[{"_1":2,"_31":-5,"_32":-5},"loaderData",{"_3":4},"routes/__layout/tag.$name",{"_5":6,"_7":8},"tagName","world economics","posts",[9],{"_10":11,"_12":13,"_14":15,"_16":17,"_18":19,"_20":21,"_22":23,"_24":25,"_26":-5,"_27":28,"_29":30},"id",1060,"title","Far be it for me to ignore one of the most fascinating über-forwards to be seen in a while. It was...","excerpt","I attended Davos and got rare full access. The mood was grim: global economic collapse feared, anti-American sentiment intense, Al Qaeda largely dismantled but franchised, and Iraq war universally dreaded. The world's 5,000 rulers are smart, naive, arrogant, and very, very worried.","body","Far be it for me to ignore one of the most fascinating über-forwards to be seen in a while. It was written by Laurie Garrett, a respected author who is usually more concerned about covering AIDS in Africa. She is none too pleased that this e-mail is now everywhere. The content is verbatim, as far as I know, with some headers containing her personal details removed. All emphasis is mine. It doesn't get interesting until the bullet points begin; skip the first four or five paragraphs and read them afterwards.\r\n\r\n

\r\nHi Guys.\r\n\r\nOK, hard to believe, but true. Yours truely has been hobnobbing with the\r\nruling class.\r\n\r\nI spent a week in Davos, Switzerland at the World Economic Forum. I was\r\nawarded a special pass which allowed me full access to not only the\r\nentire official meeting, but also private dinners with the likes the\r\nhead of the Saudi Secret Police, presidents of various insundry\r\ncountries, your Fortune 500 CEOS and the leaders of the most important\r\nNGOs in the world. This was not typical press access. It was full-on,\r\nunfettered, class A hobnobbing.\r\n\r\nDavos, I discovered, is a breathtakingly beautiful spot, unlike anything\r\nI'd ever experienced. Nestled high in the Swiss Alps, it's a three hours\r\ntrain ride from Zurich that finds you climbing steadily through\r\nsnow-laden mountains that bring to mind Heidi and Audrey Hepburn (as in\r\nthe opening scenes of \"Charade\"). The EXTREMELY powerful arrive by\r\nhelicopter. The moderately powerful take the first class train. The NGOs\r\nand we mere mortals reach heaven via coach train or a conference bus.\r\nOnce in Europe's bit of heaven conferees are scattered in hotels that\r\nrange from B&B to ultra luxury 5-stars, all of which are located along\r\none of only three streets that bisect the idyllic village of some 13,000\r\npermanent residents.\r\n\r\nLocal Davos folks are fanatic about skiing, and the slopes are literally\r\na 5-15 minute bus ride away, depending on which astounding downhill you\r\ncare to try. I don't know how, so rather than come home in a full body\r\ncast I merely watched.\r\n\r\nThis sweet little chalet village was during the WEF packed with about\r\n3000 delegates and press, some 1000 Swiss police, another 400 Swiss\r\nsoldiers, numerous tanks and armored personnel carriers, gigantic rolls\r\nof coiled barbed wire that gracefully cascaded down snow-covered\r\nhillsides, missile launchers and assorted other tools of the national\r\nsecurity trade. The security precautions did not, of course, stop there.\r\nEvery single person who planned to enter the conference site had special\r\nelectronic badges which, upon being swiped across a reading pad,\r\nproduced a computer screen filled color portrait of the attendee, along\r\nwith his/her vital statistics. These were swiped and scrutinized by\r\nsoldiers and police every few minutes -- any time one passed through a\r\ndoor, basically. The whole system was connected to handheld wireless\r\ncommunication devices made by HP, which were issued to all VIPs. I got\r\none. Very cool, except when they crashed. Which, of course, they did\r\nfrequently. These devices supplied every imagineable piece of\r\ninformation one could want about the conference, your fellow delegates,\r\nDavos, the world news, etc. And they were emailing devices --- all\r\nemails being monitored, of course, by Swiss cops.\r\n\r\nAntiglobalization folks didn't stand a chance. Nor did Al Qaeda. After\r\nall, if someone managed to take out Davos during WEF week the world\r\nwould basically lose a fair chunk of its ruling and governing class\r\nPOOF, just like that. So security was the name of the game. Metal\r\ndetectors, X-ray machines, shivering soldiers standing in blizzards,\r\netc.\r\n\r\nOverall, here is what I learned about the state of our world:\r\n\r\n- I was in a dinner with heads of Saudi and German FBI, plus the\r\nforeign minister of Afghanistan. They all said that at its peak Al Qaeda\r\nhad 70,000 members. Only 10% of them were trained in terrorism -- the\r\nrest were military recruits. Of that 7000, they say all but about 200\r\nare dead or in jail.\r\n\r\n- But Al Qaeda, they say, is like a brand which has been heavily\r\nfranchised. And nobody knows how many unofficial franchises have been\r\nspawned since 9/11.