The Standard.com - January 28, 2001, 11:20 AM PST Gabfest of the Haves and Have-Nots At the annual World Economic Forum in Switzerland, officials from the first and third worlds talk about bridging the divide.
By Industry Standard Staff
DAVOS, Switzerland - While the rich Western countries are busy predicting the U.S. economy's rebound and discussing the Internet's next wave, officials from developing countries are still trying to figure out how they got left so far behind in the old economy.
The theme of this year's meeting of the Word Economic Forum is "Sustaining Growth and Bridging the Divides," but nowhere is the chasm that separates the first and third worlds more evident than in the halls of the Congress Center where the five-day gabfest is being held.
Panels featuring the likes of Goldman Sachs Managing Director Abby Joseph Cohen and Accel Partners managing partner Jim Breyer are packed with fit Americans in black turtlenecks and gleaming teeth. Meanwhile, at sessions on globalization and deregulation, luminaries from developing countries argue over how to best privatize state-owned factories and how to get the U.S. to drop the textile quotas it still imposes on a number of Asian countries.
Still, Davos veterans say there has been an enormous change in the forum's annual gathering compared to a decade ago, when there were hardly any attendees from Asia and Africa.
For example, Thai Deputy Prime Minister Supachai Panitchpakdi, who will later this year become head of the World Trade Organization, has been talking about the need for fairer trade agreements for developing countries and says his lobbying is getting a better reception than ever.
"I think they are paying more attention to developing countries than before," Supachai says. He first attended the Davos meeting 12 years ago.
The Mexican government has made a major splash at the meeting, with newly elected President Vicente Fox courting businessmen at a Friday night dinner, attending a lunch hosted by Goldman Sachs and pushing for a "Nafta plus" agreement that would broaden relations with the U.S. and make Internet access available throughout Mexico.
His foreign minister, Jorge Castaneda - another Davos veteran - agrees that this year's meeting is different from those in the past. He says the world's top economies "are making an effort to be nice" to developing countries.
The impetus for the change of heart seems to be the Seattle protests. Last year, participants were in shock. This year, even the business community feels that more and more evidence is making it increasingly clear that untrammeled globalization and free markets don't work.
Panel-discussion participants from the business community and government agreed that Russia's economic "shock therapy" was a bad idea and that in some cases, Malaysian-style capital controls can be effective. Five years ago these ideas would have been considered leftist extremism.
In his opening address, Thailand's Supachai said he was not even going to bother discussing the IMF's role in the 1997 Asian crisis because it is by now widely accepted that the multilateral institution's efforts to bring economic stability failed. Indeed, in the hallways of Davos confab, Latin American officials are discussing how to prevent Colombia from accepting similar IMF aid because they fear the fiscal austerity required by the IMF could give rise to civil war in a country already fractured by guerrilla fighting and all-powerful drug lords.
But the new "touchy-feely" Davos, as one senior World Bank official described it, does have its limits. Police are out in full force and have cordoned off the whole town with checkpoints set up to inspect all incoming vehicles. Anti-global trade demonstrators did protest on Saturday, but they were miles away from the action in far-flung towns and were not seen or heard by the dignitaries present at the snowy ski resort of Davos.
Instead, the big shots participating in the event spent Saturday night in black tie, eating sushi and drinking Moet-Chandön at a late-night soiree complete with performances from live bands, professional tango dancers and synchronized swimmers.
Davos to protesters: Let them eat cake.