Opinion

Mohamed El-Erian

Davos at a distance

By Mohamed El-Erian
January 17, 2012

I’ve never been to Davos, despite attempts by many over the years to persuade me to go. Don’t get me wrong. I understand that it is a special event for many people, and for many reasons. It is anchored by wide-ranging and engaging agendas, and participants get to mingle with a global cornucopia of important people. It is also the place to see and be seen for heads of state, politicians, academics, thought-leaders, media pundits, CEOs, and movie stars.

The annual meeting of the World Economic Forum in that intimate setting remains one of the year’s hottest tickets, but its organizers want their event to be much more than what it currently is—a big, prestigious talk-shop. They want it to influence policy at the national, regional, and global levels.

Yet, over the years, and in the context of an increasingly unsettled and uncertain world, Davos has not had much impact.

I get a range of responses when I ask attendees why so few, if any, of the interesting discussions that have taken place in those beautiful Swiss Alps have led to change that improves the lives of most people.

Some say the strength of the typical Davos agenda is also a weakness. The topics are overly ambitious. In trying to cover too much for too many, breadth trumps depth.

Others cite the inherent difficulty of distilling the opinions of such a varied group of people into specific action points. This is never an easy endeavor, and it becomes a virtually impossible one when it involves so much wealth and so many egos.

Then there are those who believe that too much time is spent arguing about what has happened—especially when things have gone horribly wrong—and too little time is devoted to what lies around the next corner, and the one after that.

But most of the Davos devotees I talk to say the problem is more fundamental. They say that many of the attendees who truly matter are not interested in the organizers’ higher ambitions, and some are even suspicious of them. In either case, these key players do not want to give up control of their narratives, and they certainly do not wish to delegate any meaningful part of their personal agenda to Davos.

It will be difficult to overcome these obstacles unless Davos organizers make major changes. Specifically, they need to do two things that no one who puts on such events has seemed willing or able to do.

First, they must revise how Davos’s agendas and discussions are structured.

To be more productive, more useful, they need to be much less inclusive at some key moments. Very difficult (and highly delicate) decisions have to be made about who to involve in certain meetings and who to exclude. This would require additional (and closely monitored) status levels for participants, which could only be implemented by changing the World Economic Forum’s current role of convener/facilitator into a much stronger one of super-conductor/enforcer.

Second, key participants must truly collaborate—something that has not happened. This lack of collaboration has been particularly costly at a time when the world teeters on the brink of an economic abyss.

Shared interests must come with a greater sense of shared responsibilities. Narrowly focused national agendas must develop greater peripheral vision, and mutual assurances must be supported by credible peer reviews. The probability of these things being done is small, if not de minimis.

I am not happy about this. Given the global changes in play today, there is an enormous need for better coordination and understanding among those who influence developments in critical areas. This world has lost many of its economic and socio-political anchors, and leaders are finding it impossible to keep up with developments on the ground. Suspicion too often displaces mutual trust, which is why this prestigious gathering will continue to fall short of its vast potential.

Even if nothing really consequential gets done there, Davos will remain a hot ticket, but I will not be going.

 

Comments
14 comments so far | RSS Comments RSS

Forget Davos. The Rockies got a foot of powder in the last two days. Vail, Aspen, Copper, Breck, coming into prime. Anyone going to Davos to do anything but ski is not really all that bright to begin with. The really rich and powerful send their minions to the meetings, then go hit the slopes.

Posted by ARJTurgot2 | Report as abusive
 

Davos provides an opportunity for people to meet in relative anonymity and confidentiality, beautifully structured to provide an unbreakable cover of apparent informal coincidence, in order to reach agreement and seal deals, observed only casually chatting in hallways and at parties. It is a virtually perfect meeting ground of absolute confidentiality, covered in the appearance of coincidence and spontanity, and deals are made every year at Davos that affect millions of ordinary families around the entire world. That is why attendance is worth the price of admission, and it is the only reason.

There is no mystery in why the CEO of PIMCO doesn’t know the reality, since no one would ever desire or intend to make such a confidential deal with him in the mileau of coincidence. All he would ever see would be the mist of the superb cover, never the action taking place inside it.

Posted by FirstAdvisor | Report as abusive
 

Davos is really like a fashion show, organized by a Swiss-German with abig ego. There you’re absolutely right.

Posted by hariknaidu | Report as abusive
 

Dear Mohamed,

There are assumptions in your eloquent critique I wish to challenge, concerning the value of exclusivity and the responsibility for idea implementation.

I have attended a dozen or more WEF Davos annual meetings.

