What the world needs is not Davos
29 January - 4 February 2009
While elites gather in Davos to bleat the same economic slogans, the rest of the world suffers the economic crisis they instigated and now propose to solve, writes Curtis Doebbler*
This week hundreds of business leaders and others interested in the world economy will flock to Davos, Switzerland -- one of the most expensive cities in the world -- to sip wine, smoke cigars, dine on exquisite cuisine and discuss the world economy.
The Swiss government will host this meeting of the rich and powerful while cancelling the human right to freedom of expression of anyone who wishes to demonstrate against the World Economic Forum whether peacefully or otherwise. The Swiss hosts will also vet anyone coming to make sure that they have the requisite cash to participate in this forum and are staying at one of the exclusive hotels or residences on offer. Even people living in Davos have trouble moving around their city when the forum is in town.
Although the residents of Davos don't have to put up with the inconvenience of dedicated, mainly young, people calling for a different approach to world economics, they will be hosting people like John Thain, the former Bank of America head of investment banking, securities and wealth management. Although he was recently fired from his post and his failing former employer doesn't want him to go to Davos, he has insisted on being there anyway. And after firing 5,000 employees, Microsoft magnate Bill Gates will be in Davos to explain how our current economic model can still be made to work, despite the most recent evidence of its failure.
Indeed, there will be a chorus of pro-Western economic policy adherents: the same ones that we have heard for the last decade -- or their like-minded successors -- singing the song about how economic growth is an end in itself to be accomplished for the betterment of the world. Nonetheless, for some of the rich and famous the tune being sung at Davos is becoming less palatable. Australian Prime Minister Kevin Ruud cancelled plans to come and US President Barack Obama is sending but a junior envoy. Venezuelan President Hugo Chavez did not even consider coming. And while it is true that the Russian and Chinese leaders are attending, it seems their motivation is more to meet each other and sign an agreement on sharing their natural resources in an equitable manner. Such equitable sharing runs contrary to Davos- think where resources should be exploited for profit and little else.
Despite some interesting developments that may take place on the sidelines of the Davos 2009 World Economic Forum (WEF), to many observers this meeting and its attendees are losing their relevance. This is not only because of their extravagance, but also because of what they represent. Most of the people at Davos are the same people who caused the economic problems that are rocking the world. While many of them have managed to personally survive the economic downturn reasonably well, they are the ones who are responsible for the suffering of the billions of people under an economic system they constructed, maintained and still control -- albeit less in the way they had become accustomed to.
Why would anyone trust those who instigated a problem to provide the way out of the problem? Wouldn't you want fresh advice from new faces, perhaps by the critics of those who caused the problem? Not the WEF. For them it is business as usual, even if that business is failing miserably.
Part of the problem is that those who are in Davos either haven't understood or haven't heard the message inherent in the suffering of so many people around the world. These supposed leaders and the global -- especially Western -- media still turn to the same old guard because it makes them feel secure in the world in which they live. Moreover, these failed guardians of the world economy still chant the same mantras of decades in the hope that we will adopt their hailed system of laissez-faire economics in which governments keep their hands tied while inequalities abound.
The myth of equal opportunity for all that underpins traditional economic wisdom has been shown to improve nothing for half the people in the world who live on less than two euros a day. In fact, as the past several decades have unambiguously proven, current inequalities grow wider almost every day. Currently, the GDP of the United States is more than four and half times greater than the average GDP of all countries in the world. That means that even if the American economy keeps devaluing as it has during the past year, in about a decade it will still be much stronger than the economies of any developing country. This takes into account, of course, that the economies of developing countries, which themselves have bought into the Western model of laissez-faire economics, will be proportionately affected by the world economic downturn.
The fact that the gap between rich and poor is widening in many parts of the world is -- according to many of those who will be in Davos this week -- an "unavoidable" consequence of our world economic system. Nevertheless, nobody in Davos will be admitting that perhaps there are alternative means for people to live with each other that do not depend on adherence to the failing world economic order that the Davos crowd created and is committed to perpetuating.
Even more strikingly, few if any of the Davos crowd will admit that the nations of the world have already agreed to a world system of governance that requires almost all countries, no matter what economic policies they pursue, to protect the basic rights of everyone under their jurisdiction. Among these basic rights are social and economic entitlements that governments have said to their own people, and to the world, that they will protect no matter what policies they pursue. These include providing basic housing, the highest standard of healthcare possible, access to education, and an adequate standard of living to everyone for whom they are responsible.
