I was at the World Economic Forum annual meeting in Davos last week and wanted to share some thoughts with the group.
The 40th annual meeting of the World Economic Forum had a bold theme for the event, ‘Improve the State of the World: Rethink, Redesign, Rebuild.’ In the aftermath of the 2008 financial crisis and the global economic slowdown of 2009, this year’s meeting was expected to conceive of a new global architecture in which not only would such financial meltdowns would be prevented, but also would create a more inclusive and equitable world for all sections of the population.
Several world leaders from public and private sectors led the discussions, and over 2500 participants from around the world were present for the five day event. After intense discussions both in the formal panels and on the sidelines of the event, there are three broad takeaways that can be teased out.
The first broad issue focused on the economy and financial sector regulation. It was felt that the financial sector that caused the most recent economic mess needs to be tightly regulated. Nicholas Sarkozy in his inaugural address raised the bigger themes around this issue, and left it to the experts over the next couple of days to come up with the answers. The discussion was not whether the world should have capitalism, but rather what form of capitalism should prevail in the years ahead. There were several specific suggestions that emerged in the panel discussions, but there was an underlying tension that one could sense between what government representatives, central bank regulators wanted and what the financial institutions were willing to give in to.
The economic stimulus packages that were created as a response to the crisis in several countries seem to have averted any major economic disaster in most countries. Governments invested hundreds of billions of dollars to shore up capital and liquidity of private financial institutions, thereby preventing further catastrophic impacts on their respective economies. This has somewhat taken away the pressure on the governments and private players to press ahead with any serious reform. So it leaves the nagging question as to whether the crisis will at all result in any kind of major overhaul of the global financial system.
The second big theme that recurred in various ways through out the conference is that of climate change. A number of governments were concerned about the issue, and even though the Copenhagen talks did not achieve major progress, there was still much hope and desire for concerted action. It appeared quit clear that in the US, China, and Europe there would be large scale private investments in developing new green technologies in the next few years, quite independent of whether the governments take any concrete action on this issue.
For India, this was one more year in which the Davos platform was used to showcase our growing capabilities. There were almost one hundred participants from India, and a significant Press contingent. Many from India spoke on panels and made a mark on the discussions. There were two separate panel discussions in which India was the theme. On the financial sector, India will have to tread the path cautiously, as we have done in the past. On climate change, India will need to take up the matter in a way that is relevant to Indian realities, but also develop a conscious strategy to promote the sector just as the IT sector was promoted about 15 years ago. The green economy worldwide is likely to be the next big revolution and could present significant opportunities for countries and companies that are ahead on the curve.
Forty years of the World Economic Forum seems like a long time, and it is quite impossible for one to quantify the exact impact of this initiative. In this year’s meeting did the participants ‘Rethink, Redesign, Rebuild’ the world order, one cannot say. But there are a few things that make it obviously useful. A number of world leaders both in the public and private sectors share cutting edge ideas on a range of issues such as the economy, education, health care, regulation, the arts, etc. The second high point is that in addition to these world leaders bringing out new ideas, there are a number of opportunities for them to meet and understand each others views better, and explore ways in which they can work together where required. And lastly, there are several opportunities for informal interaction with a range of actors across sectors, which provide very useful insights for participants most of whom are leaders in their respective spheres.
And what to say of the ‘Davos moment’ which so many people experience, as in my case, when on two occasions I turned around to find Bill Gates standing right next to me! All of this makes Davos simply worth it.
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