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Western Press Review: From Davos Emerges a Mix of Messages


By Don Hill and Esther Pan



Prague, 3 February 1998 (RFE/RL) -- The annual week-long gathering of the rich, learned and powerful known as the World Economic Forum finishes today in the Swiss winter resort of Davos. Different facets of the conference have attracted a flurry of commentary and analysis in the Western press.

SUDDEUTSCHE ZEITUNG: A couple of crucial factors have to fall into place if the whole world is not to catch the Asian flu

"The helplessness of the experts assembled for the World Economic Forum in Davos is almost tangible," commentator Nikolaus Piper writes today in the Suddeutsche Zeitung. Piper expresses concern that the Asian economic malady may be contagious still. He writes: "Although no one believes at the moment that the Asian crisis will turn into a crisis for global capitalism, this does not mean that it is in any way ruled out. At least bank experts and economics professors gathered in the Swiss ski resort are agreed on one point. A couple of crucial factors have to fall into place if the whole world is not to catch the Asian flu. Central banks in Europe and the United States must keep interest rates low. Japan needs to carry out an effective reform of its banking system.

"And, last but not least, China and Hong Kong must not devalue their currencies. This situation is unique. The stability of the world economy depends fundamentally on decisions that will be made in Beijing. At the moment, the Chinese yuan and the Hong Kong dollar are two anchors of stability in a crisis-shaken region."

LIBERATION: China plays the winner on all fronts

In the French newspaper Liberation today, Pierre Haski and Pascal Riche write from Davos in a news analysis that the Chinese are winning plaudits for their attitude. Haski and Riche say: "Li Lanqing, Chinese vice-prime minister and one of the architects of the economic reform, was the most popular man at Davos." The writers say: "His announcement that 'China will not fan the fire' has earned a torrent of enthusiastic applause." Liberation 's writers say: "China plays the winner on all fronts. It sees itself called the 'one pole of stability' in Asia, a spectacular turnaround for a country which two years ago provoked an enormously tense regional situation with Taiwan that provoked the sending of American aircraft carriers. All this is forgotten, and the experts gathered at Davos couldn't praise enough the new Sino-American entente and China's great sense of responsibility."

DIE WELT: The Asian financial and economic crisis placed its stamp on the Davos summit

The overriding effort at Davos is to project confidence, Die Welt's Martin Hausa comments in the German newspaper today. He writes: "The initiators of this year's World Economic Forum had originally planned nothing less than to define the priorities for the 21st Century. However, before the top business officials, politicians and academics could deal with the future they were forced to come to terms with the most recent past and the present. The Asian financial and economic crisis placed its stamp on the Davos summit and the signal going out from the WEF this year is create confidence.

"The strategy is obvious. The better the reforms prescribed by the International Monetary Fund for South Korea, Thailand, Malaysia or Indonesia measure up, the more calm will be brought to the turbulent markets, and the earlier can the appeal for confidence become a self-fulfilling prophecy."

NEW YORK TIMES: Most people here oppose capital controls, viewing them as unwarranted interference in free markets

In The New York Times today, Louis Uchitelle writes from Davos in a news analysis that earlier calls for a new international economic monitoring agency are gaining momentum, but the Davos consensus is that any such body should go without any regulatory powers. Uchitelle says: "The International Monetary Fund, looking for ways to avoid a future Asia-style financial crisis, may be moving in the direction of endorsing rules that would prevent another surge in foreign bank lending. Such a surge played a key role in the Asian crisis."

He writes: "There was wide agreement, for example, on the need for a monitoring system -- run by the IMF or some other organization -- that would track the finances of individual countries much more closely than any international agency now does. A rating system might also be developed, one that might prompt foreign lenders to raise interest rates for countries with poor credit ratings." Uchitelle writes: "But most of the people here oppose capital controls, viewing them as unwarranted interference in free markets. A global economy, they argue, functions on free and rapidly flowing capital."

WALL STREET JOURNAL: Russia's leaders have yet to come up with a new strategy for handling the latest crisis

Unlike China, staff reporter Neil King Jr. writes in an analysis in the Wall Street Journal Europe today that Russia is drawing wary looks at Davos. King writes: "If you think only foreign investors are skittish about Russia these days, listen to the locals. They're even more on edge. With money fleeing Russia and the ruble looking weak, the government is jacking up interest rates at the same time as Russian leaders here in Davos promise real economic growth this year."

King writes: "Had things not gone haywire in Asia, this year's World Economic Forum would have been a much sweeter event for Russia. Many were predicting that this would be Russia's year, that all the pain and turmoil would pay off with real growth." But, the writer says, "the Asian meltdown tossed that playbook out the window, and Russia's leaders have yet to come up with a new strategy for handling the latest crisis."

LE SOIR: On principal, one is not accepted without a business portfolio of half a million dollars

Writing yesterday in the French-language Belgian daily Le Soir, Pierre Lefevre assessed the demographics at Davos, as follows: "On Sunday morning, the eminent participants in the World Economic Forum at Davos stopped thinking about volatility. Instead, they competed in a grand slalom - participation obligatory - arranged specially for them, with champagne at the start and hot wine and raclette at the finish. For these skiers, their very presence at Davos testified to the substantial weight of their wallets. The club has a thousand members. On principal, one is not accepted without a business portfolio of half a million dollars. One must have decision-making power at the executive level, either number one or two. The annual dues are 12,500 dollars, not counting the cost of meetings." He wrote: "Last year, the founder of the Forum, Klaus Schwab, estimated that the members represented assets in excess of a million-million dollars." Le Soir's writer added: "Few women in the group. The executive class worldwide remains hermetically of the male sex."

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