Comment: What the World Economic Forum is really all about

Next month (September, 2009) the World Economic Forum (WEF) arrives in the Chinese city of Dalian for the annual meeting of the “New Champions”. It is a meeting reserved for “chief executive officers and board-level executives of WRF Member companies and special guests”. In June, it was the turn of Cape Town for the annual Africa gathering, hosted by President Jacob ZumaJacob Zuma.

Unlike the Cape Town meeting, Dalian is unlikely to see any protests about the WEF. There were pickets outside the Africa venue, organised by the Congress of SA Trade Unions, the labour movement member of the governing alliance, led by Zuma. This official acceptance on the one hand, and rejection on the other, highlighted the myth of the WEF — and how successful this Swiss-based body has been in projecting an image that is, in effect, a fiction.

Even the World Bank timed the release of its 2009 Africa Competitiveness Report to coincide with the opening of the Cape Town gathering. This added to the public perception that the WEF is some kind of broad-based international institution representing the economic policy interests of the world at large.

But it is anything but. Despite its official-sounding title and acceptance by most powers that be, the WEF is no offshoot of the United Nations any more than it is a representative organ of the teeming masses who inhabit this planet; quite the contrary, in fact.

By its own admission, the WEF is a private club of mainly men who head 1,000 of the richest companies on the globe. It is these companies, each of which has an annual turnover of about R35 billion ($4.8 billion), that finance the WEF.

Other “strategic” and “industry” partners of the WEF, companies that record their annual turnovers in multi millions of dollars and which are leaders in their fields or regions, also make financial contributions. It is these that enable this club of the super rich to stage what critics see as a series of circuses around the world that are designed to bribe, flatter and sometimes bully politicians and their governments into pursuing policies that do not harm private capital.

All of this, according to the WEF, is with the aim of the club to be “...the creative force shaping global, regional and industry strategies; the catalyst of choice for its communities when undertaking global initiatives to improve the state the world”. This is done by having developed “an integrated value chain by involving world leaders in communities, inspiring them with strategic insights and enabling them through initiatives”.

But such high-sounding aims ring hollow to those who see the very members of the WEF and the system they continue to promote, as the cause of the present global crisis and the horror it has sown and is continuing to sow. As the International Trade Union Confederation (ITUC) sees it, the policies promoted by the likes of the WEF amount to “the gorilla in the living room of globalisation”.

Earlier this year, ITUC president Sharon Burrows categorised these policies as “a massive rip-off of wealth”. She added: “A tiny cohort of the world's richest people [are] creaming off vast amounts of money while incomes for the great bulk of the worlds’ population are stagnating or falling.”

At the head of that “tiny cohort” are, of course, the members of the WEF whose major annual gatherings take place in the Swiss resort town of Davos. Many critics claim that this is a venue that, in the words of the economist John MaynardJohn Maynard Keynes, promotes “the extraordinary belief that the nastiest of men for the nastiest of motives will somehow work for the benefit of us all”.

Of course, the members of the WEF, including billionaire Swiss founder and executive chair, Klaus Schwab, are probably not nasty; they are merely trapped in a system that now has the nastiest of consequences for the growing legions of the world’s poor. And their promotion of dog-eat-dog competition — under the euphemism, “entrepreneurship in the global public interest” — qualifies as a nasty motive because of its consequences.

The Keynesian proposition is, therefore, correct: the causes of a problem cannot provide a solution. Yet that is the claim of the WEF whose Davos gatherings involve government leaders, opinion makers, including journalists, and various celebrities, such as Bono and Bob GeldofBob Geldof who have added charitable works to their career choices.

The pop stars have been labelled window dressing, as have former United Nations secretary general, Kofi AnnanKofi Annan, former British prime minister Tony BlairTony Blair, and Queen RaniaQueen Rania of Jordan who are members of the WEF foundation board, along with some of the most powerful big business figures.

Davos has also played a role in South African economic policy. It was at the annual Swiss meeting in 1993, that Nelson MandelaNelson Mandela and his economic advisors discarded the redistributive policies drafted by the now governing ANC’s Macro Economic Research Group (Merg).

That policy document — inadvertently leaked — was to have been presented at Davos, but was considered “too radical” and an anodyne statement took its place. At the same time another ANC team, set about drafting what emerged in 1996 as the controversial Growth Employment and Redistribution (Gear) proposals.

These proposals, that set targets described by one economist as “a cascade of improbabilities”, were fully in line with the philosophy of the WEF, in that they were designed to create a “business-friendly environment”. As the combined South African trade union movement has pointed out, the result has been a growing wage and welfare gap, something the Merg researchers predicted.

But there is one expressed belief of the WEF with which the labour movement and other critics are in full agreement: “That economic progress without social development is not sustainable, while social development without economic progress is not feasible.”

The difference is that the policy choices of this club of the super rich are seen by critics as a recipe for barbarism, when what is required is a thoroughgoing transformation of the very system that created and sustains the often obscenely rich at the expense of the majority.