\r\n\r\n- The global economy is in very very very very bad shape. Last year\r\nwhen WEF met here in New York all I heard was, \"Yeah, it's bad, but\r\nrecovery is right around the corner\". This year \"recovery\" was a word\r\nnever uttered. Fear was palpable -- fear of enormous fiscal hysteria.\r\nThe watchwords were \"deflation\", \"long term stagnation\" and \"collapse of\r\nthe dollar\". All of this is without war.\r\n\r\n- If the U.S. unilaterally goes to war, and it is anything short of a\r\nquick surgical strike (lasting less than 30 days), the economists were\r\nall predicting extreme economic gloom: falling dollar value, rising spot\r\nmarket oil prices, the Fed pushing interest rates down towards zero with\r\nresulting increase in national debt, severe trouble in all countries\r\nwhose currency is guaranteed agains the dollar (which is just about\r\neverybody except the EU), a near cessation of all development and\r\nhumanitarian programs for poor countries. Very few economists or\r\nministers of finance predicted the world getting out of that economic\r\nfunk for minimally five-10 years, once the downward spiral ensues.\r\n\r\n- Not surprisingly, the business community was in no mood to hear about\r\na war in Iraq. Except for diehard American Republicans, a few Brit\r\nTories and some Middle East folks the WEF was in a foul, angry\r\nanti-American mood. Last year the WEF was a lovefest for America. This\r\nyear the mood was so ugly that it reminded me of what it felt like to be\r\nan American overseas in the Reagan years. The rich -- whether they are\r\nFrench or Chinese or just about anybody -- are livid about the Iraq\r\ncrisis primarily because they believe it will sink their financial\r\nfortunes.\r\n\r\n- Plenty are also infuriated because they disagree on policy grounds. I\r\nlearned a great deal. It goes FAR beyond the sorts of questions one\r\nhears raised by demonstrators and in UN debates. For example:\r\n\r\n- If Al Qaeda is down to merely 200 terrorists cadres and a\r\nhandful of wannabe franchises, what's all the fuss?\r\n\r\n- The Middle East situation has never been worse. All hope for a\r\nsettlement between Israel and Palestine seems to have evaporated. The\r\nenergy should be focused on placing painful financial pressure on all\r\nsides in that fight, forcing them to the negotiating table. Otherwise,\r\nthe ME may well explode. The war in Iraq is at best a distraction from\r\nthat core issue, at worst may aggravate it. Jordan's Queen Rania spoke\r\nof the \"desperate search for hope\".\r\n\r\n- Serious Islamic leaders (e.g. the King of Jordan, the Prime\r\nMinster of Malaysia, the Grand Mufti of Bosnia) believe that the Islamic\r\nworld must recapture the glory days of 12-13th C Islam. That means\r\nfinding tolerance and building great education institutions and places\r\nof learning. The King was passionate on the subject. It also means\r\nfreedom of movement and speech within and among the Islamic nations.\r\nAnd, most importantly to the WEF, it means flourishing free trade and\r\nsupport for entrepeneurs with minimal state regulation. (However, there\r\nwere also several Middle East respresentatives who argued precisely the\r\nopposite. They believe bringing down Saddam Hussein and then pushing the\r\nIsrael/Palestine issue could actually result in a Golden Age for Arab\r\nIslam.)\r\n\r\n- US unilateralism is seen as arrogant, bullyish. If the U.S.\r\ncannot behave in partnership with its allies -- especially the Europeans\r\n-- it risks not only political alliance but BUSINESS, as well. Company\r\nleaders argued that they would rather not have to deal with US\r\ngovernment attitudes about all sorts of multilateral treaties (climate\r\nchange, intellectual property, rights of children, etc.) -- it's easier\r\nto just do business in countries whose governments agree with yours. And\r\nit's cheaper, in the long run, because the regulatory envornments match.\r\nWar against Iraq is seen as just another example of the unilateralism.\r\n\r\n- For a minority of the participants there was another layer of\r\nAntiAmericanism that focused on moralisms and religion. I often heard\r\ndelegates complain that the US \"opposes the rights of children\", because\r\nwe block all treaties and UN efforts that would support sex education\r\nand condom access for children and teens. They spoke of sex education as\r\na \"right\". Similarly, there was a decidedly mixed feeling about\r\nAshcroft, who addressed the conference. I attended a small lunch with\r\nAshcroft, and observed Ralph Reed and other prominent Christian\r\nfundamentalists working the room and bowing their heads before eating.\r\nThe rest of the world's elite finds this American Christian behavior at\r\nleast as uncomfortable as it does Moslem or Hindu fundamentalist\r\nbehavior. They find it awkward every time a US representative refers to\r\n\"faith-based\" programs. It's different from how it makes non-Christian\r\nAmericans feel -- these folks experience it as downright embarrassing.