Business, Finance & Economics

Inside Davos


DAVOS, Switzerland — Thomas Mann's 1924 classic novel, "Der Zauberberg" ("The Magic Mountain"), begins with a young man traveling by rail to Davos, in the Grisons. The "thrilling part of the journey" is the "steep and steady climb" though the passes and the crisp mountain air of the Swiss Alps. His destination: "The International Sanatorium Berghoff."

The rail journey today is just as thrilling, but the business of Davos back then was tuberculosis. Today it's alpine sports and conventions.

For one week every year at the end of January, the town is transformed to host the World Economic Forum which, with its unrivalled convening powers, gathers the great and the wannabees from the world of business, with a smattering of kings, queens, government ministers, politicians, religious leaders, NGOs, journalists, entertainers, academics, Nobel laureates, a few novelists and a musician or two.

This year no less than 44 chiefs of state and heads of governments will be in residence, and, as the forum's founder, the Swiss-German economist Professor Klaus Schwab, says: "It is a time of crisis and unprecedented uncertainty, even fear, but also a time of opportunity."

The behind-the-scenes security of the efficient Swiss will be formidable. Helicopters will be shuttling VIPs from and to Zurich's international airport, and the usual fleets of sleek limousines are at the ready. For businessmen this is not an inexpensive gathering. The tab is about $40,000 give or take a few grand. Lesser mortals, such as journalists, don't have to pay to participate. Forum sources say that the fall-off, given the desperate state of the economy, is not as great as might be feared, and the total number of participants will number about 2,500. But there are far fewer American bankers coming this year.

This is not a ski holiday for CEOs, however. The forum puts you to work with seminars, lectures and panels that start early in the morning and go on into the night. It is a chance for businessmen to meet their colleagues and be exposed to other points of view than normally come up in boardrooms. It is a chance to meet and talk to world leaders and colleagues from other countries in an informal setting. This year I already have an invitation to attend a breakfast with Pakistan's prime minister, Yousaf Raza Gilani and lunch with Mongolia's president Nambaryn Enkhbayar. Vladimir Putin is expected to attend, Jordan's King Abdullah often does, as well as Palestine's Mahmoud Abbas. Israel's Shimon Peres is a regular, as were U.S. Sens. Joe Biden and John McCain, but they won't make it this year with so much work to be done at home. The forum had hoped for a video hook up with President Obama, but that is looking very unlikely.

Former President Bill Clinton loves Davos so much that he started up his own rival forum, and there is a ski run here called "Hillary," just because she once skied here. "We Europeans like Hillary very much", said Ute Koller, whose hotel will soon be taken over by the forum participants. She, like so many Europeans, is enthusiastic about Barack Obama.

Former President George W. Bush never came, but he did send former Vice President Dick Cheney one year and his secretary of state Condoleezza Rice another. This year most of the Americans who have jobs with the new administration are not coming. National Economic Council Director Lawrence Summers and National Security Advisor James Jones cancelled at the last minute.

The ethos is ski-resort informality with ties discouraged during working sessions. I used to find it odd to see falcon-faced Saudi princes dressed in apres-ski sweaters. Because there are no big-city distractions, participants are thrown together, "committed to improving the state of the world, " which is the forum's motto. The theme this year will be "shaping the post-crisis world."

The financial meltdown is destined to dominate discussions here, for if Davos is the beating heart of capitalism, there will be symptoms of arrhythmia felt in this valley.

Much of what goes on here goes on in out-of-view meetings over late night drinks. There was a time when Palestinians and Israelis could move the ball a bit forward at the forum. A few years back Iranians started coming to test the waters. When the Soviet Union collapsed, inheritor states, "the stans" as the countries of Central Asia are sometimes called, came here to learn how the capitalist world worked.

Harvard and Yale always have an evening reception, and this year Oxford is having one too. In recent years the Chinese and the Indians have been prominent as their economies grew, and last year there was very much a sense of the torch being passed from West to East with the rising economies of Asia. This year's recession is sinking all boats, however.

The forum, now in its 39th year, is Schwab's brain child. He perceived the power of business to change the world for the better, if it could be harnessed. There are regional satellite forums now around the world, and although Schwab's concept has been much copied it has never been bettered as a forum of ideas for those who do much of the world's work.