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from Davos Notebook:

In crowded Davos, keeping VIPs happy is no easy task

How do you keep VIPs -- hundreds of them -- happy?

You can’t, especially at the World Economic Forum. There's no point in pulling that "Don't you know who I am?" line here at the annual Davos gathering, which is attended by hundreds of the biggest corporate and political bigwigs.

Aides to Pakistan’s Prime Minister Yousaf Raza Gilani (including Commerce Minister Makhdoom Amin Fahim) and officials traveling with Kazakh President Nursultan Nazarbayev were visibly upset after they were refused entry into the opening plenary session. Before the same event, Senegal's president Abdoulaye Wade and his aides were made to stand around for 15 minutes or so.

Later in the week, Belgium's prime minister, Herman van Rompuy, was pushed aside by bodyguards to make way for British Prime Minister Gordon Brown.

Every morning, there are long queues at the security screening on the way into the conference, and CEOs who are used to whizzing past barriers must wait patiently for their turn like the rest of us.

"The forum has outgrown this place," one participant told Reuters.

from Davos Notebook:

The answer, dear bankers, lies not in yourselves, but in Shakespeare

Many of the bankers blamed for the world financial crisis have been conspicuous by their absence from this year’s World Economic Forum in Davos.

They haven’t just missed conventional debate on how to prevent a re-run. They’ve also skipped the chance to hear Richard Olivier, theatre director and son of acting legend Laurence Olivier, draw comparisons between the masters of the universe and Shakespeare’s murderous tragic hero Macbeth.

“Macbeth didn’t set out to be evil,” Olivier told Reuters. On the face of it, he was the kind of bright, ambitious young man who could be trusted with big investment decisions. Equally, Lady Macbeth, who stands for “the familial culture of an organisation” thought she was just nurturing his career.

The positive role model is the low-key Malcolm, who, after all the bloodshed, quietly and without ego, ushers in a new order at the end of the play.

Olivier’s sessions in the Swiss ski resort have also focused on sustainability, with the help of Shakespeare’s comedy "As You Like It," which distinguishes between the oppressive world of the court and the creative, collaborative forest.

“People cut off from nature will make unnatural decisions,” is the message it holds for the chastened business elite, says Olivier, whose company Olivier Mythodrama gives Shakespearean lessons in business leadership the world over.

He is suitably modest about audience reaction, but his wife Shelley Olivier says he receives ovations that would have made his father proud.

from James Saft:

Save capitalism from the banks – Nassim Taleb

Nassim Nicholas Taleb,  the author of  "The Black Swan: The Impact of the Highly Improbable", has a simple proposal to as he puts it, "save capitalism and free markets from the banks."

Nationalise the banks, limit the rewards to those who work in what he calls the "utility" part of the system and have a completely uninsured second leg that can take all the risks it wants and lose its shirt, he said in an interview in Davos at the World Economic Forum.

"They rigged the game. We pay them for their profits, there is no clawback so their incentive is to hide the risk they are taking."

"Which is why eventually as someone who loves free markets,  a total nationalisation of the part of the business that requires insurance and does clearing and payments needs to happen."

"I am angry with U.S. policy. What we had is exactly the opposite of socialism, they got TARP to pay their bonuses and to take more risk."

He describes his plan as Capitalism 2.0. It would have a barbell structure, with the insured utility-like part on one end and the free market bit with privatized risk on the other.

from The Great Debate:

Save capitalism from the banks – Nassim Taleb

[CROSSPOST blog: 111 post: 46]

Original Post Text:

Nassim Nicholas Taleb,  the author of  "The Black Swan: The Impact of the Highly Improbable", has a simple proposal to as he puts it, "save capitalism and free markets from the banks."

Nationalise the banks, limit the rewards to those who work in what he calls the "utility" part of the system and have a completely uninsured second leg that can take all the risks it wants and lose its shirt, he said in an interview in Davos at the World Economic Forum.

"They rigged the game. We pay them for their profits, there is no clawback so their incentive is to hide the risk they are taking."

"Which is why eventually as someone who loves free markets,  a total nationalisation of the part of the business that requires insurance and does clearing and payments needs to happen."

"I am angry with U.S. policy. What we had is exactly the opposite of socialism, they got TARP to pay their bonuses and to take more risk."

from Davos Notebook:

Even in crisis, NGOs pull no punches in Davos

Though a financial crisis and global recession have left many of the world's biggest companies uncharacteristically humbled, that didn't stop NGOs from taking shots at a few of them at the World Economic Forum.

