Don’t expect much from WEF in Davos

By Satur C. Ocampo
At Ground Level | The Philippine Star

Last Thursday (Jan. 24), President Aquino delivered the keynote address in a forum, on the topic “Partnering Against Corruption Initiative,” at the highly expensive 43rd World Economic Forum in Davos, Switzerland.

When this column was written there were no reports yet on the forum’s outcome and on reactions to P-Noy’s speech. But the national media hype given the event, before he left Wednesday night, might have raised undue expectations of huge benefits that would accrue to the government and the economy.

For instance, a major newspaper bannered, “P-Noy to speak in Davos, ‘Daang Matuwid’ goes to World Economic Forum.” It cited Malacanang as saying that the forum would give the President “a golden opportunity to make a pitch for a new Philippines on his watch that is ‘open for business.’”

A follow-up news report quoted Phl ambassador to Switzerland Leslie Baja as gushing:

“I think the biggest impact would be the message that (P-Noy) will be able to give to the audience… There are over 1,600 CEOs (corporate chief executive officers) who will be attending Davos…and I think the message will certainly be that the Philippines is back in business… that we’re ready to do business with any country in the world.”

However, the news report pointed out that the anticorruption forum would be held “on the sidelines of the Davos meeting.” It was right.

The main concern of the five-day 43rd WEF, which began June 22, is the sluggish global economic recovery and its ramifications, specifically as regards the US economic doldrums and Europe’s continuing struggle to save the euro and overcome the financial-economic crisis. Thus the keynote speakers in the main event were German Chancellor Angela Merkel, Italian Prime Minister Mario Monti, IMF Managing Director Christine Lagarde, and European Central Bank President Mario Draghi.

The anticorruption forum that P-Noy keynoted was not among the key events lined up in Davos, it was a sideline activity and not the only one. It could not therefore have been attended by all the 1,600 CEOs, or by the 50 heads of state that converged at the famed Swiss ski resort near the Alps.

Other forums were simultaneously held on Jan. 24, two of which involved African states: a panel discussion on “Challenges and Transformation Shaping Leadership Context in Africa,” and an interactive discussion among six heads of state on “Africa’s Promise: How can Africa’s Leaders Deliver on the Continent’s Promise?”

In fact, 220 sessions were on the official program of the 43rd WEF, covering a slew of issues that may be common to all, or specific to certain sets of countries or regions. The expected 2,500 participants — top business leaders, political leaders, selected intellectuals, and journalists — couldn’t have possibly attended all of the sessions, or be interested in all of the issues.

This is not to say, however, that P-Noy’s appearance in Davos didn’t earn dividends for the government. But exactly in what terms and measurable value remain to be determined. A factual assessment of the results must be done.

Worth noting is that P-Noy reportedly had a “lean official delegation” of seven Cabinet members (were there no unofficial hangers-on?). A prudent move if it were so, given that the MINIMUM entrance fee to the WEF annual event is $20,000 (equal to P820,000) per participant. For transparency, P-Noy should tell the nation how much government money his delegation spent in Davos.

To be sure, there have been plenty of speeches and debates on the global financial-economic crisis. But observers of the WEF in the past years — particularly since the global crisis began in 2009 — are skeptical that any definitive consensus or positive action can be expected after the participants depart Davos.

Worse, certain analyses cum predictions made in previous Davos events by acknowledged authoritative figures have proved to be deficient in credibility. The New York Times chief mergers and acquisitions reporter, Andrew Ross Sorkin, provide these examples:

1. Bill Gates, Microsoft co-founder, philanthropist and WEF mainstay for over a decade, made certain wrong predictions in his own industry.

In 2003 he derisively declared: “These Google guys, they want to be billionaires and rock stars … Let us see if they still want to run the business in two to three years.” (Google thrives today, with its co-founder Larry Page still as CEO). In 2004, Gates said, “Two years from now, spam will be resolved.” (“If only,” Sorkin writes wryly.)

2. IMF chief Christine Lagarde, then French finance minister, stated in 2011: “I think the euro zone has turned the corner. Let’s not short Europe and let’s not short the euro zone.”

3. In 2001,the WEF cobbled together a panel to represent “the shape of the 21st-century corporation.” It included Enron, Hewlett-Packard, and Merrill Lynch — all underwent managerial problems later.

4. In Davos 2008, eight months before Lehman Brothers collapsed and triggered the current global crisis, C. Fred Bergsten, director emeritus of the Peterson Institute for International Economics, boastfully said: “It is inconceivable — repeat, inconceivable — to get a world recession.”

Sorkin cautions: “If you are looking to the Alps this week for wisdom, know that the views of this global elite may not be the most accurate.”

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E-mail: satur.ocampo@gmail.com
January 26, 2013