement on Gaza and Jericho (1994). The list of memorable events can be continued. 

Davos is the platform of discussions on new multi-billion business projects though the deals are kept away from public attention. 

The 45 year-old Forum’s organizational structure has become complicated enough to be called a «parallel» or «informal» United Nations Organization. The Foundation Board is the highest governing body (headed by Klaus Martin Schwab). The WEF managing board runs the organization on daily basis. There are a number of agenda councils, academic networks, business clubs and non-government organizations. Mayors of large cities (megapolises), religious leaders and experts are also among participants. The organization includes three centres: the Centre for the Global Agenda, Centre for Global Industries the Centre for Regional Strategies. The WEF’s International Business Council acts both as a community addressing globally relevant business issues and as an advisory body providing intellectual stewardship to the WEF. It includes 100 CEOs of leading transnational corporations. 

The WEF pays special attention to studying the competitivity of national economies. The world-renowned Global Competitiveness Report has been published annually for many years. Global Agenda (former bi-monthly World Link) is the edition published by WEF is a companion publication to Davos given to attendees at the forum or available by subscription to others. 

The Forum appears to be democratic from outside but its activities are more and more questioned every year. More often it comes under harsh criticism. Experts remember that the WEF generated the ideas of economic globalization to meet the interests of transnational corporations. The critical remarks are made on different aspects of the Forum’s activities. First, the organization remains to be a closed club. Second, it’s not clear how the calculations are made to estimate the ratings of national economies. The Forum downgrades the ratings of some countries to make their companies victims of «rating» arbitrariness. 

The Russia’s contacts with the Davos Forum go back to the Gorbachev times. The Chairman of the Council of Ministers of the USSR Nikolay Ryzhkov became the first high-ranking domestic politician who took part in the Davos forum. In 1986 he addressed its participants via direct TV bridge. German Foreign Minister Hans Dietrich Gensher spoke at the Forum calling to support Mikhail Gorbachev: “Gorbachev must be taken seriously. Don’t miss your historical chance!” The chance was given to finally make the West win the Cold War with the Soviet Union. 

In the recent years before its dismemberment the USSR started to take part in the Davos Forum activities. The Russian Federation took over. In 2009 the Russian team was headed by the then Prime Minister Vladimir Putin. In 2013 the Russian delegation was led by Prime Minister Dmitry Medvedev. The feeling of fatigue starts to tell. The parties seem to get a bit «tired» of each other. The West wanted Russian to drastically improve its investment climate. It has not happened. Russia expected the status of favored nation when it comes to investments, trade and financial cooperation. The hopes have been dashed. As a result, the Russian delegation was led by an official in rank of Deputy Prime Minister. 

In 2015 the Russian delegation is led by Igor Shuvalov, First Deputy Prime Minister of the Russian Federation, includes Deputy Prime Minister Arkady Dvorkovich, Alexei of Ulyukayev, Minister Economic Development of the Russian Federation, Minister of Finance Anton Siluanov and Rustam Minnikhanov, the President of Tatarstan. Dvorkovich and Shuvalov are the only ones to speak at the sessions. Dvorkovich will take part in three sessions, one of which will be dedicated to the global market’s volatility as a new economic norm. The Deputy Prime Minister will also take part in discussions on energy problems and on the new economic architecture of the Eurasian continent. Shuvalov will attend an event organized by Russia’s Sberbank and take part in the Forum’s Russian session (the Russia Outlook) to be attended by head of VTB bank Andrey Kostin and former Finance Minister Alexei Kudrin. According to the Forum’s program, the list of Russian participants also includes: Kirill Dmitriev, the CEO of the Russian Direct Investment Fund (the Geo-Economics of Energy), Oleg Deripaska, the Chairman of the Supervisory Board of Basic Element Company, President of En+Group and United Company RUSAL, the largest aluminium company in the world (Regions in Transformation: Eurasia), Evgeniy Kaspersky, the founder and head of the global IT company Kaspersky Lab (the session devoted to cyber threats) and Rabbi Goldschmidt, the spiritual leader of the Moscow Choral Synagogue, the head of the rabbinical court of the Commonwealth of Independent States, President of the Conference of European Rabbis and an officer of Russian Jewish Congress (the 21st Century Ideologies). AFK Sistema Chairman Vladimir Evtushenkov released from the three months-long house arrest on December 17 will also take part. 

Davos-2015 will probably be the most difficult WEF meeting for Russia. It can be the last one. The romance that has lasted between Russia and the West for more than twenty years is over.

Strategic Culture