Conference Of Top World Leaders Worries Over Economic Slowdown

Posted: January 26, 2001

DAVOS, Switzerland — Last year, when the world's global power elite met in this small ski resort for the annual World Economic Forum, they celebrated the seemingly inexhaustible boom of America's high-tech economy.

What a difference a year makes. In 2001, this gathering of 1,000 top executives, plus academics, ministers and world leaders, is unnerved by America's faltering economy. And everyone is buzzing uneasily about the capabilities (or lack thereof) of a new U.S. president who didn't come. Not one of George W. Bush's senior administration officials is here - because the meeting follows so closely after the inauguration.

The shift in mood is so sharp you can almost taste it. But that's what makes the World Economic Forum so fascinating. Like a barometer, it charts the emotional shifts of the powerful in a changing world where the economic and political rules are still being rewritten. In Davos, you can learn which countries are hot, which ones are not, which economic or political crises are brewing.

And this is the best place to find out how the business community is reacting to the backlash against globalization - the term for the progressive interlinkage of the world's economies that has enriched the West and many poor nations, but left a much larger number way behind.

So I offer my summary of what's IN in Davos this year, gleaned from roaming the intimate conference hall, where you bump into foreign ministers or Nobel Prize winners in little cafe nooks or on the stairways.

Bill Clinton is still IN, maybe because his name invokes the rosy American economic picture that prevailed until last November. One delegate recalled with enthusiasm how executives staged a sit-in when Clinton's security men tried to evict them from the plenary session last year to make room for the president's entourage. A rumor surfaced that Bill had asked to return this year (it was untrue: Ex-presidents aren't invited), and several delegates suggested he come back next year as a spouse - of Sen. Hillary Rodham Clinton.

George W. Bush is IN, in absentia, because everyone here is desperate to know what the man is made of. A table of Spanish, Chilean and Saudi executives inquired whether he was as smart as Ronald Reagan. The most often-asked question was "Who will be running America?" Too bad W. couldn't come in person and set them all straight.

Uncertainty is IN about the 2001 economic forecast. The booming U.S. economy of the late 1990s powered Asia's recovery from the 1997-8 crisis, and neither floundering Japan nor Europe can provide an alternative engine. Many experts here think the United States is headed for a slowdown, not a recession. But the Davos crowd is sobered by its failure to foresee the U.S. downturn, just as no one here foresaw the Asian economic crisis coming.

This is a salutary reminder of the unpredictabilities of a globalizing world.

Demonstrators are OUT. Way out. Security at the center is tight, and Davos has banned antiglobalization protesters who marched last year and trashed shop windows.

But, in the most interesting development in Davos this year, social consciousness is IN. The WEF organizers, who have long pushed delegates to consider how to confront globalization's downside, christened this year's session "Bridging the Divides." They defined this as the divide between developed and developing countries that can't take advantage of open markets, and the divide between "those who have access to information technology and those for whom the Internet is still a very distant dream."

Many of the issues that antiglobalization demonstrators incoherently brought to the streets at Seattle or elsewhere - about the impact of the new global economy on labor standards or the environment or diseases - are now being debated inside the forum's halls. Protest group leaders and representatives of nongovernmental agencies are on the panels. This is more practical than trashing McDonald's - it brings the debate directly to business leaders.

When I first attended Davos in 1996, panels on the downside of globalization were sparsely attended, mostly by spouses of executives or academics. This year the opening plenary featured Indian and Brazilian ministers telling a pretty full house that the West must open its markets to Third World agriculture so poor countries can benefit from open markets and globalization.

The most interesting trend to watch this year will be whether corporate executives now feel it is in their self-interest to discuss, and act on, such social concerns.

Trudy Rubin's column appears on Wednesdays and Fridays. Her e-mail address is

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