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Banging the drums at Davos
Meanwhile, far from the dusty streets of Tunisia and Egypt, was a different kind of crowd. Making a different kind of noise. Nested in the eastern corner of Switzerland is the ski resort town of Davos whose claim to fame is the annual World Economic Forum, a foundation set up by Klaus Schwab, a professor of business at the University of Geneva.
According to Wikipedia: "The foundation is funded by its 1,000-member companies, the typical company being a global enterprise with more than five billion dollars in turnover, although the latter can vary by industry and region. In addition, these enterprises rank among the top companies within their industry and/or country and play a leading role in shaping the future of their industry and/or region. As of 2005, each member company pays a basic annual membership fee of CHF 42,500 and a CHF 18,000 annual-meeting fee which covers the participation of its CEO at the annual meeting. Industry Partners and Strategic Partners pay CHF 250,000 and CHF 500,000, respectively, allowing them to play a greater role in the foundation's initiatives....Industry Partners come from a broad range of business sectors, including construction; aviation; technology; tourism; food and beverage; engineering; and financial services. These companies are alert to the global issues that most affect their specific industry sector."
Davos, by any stretch of the imagination, is not an ordinary street gathering.
It is a meeting of the successful and the well-connected banks and multinationals who meet with heads of global institutions and governments to discuss topics that are of interest to them. Yes, there is the presence of the NGOs but the TV channels and reporters covering Davos don't meet the noisy tin-bangers. They are there to cover the money-clinkers.
And this year the money-clinkers were happy. According to Bloomberg.com, "as the Wall Street chief executive officers flock to the World Economic Forum will be breathing a sigh of relief along with the Swiss mountain air: There are no panels on compensation or redesigning financial regulation. After spending much of last year's meeting defending the industry and debating proposed rules, bankers plan to focus on wooing clients and winning business, according to executives at three Wall Street companies, who spoke anonymously because they weren't authorized to comment publicly. The bankers will be coming to Davos, Switzerland, with a renewed sense of confidence. JPMorgan Chase & Co.'s profits last year were the highest in the bank's history, and Citigroup returned money to the U.S. Treasury and reported its first full- year profit since 2007. Governments have so far opted against breaking up or levying extra taxes on banks deemed too big to fail, and the Basel Committee on Banking Supervision, which sets global financial-regulatory guidelines, isn't requiring lenders to meet new capital standards until 2015."
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Watching and listening to some of the sessions of the World Economic Forum at Davos on their web site is indeed disarming. I happened to hear Chanda Kochhar, the CEO of ICICI, talk about not only redistribution of wealth but also giving the opportunity for others to earn their own wealth. The 12 million people coming into the job market every year need to get educated and get a job - a point that readers of the Honest Truth are aware of. A gentleman from the University of Michigan said that "Davos is a collection of grey men, in grey suits, with grey hair" but he was impressed that there was an unusual panel discussion he was attending (founders of NGOs talking about inspiration). The founder, chairing the session, was happy with that comment but confessed that "in Davos we have to deal with economic issues and financial issues."
This year the focus on Davos has been "inclusive growth". In the past, Davos has discussed climate change. Davos has discussed "sustainable growth". Davos has discussed "corporate governance". Davos has discussed the financial crisis and the role of the banks and Wall Street.
Davos has discussed and discussed.
But every year the bigger companies get bigger and more powerful.
They grey suits get greyer and the world hurtles onwards towards economic inconsistency.
Is there an alternative? Sure is.
Break the comfortable friendships between companies, regulators, and governments.
Let the benefit of the consumer, the depositor, and the investor be the focal point of any decision.
If governments and regulators focused on that, the grey suits at Davos would be in sombre and sober moods. Companies would still earn profits - and they should. But the aam aadmi would be able to afford the membership fees to get ringside seats into this exclusive club and ensure that they do not carve out global resources and global opportunities in private friendships.
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