Davos: the only place where ideas rule

High up in the mountains world economic leaders search for new ideas

FOR the past couple of years, I have driven across Europe in January to a small and largely ­unheralded ski resort; six-lane ­autostrasses and autoroutes give way to smaller equally clean highways, all lit by the low-rise sun of a European winter.

The roads narrow until we take the twisting, two-lane road up to the Swiss alpine town of Davos-Klosters. I travel there for what will be this year’s instalment of the World Economic Forum’s annual meeting — also known as Davos. For a period of less than a week the forum invades the town and it is cordoned off and polished and transformed into a makeshift centre of the universe.

Attending from Wednesday will be more than 3000 of the world’s leaders in politics, philanthropy, science, fund- management, technology and ­academia (with an over-representation of those from the dismal ­science, economics).

There will be the heads of most of the world’s biggest companies, countless billionaires, more than 40 heads of state, 20 heads of national banks, tech wizards, Nobel prize-winners and just about every ­celebrity economist .

High-powered delegates are outnumbered by a highly armed security and military presence.

Australia’s contingent is ­expected to include Assistant Treasurer Josh Frydenberg, Telstra chief executive David Thodey as well as Telstra chairwoman Catherine Livingstone.

Other Australians preparing to head there this week include incoming Westpac chief executive Brian Hartzer and his chief financial officer, Peter King, as well as Brambles chief executive Tom Gorman and Future Fund boss David Neal.

The gathering attracts an enormous amount of media, a good percentage of which is a meta conversation about how packing so many suits in the snow, holding four nights of cocktail parties, reports of exorbitant accomm­odation prices, context-defying celebrities and two dozen Nobel laureates makes sense. Or more importantly, makes any progress.

For the media, those invited get priceless access to a year’s worth of interview subjects over four nights, and for them, and more so for those not invited, the World Economic Forum is a big soft ­target. One senior journalist called it “a week of introspection, learning, grandstanding, contact-making and hard-core partying”.

I don’t know where he gets his kicks, but I’ve never attended an evening of debauchery where the drinks are restricted to white wine and the sponsor is a global ­accounting firm.

I don’t fit easily into any of the traditional categories. I’m writing for The Australian and a US online journal, and I have my own take on what makes this gathering so ­special.

It certainly isn’t the snow — it’s mostly left untouched. There is so little accommodation in town now skiers can’t get in. I met an American Fortune 500 chief executive who told me he was “dorming” with six associates in a two-bedroom chalet.

It felt like college, he said, but with the hassle of everyone putting on suits and doing their hair at the one mirror.

It isn’t for the cocktail parties, as accountants, try as they might, have never thrown the best of those. In fact, I’d be a little ­suspicious of any accounting firm that showed real skills in throwing parties.

The biggest international firms, financiers and auditors, churn the water with well researched reports on the state of the world, then trawl with a dragnet for new ­business. But when the tone is set by a 300-page meticulously researched paper on the state of the world, a world in which nobody is feeling overly bubbly, it’s not exactly like shouting “get this party started”.

The first few days always ­involves too much fascination of the first few days.

After all, attending the world’s highest powered conference in Switzerland is one thing to tell your associates when you get home, but cocktail parties with Mick Jagger are a completely ­different thing.

Angela Merkel will be there, so will David Cameron, and for the first time Francois Hollande. Or will he? We all pray he will not have a new reason to provide a sombre excuse to send his apologies, as, after the events of the past weeks, nous sommes tous Charlie, Francois will, on social if not political terms, be the top Charlie in town.

The reason I do what I can to attend is for what goes down when you put this mixture of people in the thin air of the town 1500m above sea level, barricade them in, and schedule meetings they feel they should attend from two hours before sunrise to five hours after last light.

Davos takes place on the ultimate neutral territory. Putting aside the arguments as to exactly how neutral Switzerland is, this place is neutral in the sense that it isn’t like meeting an executive of a multinational on a roadshow or meeting politicians in their corridors of power.

This is a purpose-built conference centre designed to get people together to talk across their ­divides.

The magic here is that it puts all comers on equal footing. Big business, the fund allocators, the administrators and the politicians go toe-to-toe with members of civil society, upstart young global ­leaders.

The normally basement- dwelling scientists, NGOers, religious leaders, and a spattering of niche artists with a sprinkling of celebrities — these are on the same level as the current corporate and political power list.

Everyone is equally inconvenienced by the shuffle between the main conference centre and the other buildings that hold dinners, lunches and those attention-grabbing cocktail parties.

Everyone is reduced to the same queue for their warmth providers, everyone rolls out of one building looking like a penguin and shuffles to another building to partially disrobe and carry on as if it wasn’t freezing outsides. I asked a guy if I could sit at his table as he had a spare seat — he also had a Nobel prize. The bathrooms, well, that’s another story.

