Davos 2017 - What was achieved?

Kissinger says a ‘creative’ Brexit could link Europe back with America and redefine the West

Davos – what’s it all about? By Victor Romain

Davos in January – that small, Swiss Alpine town, which always becomes very, very busy in January, when it hosts the world’s meeting of minds of the powerful, rich and elite among us mere mortals.

Davos, in January, is host to the meeting of minds at The World Economic Forum. Or WEF for short.

Like most of us mere mortals – I have often wondered what is all about and what the point of all of this excess is? The costs, involved of hosting such an even must be colossal – even without the security costs factored in.

Satyajit Das, of The Independent probably has the best answer to my question. He writes that, The only reason the global elite goes to Davos is to stave off loneliness and massage egos.

Further he says, For some, the meeting is an antidote to the insecurity or loneliness of leadership. For this group, Davos is like AA providing the opportunity of advice and counsel from equals. FT columnist Gillian Tett once quipped that it was ‘a self-help group for the global elite.’

Here (below) is his [Satyajit Das] excellent parody of the WEF at Davos:

The 2,000 or so of the global elite (0.00003 per cent of the world’s population) who meet at the World Economic Forum (WEF) are the Davos Men, a term coined by political scientist Samuel P Huntington. They exchange views, coordinate strategies and shape policy, captured by the paparazzi and adoring media.

The average age of participants is a little above 50. They are predominately male: fewer than 20 per cent are women. They represent around 1,000 organisations from 100 countries, although the largest proportion will be from Western Europe and North America.

The cost of attendance is high, although it is rarely your own money and it is tax-deductible. The fee structure is reminiscent of Groucho Marx’s attempt to purchase a racing guide in A Day at the Races.

he WEF must invite you to Davos, which requires payment of a fee. Then there is a basic ticket, which buys admission to general sessions. Additional fees elevate the participant to Industry Associate level, which allows participation at private sessions. Businesses pay a large sum to become Strategic Partners, which allows multiple attendees (important people must be seen with their entourage).

There is the associated cost of travel, accommodation and entertainment of associates and clients. All this must be an acceptable standard, which does not embarrass the attendee.

The quality of the intellectual talent and power present is usually not the reason for attending. World leaders, central bankers and policymakers rarely provide major insights or insider information, choosing studied caution in their utterances. Participants also regularly skip sessions other than the ones where they want to be seen.

In reality, it is a networking opportunity. Most Davos devotees would relate to philosopher Isaiah Berlin’s observation that “there are 567 people in the world and I know all of them”. Participants hope to build their Rolodex. Speed-dating allows face time with clients, regulators, politicians and peers compressed into a few hyper-efficient days.

Other luminaries who are not Davos devotees include Warren Buffett and Apple CEO Tim Cook. Google founders Larry Page and Sergey Brinand Facebook chairman Mark Zuckerberg are also not regulars. Non-attendees argue that Davos does not have a significant impact.

The real reasons for attendance are subtler. Some feel obliged to attend as their peers or customers do. For others it is an antidote to the insecurity or loneliness of leadership. For this group, Davos is like AA providing the opportunity of advice and counsel from equals. Financial Times columnist Gillian Tett once quipped that it was “a self-help group for the global elite”.

Davos’s attraction is proximity to wealth. John Kenneth Galbraith could have had Davos in mind when he noted: “Nothing so gives the illusion of intelligence as personal association with large sums of money. It is also alas an illusion.”

Exclusivity is important. Access is limited to people whose adoring and uncritical media profiles promote their purported genius and ability to walk on water. This obviates the sheer inconvenience of having to put up with other people who are not of the requisite calibre. The special can associate only with special others who understand them.

The Black Swan author Nassim Nicholas Taleb likened the WEF to “chasing successful people who want to be seen with other successful people”.

There is also a certain frisson, supplied by selected intellectuals, performers and artists. But it can result in confusion with celebrities wanting to be intellectuals, intellectuals wanting to be celebrities, and business leaders wanting to be both celebrities and intellectuals.

Davos also provides the opportunity to differentiate your own standing within the elite. Did you fly commercial or on your own private jet? Where are you staying? Does your driver have a sticker allowing door-to-door pick up service? Did [insert name of rock star/world leader or statesmen/scientist] attend your soiree?

But, like all such experiences, it is deeply unsatisfying, although few will admit it. Boris Johnson, when Mayor of London, saw Davos as “a constellation of egos involved in massive mutual orgies of adulation”.

Ultimately, the real problem is that it reinforces the global elite’s deep insecurity and fears. Steve Case, founder of AOL, told author David Rothkopf: “You always feel like you are in the wrong place in Davos, like there is some better meeting going on somewhere in one of the hotels that you really ought to be at. Like the real Davos is happening in secret somewhere.”

(Source: The Independent: 22/01/2017)

Global leaders say it’s not all about champagne

Arjun Kharpal, of CNBC, had this to write about.  In response to a question about whether Davos was all about the world elite drinking champagne, Sharmeen Obaid-Chinoy, documentary film maker at SOC Films and co-chair of WEF, said the meeting had brought together people from different backgrounds to solve problems.

“One of the greatest things about Davos is that everyone is approachable,” Obaid-Chinoy said during a CNBC-hosted panel discussion.

“Davos is inclusive.”

The other panellists also reflected on their week in the mountain ski resort in Switzerland with Franz Van Houten, CEO of Royal Philips, Brian Moynihan, CEO of Bank of America, and Helle Thorning-Schmidt, CEO of Save The Children International, all discussing moments where they felt positive about action coming from the WEF meeting.

