January 25th, 5:25 pm by Barbara Zigah
(eToro Blog) With the debt crisis in the Eurozone still such a huge piece of unfinished business, the meeting of the World Economic Forum which begins today in Davos, Switzerland might seem superfluous. After all, aren’t the key politicians and policymakers already regularly gathering to discuss the global economic crisis – and that with few solid results? What makes Davos different, or for that matter, relevant?
Proponents would argue that for one thing, Davos brings together not just politicians, economists captains of industry and corporate royalty (not to mention some real royals), but influence peddlers in untold industries who can make their voices heard and in turn convey a message back to their minions. One regular attendee believes that its importance is as an independent forum, bringing together a multitude of people and ideas which could increase awareness of both the challenges and opportunities that the world is currently facing.
The forum’s theme is “The Great Transformation: Shaping New Models” and the agenda hits highlights that include the future of capitalism, unemployment and job creation, and cyber-related security. Critics have regularly argued that Davos is “all talk and no action.” One well-known skeptic is Mohamed El-Erian, the chief executive of Pimco, who doesn’t believe that the forum will have any real impact, and for the most part, even the participants aren’t expecting a “grand deal” out of it.
Also in agreement with that sentiment is economist and Nobel Prize winner Joseph Stiglitz, who is attending the Davos forum nonetheless, and will bring his gloomy outlook to bear. He foresees the risk of yet another credit crunch, and believes the “weakness of appropriate government responses” will make matters worse. Or as Harvard economist and Professor Kenneth Rogoff said, “The political paralysis is tremendous.”
But while cynics might suggest that the conference won’t solve these issues, proponents argue that the point is to develop solutions, some of which may require “out of the box” thinking which could come from individuals not typically privy to the discussion.
Not on the “official” Davos agenda will be high-level, not-so-secret “secret” meetings of the “Informal Gathering of World Economic Leaders,” aka IGWEL. The outcomes of these meetings are typically not divulged until much later, if at all. However, some of the fresh “out of the box” ideas which emerged from IGWEL eventually morphed into NAFTA and the 1992 Earth Summit.
Surely, there is the hope that perhaps in a setting more conducive to relaxation the worlds’ leaders might be able to come up with a creative solution to the Eurozone crisis. At the very least, given that Davos affords attendees access to policymakers and leaders where there might otherwise be none, the IGWEL will have heard first-hand the pleas of those affected and disenfranchised by the crisis.
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