\r\n\r\n- When Colin Powell gave the speech of his life, trying to win\r\nover the nonAmerican delegates, the sharpest attack on his comments came\r\nnot from Amnesty International or some Islamic representative -- it came\r\nfrom the head of the largest bank in the Netherlands!\r\n\r\nI learned that the only economy about which there is much enthusiasm is\r\nChina, which was responsible for 77% of the global GDP growth in 2002.\r\nBut the honcho of the Bank of China, Zhu Min, said that fantastic growth\r\ncould slow to a crawl if China cannot solve its rural/urban problem.\r\nCurrently 400 million Chinese are urbanites, and their average income is\r\n16 times that of the 900 million rural residents. Zhu argued China must\r\nurbanize nearly a billion people in ten years!\r\n\r\nI learned that the US economy is the primary drag on the global economy,\r\nand only a handful of nations have sufficient internal growth to thrive\r\nwhen the US is stagnating.\r\n\r\nThe WEF was overwhelmed by talk of security, with fears of terrorism,\r\ncomputer and copyright theft, assassination and global instability\r\ndominating almost every discussion.\r\n\r\nI learned from American security and military speakers that, \"We need\r\nto attack Iraq not to punish it for what it might have, but\r\npreemptively, as part of a global war. Iraq is just one piece of a\r\ncampaign that will last years, taking out states, cleansing the planet.\"\r\n[What the fuck? Wait 'til the anti-war movement get their mits on\r\nthis little gem - Seldo]\r\n\r\nThe mood was very grim. Almost no parties, little fun. If it hadn't been\r\nfor the South Africans -- party animals every one of them -- I'd never\r\nhave danced. Thankfully, the South Africans staged a helluva party, with\r\nJimmy Dludlu's band rocking until 3am and Stellenbosch wines pouring\r\nfreely, glass after glass after glass....\r\n\r\nThese WEF folks are freaked out. They see very bad economics ahead, war,\r\nand more terrorism. About 10% of the sessions were about terrorism, and\r\nit's heavy stuff. One session costed out what another 9/11-type attack\r\nwould do to global markets, predicting a far, far worse impact due to\r\nthe \"second hit\" effect -- a second hit that would prove all the world's\r\npost-9/11 security efforts had failed. Another costed out in detail what\r\nthis, or that, war scenario\r\nWould do to spot oil prices. Russian speakers argued that \"failed\r\nnations\" were spawning terrorists --- code for saying, \"we hate\r\nChechnya\". Entire sessions were devoted to arguing which poses the\r\ngreater asymmetric threat: nuclear, chemical or biological weapons.\r\n\r\nFinally, who are these guys? I actually enjoyed a lot of my\r\nconversations, and found many of the leaders and rich quite charming and\r\nremarkably candid. Some dressed elegantly, no matter how bitter cold and\r\nsnowy it was, but most seemed quite happy in ski clothes or casual\r\nattire. Women wearing pants was perfectly acceptable, and the elite is\r\nsufficiently\r\nMulticultural that even the suit and tie lacks a sense of dominance.\r\nWatching Bill Clinton address the conference while sitting in the hotel\r\nroom of the President of Mozambique -- we were viewing it on closed\r\ncircuit TV -- I got juicy blow-by=blow analysis of US foreign policy\r\nfrom a remarkably candid head of state. A day spent with Bill Gates\r\nturned out to be fascinating and fun. I found the CEO of Heinekin\r\nhilarious, and George Soros proved quite earnest about confronting AIDS.\r\nVicente Fox -- who I had breakfast with -- proved sexy and smart like a\r\n--- well, a fox. David Stern (Chair of the NBA) ran up and gave me a\r\nhug.\r\n\r\nThe world isn't run by a clever cabal. It's run by about 5,000\r\nbickering, sometimes charming, usually arrogant, mostly male people who\r\nare accustomed to living in either phenomenal wealth, or great personal\r\npower. A few have both. Many of them turn out to be remarkably naive --\r\nespecially about science and technology. All of them are financially\r\nwise, though their ranks have thinned due to unwise tech-stock\r\ninvesting. They pay close heed to politics, though most would be happy\r\nif the global political system behaved far more rationally -- better for\r\nthe bottom line. They work very hard, attending sessions from dawn to\r\nnearly midnight, but expect the standards of intelligence and analysis\r\nto be the best available in the entire world. They are impatient. They\r\nhave a hard time reconciling long term issues (global wearming, AIDS\r\n\r\npandemic, resource scarcity) with their daily bottomline foci. They are\r\ncomfortable working across languages, cultures and gender, though white\r\ncaucasian males still outnumber all other categories. They adore hi-tech\r\ngadgets and are glued to their cell phones.\r\n\r\nWelcome to Earth: meet the leaders.\r\n\r\nCiao,\r\nLaurie

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Posts tagged “world economics”