Thorning-Schmidt said there was a “thoughtfulness” around Davos and that business leaders were not turning away from their obligations to be responsive and responsible – the theme of this year’s WEF.

Moynihan said he had seen a lot of “time” committed to WEF’s “Sustainable Development Goals” – a set of targets such as eradicating poverty and addressing gender inequality.

There had also been a real acknowledgement of public-private partnerships to address many issues, according to van Houten. But the Royal Philips boss also acknowledged that trust in business leaders was low, and that they would ultimately be judged by whether they fulfill their promises to society.

“There’s clearly a lot to do … We had great discussions but the world needs to judge us on our actions,” van Houten said. (Source: CNBC: 20/01/2017)

Henry Kissinger on Brexit

However…Henry Kissinger had this to say, at Davos, on the UK’s Brexit, “A ‘creative’ Brexit could link Europe back with America and redefine the West.”

Further, he went onto say, “I could imagine that Brexit will be used in a creative way not to see how to minimize the damage but how to create a new role for Europe and America in the Atlantic partnership,” the Nobel Peace Prize winner told an audience at the World Economic Forum in Davos.

He explained that in its current form, the EU had issues over the “economy and security” that were “very difficult” to solve in a forum in which unanimity is the absolute requirement.

His suggestion was that, whilst maintaining its current structure, the continent could create within it sub groups on finance and security, where decisions could be made with a particular influence from the countries that will have to carry the greatest burden on these issues. This, he said, would be aimed at preventing the occurrence of crises caused by the unwillingness of everyone to meet certain goals.

“Britain could renter Europe as part of these groups and it could also perform a function in linking Europe and America,” he added.

“I am suggesting that we need to find a solution in which the Atlantic region can act with the same moral conviction as it did in the early stages of the Atlantic alliance .. Which reflects the new distribution of power that has emerged and address the problems that one could not even imagine when the Atlantic region was formed.

And, if our new president (Donald Trump) gives an impetus to this kind of dialogue, and withdraws the threat of an American withdrawal … Then we might have a new period on which the Atlantic region could contribute to the structure of the world.”

Henry Kissinger on Trump

The former U.S. secretary of state commented on the reality and perception of the outgoing president’s foreign policy feats.

“One of the major achievements or impacts of President Obama was to withdraw America from some positions in which it was overextended but also to create the feel that America was withdrawing from the world even from places in which over extension would not apply and in which its contribution remains essential,” began Kissinger, in conversation with World Economic Forum founder, Klaus Schwab before giving his advice to the incoming leader of the world’s largest economy.

“So President Trump will have to find a definition of the American role that answers the concern of many parts of the world that America was giving up its indispensable role of leadership in some categories – and major contribution in others – and to define what and where America can lead and where it must contribute and in that process help in the creation of an international order.”

Henry Kissinger on China

Kissinger described President Xi Jinping’s speech earlier in the week at Davos as being one of “fundamental significance” saying it laid out a concept of globalization.

“To me the most important aspect was that it was an assertion by China of participating in the construction of an international order,” he opined.

“One of the key problems of our period is that the international order with which we were familiar is disintegrating in some respects and new elements from Asia and the developing world are entering it,” he continued.

“What President Xi has done is to put forward a concept of international order in the economic field that will have to be the subject of conversation and the substance of the creation of an evolving system,” the career diplomat finished.

Henry Kissinger on Russia

Kissinger confirmed that he agreed with Donald Trump’s “general attitude” which he described as less confrontational and more political.

“I hope that an effort will be made for a serious dialogue which tries to avoid the drift towards confrontation and in which Europe, America and Russia come to some agreement about the limits within which military pressure is carried out,” Kissinger outlined.

“That is what I think one of the major tasks of the new administration,” he contended.

Yes…that, old, well-travelled, well-connected and wizened man,  Dr. Henry Kissinger, certainly had a whole lot to say at Davos this year. Like him or hate him…??? Good for him.

The Davos Elite on Trump

In an attack on the anti-globalization rhetoric that has led to the election of Trump, Xi Jinping told a packed audience on Tuesday: “It is true that economic globalization created new problems, but this is no justification to write off economic globalization altogether. … Rather we should adapt to and guide economic globalization, cushion its negative impacts and deliver its benefits for all countries.”

Although he never mentioned Trump by name, but it was clear where the Chinese leader was targeting his words. Others were more direct.

George Soros rebuked Trump in a Bloomberg interview Thursday calling him a “would-be dictator” who “is going to fail.” Fellow financial guru Nouriel Roubini slammed the “inconsistent” policies of Trump and predicted that a potential renaissance for U.S manufacturing would never succeed.

Joe Biden implored the media to not interpret his speech as a direct blast at Trump, but there was no mistaking that his words about Russia and Vladimir Putin on Wednesday were a sharp counter to Trump’s cordial statements about the Russian president.

However, Trump obviously was merit in the economic shindig, sending his newly installed advisor Anthony Scaramucci to temper any ill feelings. Scaramucci is a Davos regular and socialite whose message on Trump included the line: “He’s a compassionate man, he loves his children, he loves people.”

JPMorgan Chase chief Jamie Dimon said the country could grow at 3 to 4 percent this year with the right tax and regulatory reforms.

Others like Hollywood actor Matt Damon suggested the world should give the new president a little time before making judgment.

However, exactly what did the WEF meeting at Davos 2017 actually achieve?

And, the answer to my rhetorical question is…I don’t know.

Arguably nothing that is going to make a significant difference to us mere mortals – if any difference at all?!