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Opinion: Love it or hate it, Davos matters

This year's World Economic Forum delivered plenty of grand statements about financial, political and social risks, but little in the way of solutions. As Sam Edmonds writes, there are two sides to every coin in Davos.

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Few events divide public opinion like the annual meeting of the World Economic Forum in Davos. It is, after all, a five-day talk shop for the world's rich and powerful to debate issues of global importance without having to take any measurable action afterwards.

Anti-globalization activists and other critics like to highlight the air of elitism and surreal decadence that fills Davos each January – and it's difficult to miss their point.

Each morning hundreds of the business world's most influential managers stomp past the high-end boutiques in brand-new snow boots on the way to the congress center, followed by an entourage of BlackBerry-toting assistants and security personnel.

Throughout the day they attend discussions covering everything from financial regulation and climate change to poverty and AIDS. Breaks in the program are used to swap business cards.

By early evening the icy streets are jammed with luxury SUVs and limousines – each bearing a forum sticker proclaiming the vehicle's "green" credentials. And at around 10pm the movers and shakers file through the metal detectors at various hotel entrances to see and be seen – generally over several glasses of expensive champagne billed to some bank's catering account.

Even if most delegates did resist the lure of the nearby ski slopes and attended the discussion about AIDS, it's difficult for many people to understand just how such flamboyance can be compatible with the forum's stated goal of "improving the state of the world."

The other side of the coin

Given the amount of money flowing through the village throughout the five-day program, it's easy to see why U2 front man Bono once derided Davos "fat cats in the snow."

But there's another side to the World Economic Forum that goes beyond conspicuous consumption – a side that Bono himself presumably discovered when he first attended Davos in 2006 to promote charitable causes. He has, after all, returned several times.

World Economic Forum logo

Davos brings big players together like no other event

The thing about Davos that so many of the world's rich and powerful value infinitely more than that bottle of champagne is the event's combination of exclusivity and accessibility. Most of the 2,000 or so delegates are difficult to reach, but for five days they're all together in one isolated Swiss village.

This allows executives and policy makers to set up private meetings on the sidelines of the panel discussions and speak about issues directly. (Indeed, Deutsche Telekom chief Rene Obermann recently described Davos as Facebook in real life.)

One key example occurred in 1988, when Greek and Turkish leaders meeting in Davos met and defused tensions that some observers feared would lead to war. Another took place in 1990, when Mexico's president at the time became worried about the rising competitiveness of eastern European nations and approached a US trade representative to discuss a possible free trade agreement. The result is now known as NAFTA.

In 1996, when a group of Russian oligarchs concerned about the growing influence of the nation's Communist party joined forces to engineer the re-election of Boris Yeltsin as president.

Changing face of Davos

That's not to say the Davos meeting is exclusively the domain of Russian billionaires, British bankers and American technology tycoons. The surge of anti-globalization sentiment in the late 1990s prompted organizers to add some critical elements to the invitation list, too.

Nowadays "social entrepreneurs" and delegates from NGOs like Oxfam and Greenpeace roam the congress center, presenting their concerns directly to decision-makers capable of making a difference.

The world's up-and-coming generation – often left out of high-level political and economic dialogue - was represented by a group of "young global leaders." And the large number of attendees from emerging markets certainly seemed to support this year's focus on the shift of power from industrialized Western nations to economies in Asia and Latin America.

More questions than answers

The root cause of diverging opinions on the World Economic Forum remains its status as an independent platform for discussion – not decision-making.

After five days of debate about economic reform, sustainability and social justice, many delegates left Davos on Sunday with more questions than answers.

How will increasing prosperity in developing nations affect climate change? Can commodities markets be shielded from speculation to avoid food price spikes? How can capitalism be remodeled to make wealth distribution more equitable? What does unrest in Egypt mean for northern Africa and the rest of the world?

The World Economic Forum is not a body that can decide these matters – and nor does it claim to be. Instead, it supports the G20 as a platform for economic reform. Hopefully the discussions in Davos have given the leaders of those nations something to think about ahead of the next summit in Cannes, France in November 2011.

Author: Sam Edmonds, Davos
Editor: Kyle James

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