The bulk of current economic thinking ignores the binding character of these rights. It denies that governments are not entitled to negotiate away these rights. It ignores the fact that governments must ensure these rights to the best of their abilities and before other negotiable issues like military spending or the bailing out financial institutions is undertaken. It also ignores the fact that every government in the world can provide these rights now to those under their jurisdiction, if they only wanted to.
Unfortunately for most of us, the people who have been influencing how governments determine their economic policies don't think that guaranteeing the above social and economic rights for everyone is necessary or at all good for the economy. Instead they point to competition and how it teaches people to fend for themselves. They claim self-dependence is better for the world then a social system where people can trust that their government will distribute wealth so as to ensure that everyone has their basic rights satisfied. They don't usually mention the huge head start that they and their paymasters have over the voiceless majority of people in such a competitive system.
The myth that we all have equal opportunities to become rich and successful is as false as the promise of unlimited development in a world of finite resources. The World Wildlife Fund has been pointing out for years that if everyone in the world uses the amount of resources that the average American uses, we will exhaust all the world's resources -- including our clean air and our potable water -- in just over one generation.
Ironically, while indigenous peoples are lectured on the benefits of modern education, the longer existing indigenous civilisations in the world showed more respect for their environment and the natural resources around them than modern societies today. The United States is one of the most striking examples, where 300 years ago the native American Indians were using their natural resources more efficiently and effectively than modern American society. There will be no representatives of indigenous peoples in Davos.
For the demonstrators, who will have to ignore the Swiss ban on their freedom of expression to get their message across, there is an alternative to the world economic order celebrated by Davos. Their voices will not be heard in the extravagantly decorated and hyper-security controlled meeting rooms of the WEF. Instead, they will be forced onto the streets to brave the threat of prosecution for any attempt to express their views in public.
Despite the draconian crackdown on the human right to freedom of expression being imposed by the Swiss authorities, and despite the fact that their message will be largely ignored by world leaders in Davos and the Western media covering them, the message that these demonstrators have is more relevant than any other concerning the world economy. Many start from the premise that economic growth is not an end in itself; pointing to the economic and social rights mentioned above, they call for a more equitable distribution of wealth and for governments to take interventionist action to secure a basic social and economic safety net for their people. US President Obama's estimated $95 billion public spending pledge on social and economic infrastructure is a nod in this direction. And countries from the Middle East, Africa and Asia are responding to the current economic downturn by strengthening public services rather than privatising them, as they had been urged to do for the last decade.
The alternative voices counter those who say that government should let the free market function by pointing to current failures and adding that if a government does not provide basic social and economic security for its people, it has no value. This is an argument that few in Davos want to hear. Among the international economic policies alternative voices urge are that rich states honour the pledges they made almost three decades ago to provide .07 per cent of the GNP to overseas development assistance to poorer countries. As American economist Jeffrey Sachs has pointed out, if developing states were to abide by this commitment, the United Nations' minimum set of development objectives -- known as the Millennium Development Goals -- could be reached by the target date of 2015. Less than a handful of states have ever met this target, and in 2008 only Norway did so.
While the narrow-minded meet in Davos amid an economic and financial meltdown they instigated, this and other progressive policies will not be on the agenda. The reason is simple. The profit of the economic class that Davos represents depends on perpetuating policies that are harmful to the economy overall. A prime example is the prohibition of interest ( riba ) that is a fundamental part of Islamic banking. While Western governments have routinely denied the workability of lending money without seeking interest, the economic downturn has forced many Western governments to drastically cut interest rates on lending to almost zero. Yet even as governments have done this, the financial institutions that lend to the public have maintained their interest rates. So what is good for these financial institutions is never afforded to the public, and while the public suffers, individuals at the head of these financial institutions prosper -- almost by definition.
While there may be some facts to be learned from those who have run our world economy into the ground, does it make sense to focus attention on their views to dig us out of this rut? Perhaps it is time that the Davos crowd, their rich Swiss sponsors, the mainly Western media that so dutifully covers the Davos parade, and especially the policymakers who need to make the best decisions for their people, not a few elites, look to the alternatives. Maybe we should pay more attention to the next series of World Social Forums that will be held around the world this spring, where alternative ideas abound, or to the people expressing these ideas on the streets of Switzerland, if they are not arrested for doing so.
* The writer is an international human rights lawyer and professor of law at An-Najah National University, Nablus, Palestine.