The entire program is designed by this combination of politics, business and civil society (loosely those trying to do something to make the world a better place without the benefits of power or enormous remuneration).

Sure some people are here to just get their pipeline funded, but intellectual heft drags most towards the substantial. And in a world full of substantial, there is plenty that needs talking about.

But what does it achieve, the sceptical ask, demanding results that frankly will always be hard to quantify.

Sure there is lots to make fun of. It’s so easy to poke fun at the entire thing, badge envy, inappropriate attire for the alps, empty ski slopes, the stiffness of the Swiss, leaders with questionable human- rights records. And, of course, there is that guy trying to get his pipeline funded, who leaves you mid-sentence to try to corrupt an idealistic young leader or at least buy her a (free) glass of white wine. And yes, the leaders with the most questionable human-rights records will not be asked any really tough questions.

But in a world of relative stability economics trumps politics. Here they will provide you with simultaneous translation if you don’t speak English, but everyone has to have a passing understanding of the language of economics.

Of course, it’s not just where people come from, from which category they represent, but the individuals themselves who make the difference.

If you have ever been to a high school or college reunion, you know there is a success bias in those who attend. Here you know that those who don’t turn up, or cancel “for reasons beyond their control” at the last moment, include those politicians with poor approval ratings, chief executives with their stocks in free-fall, and scientists with a patent application that was rejected. Hedge-fund managers up 20 per cent attend in up years — they are less conspicuous in down years.

The crisis of 2008 that framed the past few years here has certainly subsided, but what is left over is more disconcerting. Yes there are funny accents, shirts worse than an APEC meeting, and out-of-context pairing taking the stage: Al Gore and pop artist Pharrell Williams. So what? An almost president of the free world and a platinum-plated pop producer are talking together on the same subject — how to communicate better on issues of global warming.

Criticism is that it’s all talking. Nobody has made the head of the WEF, Professor Klaus Schwabb, King Klaus yet. And sure, we are surrounded by a small well-armed militia, but it’s on loan from ­Switzerland.

Talking has it place. The annual meeting is an incubator, a testing of ideas, a forum for frank conversations and divergent ideas in the room at the same time. It’s a combination of business, politicians and civil society and puts them on equal footing. Addressing the challenges, and underneath all the snow, inside the barricades, within the protected confines of the purpose-built conference centre, real conversations take place. Every delegate is just as uneasy as the other. It’s a level playing field.

The need for new ideas is as live as ever. And ideas start their life with debate. Sure the economic crisis is officially over, but what’s left behind is much worse, much harder, more insidious. The economic crisis was an exciting sounding name given to a problem that still remains. We’ve woken hung­over from a party that wasn’t even that much fun.

The issues of structural unemployment, growing inequality, regional instability, deflation and oh, that China issue, keep being ­kicked like the can ­further down the road.

So we are left with all the problems, but with a whole lot less of the excited energy to tackle the ­issues. Few politicians have any mandate to do anything radical to fix things.

Davos will always be an easy target, because, to paraphrase, everyone here is in the arena. It’s easy to criticise them and poke a little lighthearted fun at them, but to be anything more than a schoolyard bully with a keyboard, you have to put up an alternative.

So bring on the debate, bring on the critics, but until there is an ­alternative, this is where the action will be.

Even if, regrettably, the parties are not as good as the hype, and there is no time for a ski.

Why Davos? Writing from the side of a hill.

Why I Davos. The title of an upcoming piece explaining why I am excited to once again attend the Annual Meeting of the World Economic Forum (called Davos by its friends and haters alike) an event that is so discordant that the world’s media has decided it “is impossible not to mock.” (Washington Post)

Alissa Everett and I are attending the 2015 version; I will be writing for The Australian, blogging for The Huffington Post, Alissa will be instagramming at instagram.com/alissaeverett, and after hours we will be dancing for the heck of it. No snow will be hurt in the production of these reports.

Camerons Brilliant Blazing Saddles Strategy

Clumsy Cameron holding a gun to Britain’s head

  • From:The Australian 
  • January 25, 2013 12:00AM

I AM guessing British Prime Minister David Cameron has seen Mel Brooks’s 1974 cult comedy classic Blazing Saddles.

It’s a politically incorrect spoof-Western that features Cleavon Little as a young black Sheriff Bart who is sent to the whites-only town of Rock Ridge.

In one of the film’s most memorable scenes, the sheriff finds himself surrounded by the racist townsfolk, their six-guns drawn, ready to shoot him dead.

In a wonderful piece of lateral thinking, the Sheriff pulls his own gun and points it at his head.

“Hold it! Next man makes a move, the nigger gets it!”

The dim-witted townsfolk take him seriously: “Hold it, men. He’s not bluffing. Listen to him, men. He’s just crazy enough to do it!”

The townspeople drop their guns and Bart, pushing the gun into his own neck, drags himself out of group.

