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Davos: New Power Balance – skewed priorities

January 30, 2011

The World Economic Forum in a small hamlet of Switzerland, Davos is a yearly pilgrimage for the who’s who of the globe. There are politicians, business leaders and then there are journalists aplenty covering the goings on in this beautiful ski resort.

There are many issues discussed during the Davos Summit. This is a gathering of those who matter and perhaps a singular such platform where eminent leaders and thinkers are welcomed to discuss on where the world is and where it should go. It is the factors that affect the economic health of the global community that take precedence over everything else. So this year while the usual currency issues between US and China, the EU and Euro and the rise of China and India were the focus, the developments in the Arab world also found some voice. Politics and business are intertwined in the best of times and any major political upheavals find business leaders and political minds coming together to tinker at the way the world is likely to move and what that would mean for business and investment in a particular region. Many a corporate investment decisions are made from the feedback that corporate honchos get during the World Economic Forum. For example, those companies with a footprint in Egypt will be hedging their bets as to which way the nation will go and whether to pledge more investment in near future. Similarly, they will be watching closely as to which way Cairo turns politically and if it takes a turn for the worse how and when to wrap up business from the growing Egyptian market.

But that is not all. WEF also has country specific discussions and experts throw up their take on the economic and political future of various countries. The most discussed and the oft repeated assertion is the rise of China. This has been going on for quite a few years now. From some calculation there are economists who have arrived at the conclusion that China is the second largest economy in the world after the US and that Japan and Germany have lagged behind. India is taken in the same breath as China.  In the passing, it is also mentioned that at least in India there is widespread poverty that is as bad if not worse than the sub-Saharan nations. China too has poverty and it is the Chinese who are the first ones to point out the fact.

It is true that such basic issues as poverty alleviation and health care are also discussed at the WEF but that is an aside. These are issues that also find mention. The focus is the rising economies like China, India, Brazil and South Africa.  There is a lot of talk about the balance of power getting shifted from Europe and North America to Asia. When there are such discussions as there are invariably, it is with a bit of trepidation and alarm. This may not be overt but somewhere there is a lingering feeling among the delegates that this might just actually happen. Amazingly some of the other truly developed economies of Asia like Japan, South Korea and Singapore are hardly if ever mentioned. The question is why?

It is clear that The West has created a monster in China. That China is a communist country goes against it. That China has huge foreign exchange reserves is again a matter of concern. And a rising China is acquiring financial and material asset across the globe is also not taken very well by the west. It may be mentioned that Japan also has more than a trillion dollars in foreign exchange reserves but that does not find mention.

In one of the panel discussions that was televised by the BBC the focus of the debate was the New balance of power. Nick Gowing the BBC anchor was moderating the debate. The last question that he put to the audience was whether the US or China will be the world super power in 2025? Nothing could be more ridiculous. The question was childish as was the debate. The WEF it seems has become more a platform for political posturing than any real meaningful dialogue between business and political leaders regarding real economic progress for mankind which was the original goal of this forum.

Does it really matter which country will be calling the shots in the next twenty years? Should Davos be reduced to a platform which is more into childish competitiveness or should it be a forum to discuss a holistic growth of human kind. Millions of babies go to bed hungry everyday. There is malnutrition galore in this world and that includes countries like India and China.  There is disease and lack of sanitation in most of these least developed and under developed countries.  Housing is a big problem in villages and cities of modern India and China, Brazil and South Africa. Electricity has yet to reach hundreds of thousands of villages in India. Should not these be the issues that should concern the leaders in Davos? They are talking about a perceived competition that should be the last on their priority list. Real issues like better way of life and basic amenities for the millions struggling to get out of poverty should be the focus. How to give these millions of deprived fellow human beings basic education so that they can manage their lives better should be at the heart of the debate.

I am not talking about philanthropy. I am talking about real business issues. These are the business issues that these leaders should be burning the midnight oil for in Davos. A better way of life for millions and alleviating them from poverty will mean more business opportunities for these business honchos. Better living standards will mean that many more yards of clothing will be demanded by these people, more demand for shoes and better food, better housing and better education that are all at the heart of any business enterprise. It is the demand for these basics that are at the core of most businesses. That many more phones will be demanded and so on and so forth. The wheels of economic growth will start moving and this will herald a prosperity that mankind has not witnessed in its entire history of existence.

Making sure that our fellow human beings do well and prosper is in our own self interest. The prosperity of mankind has to be inclusive and not in isolation. One cannot build castles amid ruins. Davos is one place where such thought process can take shape into reality. There is no competition. There is no us and them in this global village of the 21st century. It is about the human race. We need to think as one and give a shoulder to the other so that there is prosperity all around; So that no baby cries to sleep hungry, so that no family dies of cold and hunger and so that the appetite for knowledge does not go unanswered. There has to be a grander vision for the human race. It is not impossible to achieve global food security, universal education and shelter for all. We have the resources and the means to make this happen. We need to learn to think as one; one people, one planet and a singular vision for global well being. Davos is one place where such dreams can take shape. This is one forum where people who can make this happen come together. And you know what, when these people do get their minds to doing this they can do this without much effort. The good news for them is that if they do get down to tackling these fundamental issues their own businesses will grow at a pace that they will find hard to keep up with. There is magic waiting to happen. It is all a matter of will. And such meaningless questions as to which country will be the superpower in the next 25 years should be ignored with the contempt it deserves.

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