U.S. gold company Newmont Mining and Swiss utility Bernische Kraftwerke picked up a couple of pretty dubious honors from Greenpeace Switzerland and the Berne Declaration.

Newmont received two awards -- the Global Award and People's Award -- for its mining project in eastern Ghana. According to the NGOs, Newmont "is ignoring the environmental and social damage" the planned mine will create.

"If the project goes ahead, 10,000 farmers will lose their land and livelihood and cyanide, used to extract the gold, will poison the soil, water and wildlife," they said in a statement.

Bernische Kraftwerke, on the other hand, received the Swiss Award "for pushing for the construction of a coal-fired power plant in Germany... Its plans blatantly contradict its self-promotion as a forward-looking company that promotes renewable energy and energy efficiency."

There was one positive award given out on Wednesday, for "most courageous employee of the year." Two Colombian union leaders, Jairo Quiroz Delgado and Freddy Lozano, shared that award for their fight for workers' rights at Colombia's El Cerrejon coal mine.

from Davos Notebook:

UAE Oil Minister forced to stay off Davos pistes

Deep, crisp and even -- some would say the best thing about this year's World Economic Forum is the quality of the snow on the well-groomed pistes above all the fevered debate.

But one prospective delegate who will not be enjoying them is the United Arab Emirates Oil Minister Mohammed al-Hamli, who has had to cancel his trip to Davos because of a lingering ski injury.

Sources said the minister injured both shoulders in a ski accident during a family holiday in November last year and had to have surgery, which can have only added to the pain of a steep fall in world oil prices.

from The Great Debate:

Building a three-legged stool

-  Lawrence Bloom is deputy chairman of Noble Cities and chairman of the World Economic Forum, Global Agenda Council on Urban Management. His views are his own –

The chaos generated by the meltdown of the global economic system provides environmentalists and human rights advocates with utopian opportunities to promote a new economic model, which will not only help sustain life on our planet, but actually increase its quality for many. As world leaders search for creative solutions to restore global equilibrium, the opportunity for recognising the importance of both human and environmental capital has perhaps never been so possible or achievable. Recognising all three types of capital: financial, environmental and human, will help us to build the equivalent of a balanced three-legged stool . Hopefully, this stool will be more stable than the current one-legged model of financial capital. Last week the United Nations Environment Program recommended the business world use the global downturn to press ahead with green technologies that will save firms money and help save the planet. It also recommended using micro-finance loans to help developing countries provide sustainable solutions in such places as Bangladesh where small loans have allowed women entrepreneurs to install solar panels and bring electricity to 100,000 homes. Society has been operating on the belief that if the engines of capitalism are powered to churn constantly, wealth will prevail and all of human society will benefit. But this system has served to create great income disparities by generating incredible wealth and incredible poverty, and has been the main driver in causing catastrophic environmental damage. The unregulated, trickle-down financial policy is necessary to generate positive GDP figures, but traditionally these data do not include the cost of rainforest or biodiversity loss. Thanks to the United Nations Green Economy Initiative, and the work being undertaken by Pavan Sukhdev and his colleagues who are engaged in the Economics of Ecosystems and Biodiversity project, we can now put GDP-like values on these losses. As a result, we are beginning to recognise that the credit crunch in the financial markets is a minnow in comparison to the credit crunch in our environment and biodiversity systems. It appears that we have been “borrowing” $2.5 trillion every year for the last 25 years without any significant compensating payback. Over time, we may acquire the wisdom to realise that what traditional economics considers “externalities”, as if they were irrelevant, are closer to our survival needs than the creation of economic wealth. The 90 pence we pay for a litre of petrol is divided between government tax and profit for the oil company, but who picks up the tab for the damage that is done by burning the fuel in the atmosphere? We privatise profit and we socialise loss. We need to start valuing people first, and then we will collectively begin to operate on the principle that the environment is not just another word for commodity market, but that it supports life. Valuing human capital means acknowledging that each person on this planet is entitled to fresh water, nutritious food, proper shelter, healthcare, education, justice and access to capital. This way we can release the creative potential of all of humanity. Only when we are clear on these values can we create a financial system that serves it. The current financial credit drivers are akin to the booster rockets on a space craft. In the same way as the boosters blast the craft free of the Earth’s atmosphere and gravitational pull, so the current financial system has created wealth, education and freedom for 1.5 billion people. But for many - the remaining 4.5 billion - the cost has been very great and to our ecosystems it has been disastrous. The skill in a space shot is knowing when to blow the explosive bolts, releasing the boosters and continuing the mission with the second stage only. Our skill will be in jettisoning our current economic model and designing a new and more inclusive “second stage”. What we should be talking about now at a strategic level is urgently restructuring our monetary system into a non-debt, or minimal-based debt structure using Sharia-type finance and complementary currencies with government spending money directly into circulation. In whichever way we choose as a society to tackle the global financial crisis, we must create a system that protects and nurtures all of humanity and the environment before it is too late. An inspirational quote attributed to a North American First Nations Chief Seattle states: “We are all connected like the blood that unites one family. Whatever befalls the Earth befalls the sons of the Earth. Man did not create the web of life, but he is part of it, whatever he does to the web, he does to himself.” These words written more than one hundred years ago speak directly to us today. Will we have the intelligence to listen?

