Prague, 4 February 1998 (RFE/RL) -- The World Economic Forum in Davos has now ended (Feb. 3) and the world leaders who flocked to the Swiss mountain resort have now dispersed about their other business. This year's forum brought together some 2,000 participants from among the globe's powerful, rich and knowledgeable to ponder priorities for mankind in the new century.
This time, however, the forum had a major distinguishing feature -- namely that some of the rich were far less rich than they were a year ago, and the experts as a group were left naked, as it were, by the general realization that with all their knowledge they had not foreseen the defining event of 1997, the Asian financial crisis. And in the course of the week-long forum it became clear that although everybody now with hindsight agrees on the causes of the Asian crisis, nobody is sure about what to do to avoid a similar catastrophe in future.
Participants of all political complexions spoke of the need for increased transparency and accountability in the globalised banking and finance worlds to repair the damage in Asia and prevent another meltdown. Thailand's Prime Minister Chuan Leekpai, whose country belongs to the club of the "suddenly-less-rich", dutifully stood up to assure the forum that his country is moving towards increased transparency and away from "crony capitalism". South Korea, which has also suffered devastating losses, sent its chief presidential adviser on economic affairs, You Jong Keun, to convey the same message.
But beyond the already well-established cry for finance sector reform, the Davos forum crystallized an increasingly influential body of opinion that the world needs to do more than that to ensure world growth is not ruptured by extreme market volatility. The basis of this idea is that the globalised economy requires globalised supervisory institutions, just like a good national financial system is the product of a whole body of national laws, customs, and ethical norms. The trouble is, nobody knows what international control mechanisms would really look like. The conceptual difficulty is how to create a framework for "global governance" without undercutting the commitment to free trade, and without abridging the sovereignty of individual nations.
One of the paradoxes of the forum was to see corporate business leaders, for whom deregulation is a holy creed, drawn into consideration of some form of international supervisory framework. But the pressure is there, both from within the core of the business community, and from politicians who worry about social upheaval. One of the foremost advocates of active measures is U.S. super financier George Soros, who repeated at Davos that the market could destroy itself if left to its own devices. Soros, true to his business instincts, says he is not talking about state intervention, which he would oppose.
As former Norwegian Prime Minister Gro Harlem Brundtland put it, Soros managed to raise more questions than he provided answers. One idea he proposed recently is the creation of an international insurance system for investors which, by lessening their exposure to risk, will stop them moving in panic to withdraw massive amounts of money.
More on the socio-political side, UN Secretary-General Kofi Annan said the global market can only succeed if it manages to promote prosperity and justice. He said he's confident the world will choose a stable and predictable system over an unstructured global environment. Likewise, however, he did not offer concrete proposals for mechanisms which could help achieve this. Others spoke of giving extra responsibility to the International Monetary Fund and World Bank, but once again the actual mechanisms remained hazy.
When the forum was not anguishing about Asia, it was pondering a myriad of economic and non-economic themes, ranging from the search from new spiritual meaning, to a consideration of death. But it was not only a place for pondering theories. The presence of senior U.S. officials and politicians leant the gathering an air of immediacy in news terms.
U.S. Ambassador to the UN, Bill Richradson, warned that the standoff with Iraq is soon going to end in military action if President Saddam Hussein does not obey the will of the international community. Richardson used his time in Davos to gain commitments from other nations to support U.S.-led military action. Speaker of the U.S. House of Representatives, Newt Gingrich, who was also present, took a strongly bipartisan line by saying that the Congress will back President Bill Clinton fully if the President decides to go ahead with a military strike.
One of the highlights of the forum was the address by Clinton's wife, Hillary, who spoke on the necessity of ensuring that social justice is not neglected in building the global market. She was warmly received by the audience, and her delivery was impressive. She gave no hint of stress as a result of the political difficulties surrounding her husband at home. The head of the World Economic Forum organization, Professor Klaus Schwab, received applause when he suggested Mrs. Clinton would be a suitable candidacy for the presidency herself.
Between the weighty themes, the conference presented some moments of unintended humor. One was when no less a figure than China's vice premier Li Langing launched into a spirited defense of China's embattled capitalist neighbors. His voice rising to the strident pitch beloved of Marxist orators, he described the day when those nations now stricken by the financial crisis will rise again even stronger than before.
Another such moment came during the forum's keynote speech by German Chancellor Helmut Kohl, who now ranks as Europe's revered elder statesman. Kohl -- whose bulk matches his great height -- referred to Germany's special responsibility, because of its past, to cooperate with humility in building a prosperous and united Europe. But when he referred to the coming launch of the European single currency, Kohl's avuncular image disappeared and the audience was treated to the awesome spectacle of the Iron Chancellor thundering from the podium in German "the single currency will succeed! It will be strong!" Certainly, if an act of will can make it so, it will be so.