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There is a growing consensus, among the young and the old as well as across developing and industrialized countries, that we are experiencing a transformational economic crisis - one that is on course to fundamentally change globalization well beyond the domain of international finance. We face a destructive social backlash that could foment political instability, revive economic nationalism and reverse development gains should our leaders fail first to develop effective solutions to the current economic crisis and then fail to manage the growing roster of global risks such as climate change, non-proliferation and food security. This realization is was what compelled over 2,000 leaders from government, industry, media and civil society to convene in Davos- Klosters, Switzerland to begin the task of collectively shaping this transformation. The following report of the 39th World Economic Forum Annual Meeting, which took place from 28 January to 2 February, distils the outcomes and observations that emerged from the Meeting.
I would like to take this opportunity to highlight some of the Annual Meeting's objectives, which I hope will not only provide additional context about this year's programme but will also explain the Forum's agenda for the rest of the year as much work remains to be done to sustain them over the longer term. One objective that was achieved was to give support to governments and governance institutions - particularly the G20. Davos is only the starting point of a long and difficult road ahead. However, by bringing world leaders together, we have arrived at a better understanding of the origin of the economic crisis and the steps we need to take to relaunch the global economy. Hearing the perspectives of four G8 governments and supporting the dialogue of the G20 process in the run-up to the April summit in London were important first steps. By convening key trade ministers from 17 economies plus the 27 - member EU to deter "beggar-thy-neighbour" policies, the aim was to create broad-based support to counter protectionist sentiment from building. Moreover, we underscored the need for a more collective, global approach to the crisis by bringing together the Chair of the G20, United Kingdom Prime Minister Gordon Brown, with heads of governments of G20 members from Africa, Asia and Latin America to address systemic financial risks and to restore stability in the world economy.
Discussions in Davos also convinced me more than ever that the solutions to climate change must be among the drivers of the eventual economic recovery. Indeed business is now starting to "hardwire" climate change into their plans going forward - green technologies can no longer be an "add on" or be considered as creating a fringe industry. This is a very pertinent discussion for 2009. In December of this year, the successor to the Kyoto Protocol on climate change is scheduled for negotiation at the Copenhagen Conference. The plans for world economic recovery linked to the jobs, skills, investment and technology opportunities that a global low-carbon economy requires, must become a reality if climate change is to be managed successfully. Green technology can become a clean engine for renewed growth. The days of debating "alternative" energy are over - only sustainable energy will fuel the economy of the future. To this end, industry leaders in Davos agreed to move forward with half a dozen specific initiatives to accelerate the integration of sustainable practices into business.
One of the key outcomes from Davos was that, despite the economic turbulence, people chose to come together in record numbers from industry, government and a range of other stakeholders to discuss the global challenges the world is facing and to respond together to such challenges. This willingness to work together, across geographies and across all sectors from business, politics and civil society is what will I hope distinguish this current crisis from the one of the 1930s. The collective sense of cooperation and determination that was visible in Davos is what gives me the optimism that we can work our way out of the present crisis. It is easy to dismiss this as wishful thinking but if we have learned one thing from the current crisis, it is that trust and confidence will drive the recovery.
However, restoring trust and confidence will require an honest and deep review of our underlying values and ethics. Business needs to look deeply at their systems of remuneration and governance. Industry leaders, policy-makers and regulators, as well as consumers all have to consider the damage wrought by excessive greed. In today's highly interdependent world, the pursuit of short-term gain is not a sufficient driver of optimal decision-making. The systemic and intergenerational impact of our actions now are more important than they have ever been before - our ethics, as well as our governance institutions and regulatory systems, must somehow reflect this new reality. The 39th Annual Meeting was just the beginning of the search for new solutions - the real work starts now.
Klaus Schwab
Founder and Executive Chairman, World Economic Forum |
