Leaders flock to Davos to discuss economic crisis

DAVOS (Reuters) - Political leaders and central bankers will dominate this week’s annual Davos forum as a chastened business elite is sidelined in the drive to reboot the world economy, improve global security and slow climate change.

Swiss army soldiers walk past the Congress Centre, venue of the World Economic Forum (WEF) in Davos January 26, 2009. REUTERS/Pascal Lauener

More than 40 heads of state and government -- almost double the number last year -- will be joined by 36 finance ministers and central bankers, including the central bank chiefs of all the G8 group of rich countries except the United States.

About 1,400 business executives will also be in Davos but fewer top bankers and captains of industry are expected as they struggle to keep their businesses afloat -- and themselves in a job, mindful of the event’s glitzy image in more austere times.

Former U.N. Secretary-General Kofi Annan, one of the meeting’s co-chairs, said the world needed both politicians and business leaders to cooperate to find solutions.

“They need to work together. But I think the pendulum is swinging toward an increasing role of governments,” Annan told Reuters in an interview in Geneva.

Russian Prime Minister Vladimir Putin will open the four-day meeting on Wednesday in the Swiss Alpine resort that is being organized under the title “Shaping the Post-Crisis world.”

Also present will be Chinese Premier Wen Jiabao, German Chancellor Angela Merkel, Japanese Prime Minister Taro Aso and British Prime Minister Gordon Brown as well as Valerie Jarrett, a senior adviser to new U.S. President Barack Obama.

It is the first time world leaders will get together to discuss the deepening crisis since a meeting of the G20 group of big and emerging countries in Washington in November. The G20 meets again in April ahead of a G8 summit in July.

The World Economic Forum was set up in 1971 as a business and academic think tank whose motto is “entrepreneurship in the global public interest.” Its annual Davos meeting has grown into a huge event that has become a focus of anti-capitalist anger.

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The Financial Times newspaper predicted this year’s meeting would be characterized by “sobriety and self-recrimination” with fewer lavish cocktail parties and corporate skiing jaunts.

Instead, participants are invited to an event that simulates life in a refugee camp and asks them to navigate a mine field, while non-profit groups will hand out awards “for outstanding achievements in social and environmental irresponsibility.”


A WEF report ahead of the meeting said the main risks facing the world included deteriorating government finances, a slowing Chinese economy and threats to food and health from climate change, along with a lack of global coordination to tackle them.

Worries about protectionism as a response to the downturn are also growing. Around 20 trade ministers meet on Saturday in Davos to discuss long-running Doha trade round talks after a G20 call for a deal by the end of 2008 fell on deaf ears.

“We have not yet seen the same protectionism in trade with beggar thy neighbor policies of the ‘30s. And I will fight hard to ensure we do not,” Britain’s Brown, who will chair the April G20 summit, said in London on Monday.

“But we also need to ensure we do not exercise a new form of financial mercantilism of retreat into domestic lending and domestic financial markets,” he said.

While the focus will clearly be on the world economy, security challenges like ongoing tensions the Middle East will also be on the agenda, as will climate change, with about 30 energy and environment ministers in attendance.

Annan said leaders at Davos needed to make sure economic woes do not eclipse challenges like climate change and poverty.

“I don’t think it is beyond human ingenuity to find an approach that tackles these issues across the board,” he said. “We need to get across a message to the people that those in a position of authority do care,” he said.

While this year’s meeting illustrates a shift in the balance of power toward governments, political leaders in Davos are likely to get a reminder that the crisis also threatens their own positions after recent civil unrest in several countries.

While activists have been kept away from Davos itself after a demonstration turned violent in 2000, protestors have warned of trouble in Geneva after an anti-capitalist march planned for Saturday to coincide with Davos was banned.

“The WEF is a symbol of the neoliberal policies of the last 20 years that have caused this crisis. We have no confidence that the same people who caused the crisis can solve it,” said Laurent Tettamenti, an organiser of the Geneva protest.

Additional reporting by Laura Macinnis, Editing by Mike Peacock and Toby Chopra