I invariably come away with at least one interesting encounter, one interesting idea from the intellectual cornucopia that WEF invariably assembles for the annual meeting. It is up to me, not WEF, to find them in the climactically cold but intellectually hot Davos programme.

After that, it is again up to me, not up to WEF, to make something of what I have found. Sometimes I have. When I haven’t the fault is mine in not converting resolutions made in the heady Davos air into sea level action; but, the fault is not WEF’s. You suggest more exclusivity. But a small hypermarket is an oxymoron. Davos is not Ditchley Park or the Trilateral Commission or The Pilgrims Society. And, even the CFR keeps getting bigger. So, embrace breadth and come join us, the diverse multitude. You would be a most welcome addition.

Best regards,

Ron Freeman

Posted by ronaldmfree | Report as abusive
 

This is the time in Davos for beautiful young women to hit the ski slopes (and heated whirl pools and saunas), and (literally) run in to some millionaire captain of industry.

And, I’ll bet WEF is better than Christmas for the high-end escort services.

Money, money, money.

Posted by Parker1227 | Report as abusive
 

Not much of an agenda from Mr. El-Erian.

If the Davos monied and powered elite will simply agree to change the nature of the discussions from “what can we do?” to “who’s doing what?”, and with an accompanying sine quo non commitment to something called collaboration in doing whatever that is, and being, of course, conducted and enforced as is necessary, then Mr El-Erian might attend his first session of the New Davos.

Mayhaps the problem is that the many years of discussions have not provided the necessary solutions because of the reality of the moment, which is that the monetary systems of the world’s national economies are essentially insolvent.

And we do need a new way out.
Mr. El-Erian would like to do the job of the JP Morgan of today. Only much more sophisticated.

I somehow doubt that his solution will be much different than other investment bankers.

The problem is the money system.
It is based upon un-payable debt.
Were the money system not debt-based, then we could have more money, or a higher quantity of the national circulating media to provide exchange of commerce, without more debt.

Can we have money without debt?

Posted by joebhed | Report as abusive
 

WEF at Davos – an extraordinary event that produces absolutely nothing of economic value. In fact, all the preceding meetings running up to 2008 did not foretell the mother of all destruction in the financial world. Instead, its all surreal make believe that the world needed esoteric financial gambles. Countries that participated in these meetings were all sucked in by the leadership of connected well being – primarily lemmings. So much, for world leaders.

Posted by rissey | Report as abusive
 

Developing Countries need to watch the WEF closely to learn the mistakes of the industrial countries avoid those mistakes to their country and be brave to do the opposite on what came out on the forum.

Posted by BhayuPur | Report as abusive
 

Excellent points.

Posted by Intriped | Report as abusive
 

How interesting that the issues of this “financial power thinker” lollapalooza…are exactly the same issues as the “Occupy” movement.

Posted by badartist | Report as abusive
 

Davos is networking, it’s where politicians can officially meet with their paymasters, it’s where wannabes and slimey fake businessmen run aroundtrying to sell themselves. And it’s full of something that rhymes with pull grit. The WEF does do some decent research, but it is a business enterprise, let us never forget that. The statistic I would like to see is how many jobs did those billionaires eliminate in the past 5 years.

Posted by Talleyrand02 | Report as abusive
 

I respectfully disagree with Dr El Erian. I will attend my 15th WEF annual meeting at Davos, this week. Every meeting has generated new opportunities, new ideas, new contacts. Then, it’s up to me to follow through, to turn Davos contacts into lasting business relationships, even friends and to execute the ideas and opportunities. Dr El Erian recommends more exclusivity, i.e., fewer participants. No. Intelligence and insight is not limited to the prominent. He suggests WEF is responsible for idea implementation. No, again. Its up to the participants. A responsibility I have long and profitably accepted.

Posted by ronaldmfree | Report as abusive
 

Davos wanted to double debt in 10 years. Yes, I mean world debt. And that was in 2011.

Posted by bgamall | Report as abusive
 

Humankind is presented with an incredible and unprecedented situation. We are spectacularly successful at doing something potentially ruinous of all we claim to be protecting and preserving by ever increasing natural resources exploitation and continually increasing food production. Stupidly we hold fast to a wicked delusion that, if we do NOT do these things, a catastrophe will follow. This upside down, delusional thinking is leading us to precipitate a disaster of some unimaginable sort because the continuous exploitation of limited resources, including continually increasing food production to feed a growing population, is precisely what is actually causing humanity to careen toward a colossal global ecological wreckage.

Posted by stevensalmony | Report as abusive
 

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