Once he is safe inside his own office he congratulates himself:

“Ooh, baby, you are so talented!” and then he looks into the camera and says “and they are so dumb!”

This scene is all I could think of as I listened today to Cameron’s “England and Europe” speech.

I am sitting at a folding desk in the media room of the World Economic Forum (WEF) in Davos listening to a webcast. To my left are a team of Chinese video journalists, young, fast-moving women with nice cameras. Behind me is the team from one of the most conservative British newspapers.

They know what they are doing, type quickly, talk faster, and are producing column inches quicker than I can get up to get another cup of coffee.

I’ve been pondering the issue of how worldly this forum really is. At times I feel as if the W of WEF stands for White or at least West. The organisers will hate me for making that simplistic joke, but I wonder how the Chinese think about Cameron’s big European speech today.

The world is burning, we’re facing a lifetime of financial turmoil and the leader of the seventh-biggest economy has just ensured that the personal relationship between England and Europe will remain a focus for the next five years.

Wouldn’t China just sort this thing out? And wouldn’t a democratic leader just make a decision, and stand by it? If they want to vote him out, they’ll have a chance to do that once, possibly twice, in the next five years.

The tweet from Cameron was shorter than the Prime Minister’s talk, so to save you 5700 words of pure populist circularity this is what he wrote on the micro-blogging site:

“5 principles for a new #EU: competitiveness, flexibility, power flowing back to member states, democratic accountability, fairness #EUspeech”

Whoever advised it to be called the “eu-speech” was spot on.

Cameron wants a better, more dynamic, less bureaucratic Europe. He’s not alone: so do 300 million Europeans.

Europe didn’t come together and try to be bureaucratic and slow-moving. It is just the nature of the damp squib of regulations that they dropped on the continent because the previous years of brave, inspirational leaders hadn’t worked out so peacefully.

Cameron and others complain that the Brussellian bureaucrats are unelected, which is certainly true. They would love an elected mandate, but no one wanted to create another tier of government, so Europe agreed on another layer of bureaucracy.

Leaders lead — or they are supposed to, David — and bureaucrats bureau (French for making office).

It is at times like this that the World Economic Forum feels like a place where white people from old economies have heated conversations about old people’s problems. The economics of where’s-the-closest-bathroom, the politics of will-my-knees-handle-this-hill.

I raised my concerns with the organisers, and they sent me plenty of information to confirm there are actually a large number of representatives from Asia (700 at least), and plenty of sessions covering Asian issues. The WEF has a Chinese Annual Meeting too.

There’s also over 1000 of the next generation, Young Global Shapers and Young Global Leaders, many here but hundreds more spread around the planet who are doing great things. They are 50 per cent women, and 100 per cent driven. The WEF gives their projects a platform, and connects them to each other and the big end of town.

OK. I sit here soundly corrected.

But I can’t help feeling that what we are doing is very Western.

We are here to use multi-lateralism — which is not the Asian way of operating — to solve a problem — which we’ve defined as them!

Europe has a problem, Cameron says, because its share of global GDP is falling. He’s not saying that Europe’s GDP is falling (yet) but that its relative share of world wealth is falling. That’s essentially like saying that because your friend’s about to get rich, your life is about to suck.

And while politicians use the fear of the growth of China to drum up support for their agendas, what the growth of China means in human terms is quite different: the average Chinese person will be poorer than the average Brit for at least the next 50 years, even under the more bullish estimates.

Exactly how long does the average Chinese person deserve to stay poorer than the average Brit? Fifty years, 100 years, or forever?

Cameron speaks of the rise of Asia in terms of “the challenges coming from the surging economies in the East and South” and that “we should be in no doubt that a new global race of nations is under way today. A race for the wealth and jobs of the future.”

A race? A yellow race by chance? Who suggested that word be used?

The problem, as defined by many Western leaders, is not that we spent money we didn’t have, not that we waste money on poorly planned wars or ridiculous drug policies, but that the Asian nations are “soaring”. The horror! Watch out, crouching tiger, flying economy!

People at the forum are still talking about China’s visit a few years ago, when they made it very clear that they would keep their currency at a level that helped their people.

The shock! Monetary policy to benefit your own peasants, not other people’s bankers?

It’s radical, and it makes you wonder what is the purpose of a currency after all.

Britain seems to want a United States of Europe, the way Canada wants the United States of America: a large uniform market that is very close but not such that they have to accept their neighbour’s whacky way of life.

If the goal is to fix Europe, what has giving English people an optional vote in five years got to do with that?

Oh that’s right, it’s the “gun to your own head strategy”.

“Agree to our demands or the British public gets it in the head!”

The problem with Cameron’s plan to put EU membership to a plebiscite is what happens if the Europeans are not as stupid as the rednecks of Rock Ridge. If the Europeans are smarter, they’ll call his bluff, and he has to pull the trigger.

Businessman Peter Holmes a Court is at the WEF in Davos.