from Davos Notebook:

Knowing one’s place in Davos

The big, big question for the hordes of journalists churning up the fresh, Davos snow is not how to end global economic turmoil, but where their hard-won World Economic Forum accreditation allows them to roam.

A record cast of more than 40 heads of state and government,  more than 30 finance ministers and central bankers, as well as 1,400 business executives, will be hotly pursued by 400 journalists, colour-coded into white and orange badge holders.

The 200 snow-coloured badges are the most highly prized. Anyone holding one is considered a participant, who can contribute to the great debate on setting the world to rights. They can follow World Economic Forum delegates anywhere, provided the security guards allow.

Their footsteps will be measured by pedometers handed out to every white-badge holder who enters the running for The-One-Who-Can-Walk-The-Furthest contest as they attend this year's relatively low-key dinners and comparatively demure cocktail parties.

Another 200 orange badge holders, whose footsteps will go uncounted but who did receive coveted WEF laptop cases, are allowed into press conferences and the Davos Congress Centre where the debates and panel sessions will unfold. But, orange badge holders will not be able to listen to the great debates. They will also be excluded from the best parties unless they can gate-crash their way in.

Last and definitely least, although not in number, is the army of "tech badge" holders, whose precise size has yet to be disclosed by blue-badged WEF officials when contacted by Reuters. They have extremely limited rights of access, and no pedometers or laptop cases -- but at least they have been allowed up the snowy mountain.

from Global Investing:

What a web we’ve woven

Thanks are due to the World Economic Forum for clearly  explaining the interlinked web of misery currently facing the world.  Make what you will of the details in the graphic below -- and if you can, please do let us know! -- but the overall impact really does spell it all out.

This Vonnegutesque cat's cradle, incidently, comes from the forum's new report, Global Risks 2009, released ahead of its annual meeting in Davos between January 28 and February 1. It shows an interlinked world facing a monumental series of interlinked risk, some of which  investors are having to confront for the first time.  Sheana Tambourgi, head of WEF's global risk network, explains the report in this video:

from Global News Journal:

“Frauenpower” at Siemens: another crack in the glass ceiling?

Siemens’ announcement this week that it has appointed a woman to its management board has generated a loud hullabaloo in the media, with newspapers trumpeting “the womanless age at Siemens is over” and “Barbara Kux, the strong woman at Siemens.”

But how was the news of a woman’s appointment to a senior executive position deserving of a celebratory press release and the ensuing excitement? Surely in an era of equal opportunities in developed countries, such news should be commonplace.

The fact that this news is not self-evident, and that Barbara Kux was the first woman appointed to Siemens’s managing board in its 161 year history, goes to show how far we have yet to go before women are equally represented at leadership levels.

Fifty-four year old Kux , who will be responsible for Siemens’s annual global procurement of 42 billion euros ($52.02 billion), will be one of a handful of women  on  the management board of a German blue-chip company. 

German management boards are notoriously white, male and middle-aged. As a young, female journalist in Frankfurt, it is hard not to feel like the odd one out at annual general meetings and corporate events.

Earlier this year, even Siemens' own chief executive said his company’s top management was too German, too white and too male for its own good.

“We are too one-dimensional,” Loescher told the Financial Times in an interview, publicly subscribing to the theory that a company that does not represent its customer base can not tap its full potential.