Jan 29

Davos – Politics Remain Part of the New Reality, But Shared Norms?

Björn Edlund

Bjorn Edlund
Retd EVP Communications, Royal Dutch Shell plc
Principal, Edlund Consulting Ltd.

If you’re a statesperson ( is that PC for “statesman”?) in Davos, the only setting properly reflecting your stature is giving a speech alone on the big stage in the main room of the big Congress Center.

So far this year, that honor has been bestowed on Russia’s Dmitry Medvedev, Nicolas Sarkozy of France, German Chancellor Angela Merkel and UK Prime Minister David Cameron.

Oh, the Swiss President Micheline Calmy-Rey also spoke from that perch. (Never heard of her? Don’t worry – the one-year presidency in Switzerland rotates between the country’s seven government ministers).

What did they talk about? The financial crisis. What are we doing in their country? Do we need more regulation? What do we do with the ailing euro?

Cameron said the world needs “an aggressive, pan-continental drive to unleash enterprise”, including making trade easier and encouraging innovation by making venture capital more easily available and patenting more affordable.

Using the two-card scoring of figure skating, Cameron got 7 out of 10 for technical perfection (content) and 9 out of 10 for artistic expression (style) – exuding an enthusiasm that even his old Etonian accent couldn’t mask.

Sarkozy spoke of importance of the G-20 (France is the chair). And about the euro as a central tenet of European integration.

Sounding like Dirty Harry in French (“make my day”), he warned speculators they’d ruin themselves with a bet against the euro. His artistic scores, as usual, were higher than his content.

Merkel said the debt crisis had shown that more regulation is needed. She didn’t echo her own proposal of 2009 – launched in Davos – that the United Nations, in addition to the Security Council, needed an Economic Council with powers to intervene.

I’m too old-fashioned a gentleman to giver Merkel points. Suffice it to say that reporters at the scene saw crowds of delegates, watching the live feed of the speeches from adjacent rooms, thin out markedly during her speech.

But she did hit a much-discussed 2011 Davos theme with her call for more financial regulation. Some want it. Some don’t.

To no one’s great surprise, senior bankers from Goldman Sachs and other financial powerhouses didn’t miss an opportunity to say that we don’t need more regulation, thank you very much.
US Treasury Secretary Timothy Geithner talked about maintaining stimulus measure to ensure a recovery, with more facts than enthusiasm (score 7/5).

Somehow, there is a sense of oblivion and otherworldliness about a lot of the talk in Davos – in any year – for all the efforts to pull together the powerful and the thoughtful.
A real issue was probed this year, though.
As the world tries to deal with the impacts of globalization (open trade in a world with many closed minds, still) where do nation states come in?

And how can citizens know whom to elect to look after their country’s interests without causing damage elsewhere?

Italy’s minister of economy and finance, Giulio Tremonit, had a zinger on this theme.
The democratic world’s motto, he said, has gone from “liberté, egalité, fraternité” (liberty, equality, brotherhood) to “globalité, marché, monnai” (globalization, market, money).

And what should companies do?

Pundits have spotted this discussion. There are calls for changes in companies’ approach.
In a blog for Harvard Business Review, Justin Fox writes about how Michael Porter is using Davos to tout his ideas for a new form of capitalism, which Porter has laid out in an HBR http://hbr.org/2011/01/the-big-idea-creating-shared-value/ar/1 called The Big Idea: Creating Share Value.

In his article in the current issue of HBR (good timing for Davos attention), Porter says the capitalist system is under siege and that “business increasingly has been seen as a major cause of social, environmental, and economic problems. Companies are widely perceived to be prospering at the expense of the broader community.”

He says that the more business has begun to embrace social responsibility, the more it has been blamed for society’s failure, and links the loss of trust to government policies that damage competitiveness.

Porter says “the solution lies in the principle of shared values, which involves creating economic value in a way that also creates value for society by addressing its needs and challenges.”

It is not CSR, philanthropy or even sustainability, but a new way to achieve economic success placed at the center of business thinking.
Sounds worth pondering – and Porter’s urgings dove-tail nicely with the propositions of Messrs Medvedev, Sarkozy and Cameron and the caution of Mrs. Merkel.

On the international policy front, there has been a lot of talk in Davos this year about reinvigorating the Doha Round of the World Trade Organization.

Peter Sutherland – the chairman of Goldman Sachs who once headed the WTO just after it had stopped being the GATT (in Reuters in my day, we called it the general agreement to talk and talk) – said Doha was crucial to get the wheels of commerce going again.

But the day-to-day reality of real tensions and politics is never far away.

On the sidelines of her speech, Merkel had wise things to say about the protests in Egypt that threatens Hosni Mubarak’s 30-year hold on power.
She said that she has appealed to Egypt to allow peaceful protests, open up the Internet again, let jailed protestors go, hold a peaceful dialog.
“The stability of the country is of utmost importance, but not for the price of the freedom of opinion,” said Merkel, who grew up in Communist East Germany.

And the New York Times Nick Kristof tweeted: “What are we reporters doing here in Davos, should be in Egypt.”

Light relief came from an unexpected side during a very earnest debate about how to live more healthily.

UN Secretary General, Ban Ki Moon, who usually doesn’t cause people to giggle, managed to inject real personal, cultural perspective and humanity into the panel.

“When I grew up in South Korea in the 1950s, any successful man was fat. That ideal has now changed,” he said.

And finally, outside the WEF cocoon, publicly accessible side events which the WEF began organizing to show the annual meetings are not a secret, elitist cabal, prove popular for visitors from the real world – mostly locals.

A Swiss lady – who didn’t give her name – told Swiss radio she has been coming to Davos each year since the first WEF 41 years ago.

“In those days, in the beginning, it was all open. We walked in and out and listened to the proceedings and spoke to delegates.”

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