Is the World Economic Forum (WEF) an arm of the United Nations? Or is it an international body set up by a group of nations with a mutually agreed charter? Given the extensive media coverage and the hype that goes with its annual event at Davos – the ski resort in Switzerland – one would imagine that it is truly an official international body.
It isn’t! The WEF is a Switzerland-based NGO set up in 1971 by Klaus Schwab, a Swiss national who still heads its Davos meet. It was initially registered as the European Management Forum, an advocacy group of sorts which got together CEOs of European corporations to familiarise them with American style business management. In 1987, it was renamed the World Economic Forum when its footprint was widened to include participation by nations outside of Europe.
The WEF’s Davos Summit is the annual get together of world elites who promote and profit from the expansion of global markets. According to Andrew Marshall, Canadian journalist, researcher and strident critic of the Forum, the main purpose of the WEF “is to function as a socialising institution for the emerging global elite, globalisation’s “Mafiocracy” of bankers, industrialists, oligarchs, technocrats and politicians. They promote common ideas, and serve common interests: their own”.
In fact, the evolution of the WEF through the 1990s led to the emergence of an elite class of people famously categorised by political scientist Samuel Huntington as the “Davos Man”. According to him, this elite group of individuals have “little need for national loyalty, view national borders as obstacles that are thankfully vanishing and see national governance as residues from the past whose only useful function is to facilitate the elite’s global operations”.
Susan George, Fellow and President of the Amsterdam-based Transnational Institute, a network of scholar-activists, paints a different picture. In her book, Whose Crisis, Whose Future? , she notes: “The Davos class, despite its members’ nice manners and well-tailored clothes is predatory… They run our major institutions, including the media, know exactly what they want and are much more united and better organised than we are. But this dominant class has weaknesses too; they are wedded to an ideology that isn’t working and they have virtually no ideas nor imagination to resolve this.”
Critics of the Forum would go a step further to allege that it’s fundamental focus is increasing profits of the super-rich, rewarding and patronising political leaders who cooperate with this global elite, rather than improving the world or offering solutions to global problems. They point out that the WEF is undemocratic and unaccountable and guilty of having reinforced the global crisis of inequality, poverty and environmental destruction.
Four years ago, noted US consumer researcher Markus Gielser and co-author Ela Veresiu conducted a study on the WEF’s problem solving initiatives. Their findings, published in the Journal of Consumer Research (University of Chicago Press), revealed that the Forum had failed to resolve issues such as poverty, global warming, chronic illness or debt.
Instead, Gielser pointed out, it merely “shifted the burden for the solution of these problems from governments and business to four, now commonplace types of responsible consumers subjects: the bottom-of-the-pyramid consumer, the green consumer, the health-conscious consumer and the financially literate consumer”.
...when a packed session was devoted to the problem of inequality and why it needs to be urgently addressed, the consensus was that if it wasn’t, then the super-rich may soon have to prepare for a disastrous fallout
He cited Al Gore presenting global warming at Davos as “not a political issue, so much as a moral one” as a typical example. The former US vice president and environmentalist, instead of holding governments and big corporations responsible had stated that what was required was a passionate commitment from all involved stakeholders to become a society in which “each one of us may be the cause of global warming, but each of us can make choices to change that with the things we buy, with the electricity we use, the cars we drive”.
According to Giesler, Gore was thus not only promoting new markets but he was invariably promoting a society which “renders all demands for environmental protection as evidence for inherent moral pathologies such as entitlement, laziness, passivity and a lack of solidarity”.
The Gielser-Veresiu study called this “consumer responsibilisation” where the issue at hand is shifted to the level of individual consumption. Global warming thus was not the result of “unregulated markets or excessive corporate activities but rather stemmed from individual market actors' unethical choice making”. So, the solution was in more ethical consumer behaviour via greater inclusion and by developing new markets to facilitate this.
Supporters of the Forum will point out that it would be unfair to dismiss the Davos meet as the sole preserve of big business since it now welcomes wider participation. That is true. But if the WEF has become more inclusive to include academics from diverse fields and NGOs, it is to gain credibility and acceptance after criticism that it was merely an elitist conclave.
However, even when the WEF voices concern about poverty and inequity, it is with the interests of the global elite in mind. This was revealed at the Davos meet in 2015 when a packed session was devoted to the problem of inequality and why it needs to be urgently addressed. The consensus was that if it wasn’t, then the super-rich may soon have to prepare for a disastrous fallout.
In fact, Robert Johnson, a former hedge fund director at Soros and head of the Institute of New Economic Thinking had famously pointed out then that he knew of “hedge fund managers all over the world who are buying airstrips and farms in places like New Zealand because they think they may need a getaway”. The message was loud and clear: the disparities in the world had to be brought to tolerable levels in the interests of the rich.
The present Board of the WEF includes, among others, Peter Brabeck-Letmathe, Chairman of the Board of Nestle, Switzerland; Indra Nooyi, Chairman and CEO, Pepsico, USA; Herman Gref, Chairman and CEO Sberbank, Russian Federation and Christine Lagarde, Managing Director, IMF. Indian industrialist Mukesh Ambani is also on the board. It sure is a grouping of the big wigs of the corporate and financial world.
So far only three Indian prime ministers have gone to Davos to sit at the high table. Narasimha Rao in 1994, Deve Gowda in 1997 and now Narendra Modi. In the past, the prime ministerial presence did not translate into any significant FDI inflows. It remains to be seen if Modi will be third time lucky.