Income Inequality Was Quickly Forgotten at Davos
The witching hour had come to Davos. Inside the convention center, workmen walked the halls where, earlier in the day, world leaders paraded among their entourages. The guys in overalls were pulling the signs off the walls; they were striking the sets and stages in the conference rooms on Saturday night. This is the way the World Economic Forum ends every year, not with a bang, but a whimper.
In other corners of this snow-covered town nestled high in the Swiss Alps, the last of the extravagant networking parties were winding down. A farewell gala boogied on at the hideous new Intercontinental Hotel that looks, as one woman remarked, “like an enormous version of the golden egg laid by the goose.” But, soon, even there, the asparagus mousse disappeared, the Chateau de Pez 2006 stopped flowing, and the last of the elite invitees boarded shuttles back to their far-flung hotels.
“Whatever happened to inequality?” someone asked in my van. “It kind of disappeared,” said a woman from Montreal. “Oh, we talked about it a lot,” said a young delegate from South Africa. Everyone else looked puzzled.
Inequality was on the agenda at the WEF. Sure. The conference opened with the forum organizers themselves calling on the 2,500 people in attendance to address the explosive imbalance between the world’s astronomical rich and those who live in grinding poverty. A message from Pope Francis (arguably the world’s most admired leader at the moment) was polite but blunt: “I ask you to ensure that humanity is served by wealth and not ruled by it,” he said.
But once the conference was in full swing, few people talked, and even fewer seemed to care, about inequality. Indeed, they appeared to be living it, loving it, and laughing about it. Without question the most popular video on laptops and iPads was Jon Stewart’s “Mountain Few” segment on “The Daily Show” about the hypocrisy of the event. Citing the stunning statistic that 85 people on this planet control as much wealth as 3.5 billion, Stewart said “Jesus Christ [pause] would not be very happy about that.”
The consensus among the rich guys I talked to (most of whom had left in their chauffeur-driven Audis and private jets on Friday), was that Davos this year was just the way it should be: a place to make more deals face to face with more people much faster than they could anywhere else – then spend a few hours on the slopes or taking in the esoteric offerings on the conference agenda, like Goldie Hawn talking about meditation. “I like to improve my mind,” one influential American CEO told me.
Notice I say rich guys. The ratio of men to women on the guest list was 85 percent to 15 percent. That may well reflect the global reality—and another glaring inequality—but it also shows once again how difficult it is for Davos to bring about the kinds of change the forum organizers say they want to encourage.
When I asked economist Nariman Behravesh of IHS whether he thought the inequality issue had gotten lost in the snow, he agreed that it had. The elites at Davos felt they’d weathered the storm of the recession and the threat of a collapsing euro in recent years. So there’s a palpable sigh of relief. “They’re more interested in how they’re going to grow the top line,” said Behravesh. And the leaders of the increasingly desperate poor countries “are saying ‘we’re open for business—come invest in our country!’”
But even the supposed powerhouses of the less-than-rich world—Brazil, Russia, India and China (yes China)—are looking a little peaked. “The BRICs party is over,” said Behravesh. The “dull and old economies,” he says, are set to see their strongest growth since 2010, and those sorts of predictions sat rather well with the self-satisfied dull and old elites at Davos—until the forum was wrapping up. Last Friday and again on Monday, equities plunged on fears that emerging markets weren’t really emerging very well. Gosh. What a surprise.
For those determined to be serious about the state of the world – most notably the journalists who cranked out literally hundreds of thousands of articles about the confab – there certainly were some headlines to be made. While many reporters are treated as third-class citizens, after the Audi crowd and the also-ran delegates, it’s obvious that the global media, both mainstream and social, are an essential component of Davos. Stories get thrown at them like cows getting tossed to piranhas, and they’re just as rapidly torn asunder.
This year one of the biggest controversies came when Japanese Prime Minister Shinzo Abe compared the tensions between China and Japan to the tensions in Europe before World War I – but it appears now he didn’t quite say that. There may have been a slip in the English translation of his remarks at a media event. “Japan’s Leader Compares Strain With China to Germany and Britain in 1914,” read the headline in The New York Times, and many other English-language publications took a similar view. But an aide to Abe said the remark – “I think we are in a similar situation” – was improvised by the interpreter, and no such words were uttered by Abe in Japanese, as evidenced by a tape of the original remarks.
Most of the other big headlines grew out of what seemed a Middle Eastern marathon.
Syria was much talked about, and talked about, and talked about. An extraordinary 3D video-game-style depiction of a street in Aleppo as it’s hit with a mortar allowed participants to feel the virtual reality of the war. But any real-reality initiative to end the fighting was left to the negotiators meeting last week in Montreux and now in Geneva. And those talks, in their early stages, have as yet achieved nothing.
I moderated a Davos panel with several Arab officials, including Egyptian Minister of Finance Ahmed Galal. None had a solution for Syria. But none wanted to talk about Iran, either. And naturally none would admit the errors of the regimes they serve. Some took umbrage at the mere mention of “human rights.” From the audience, Amr Moussa – former foreign minister under Egyptian President Hosni Mubarak, former head of the Arab League, former failed presidential candidate, and a co-author of the new constitution embarrassingly approved by 98 percent of the Egyptians who voted in a referendum – said that any suggestion of particular problems with human rights in Arab nations was “racist.”
Sigh. No headlines came from that panel’s parallel universe. And on Saturday in Cairo scores of people died in protests marking the third anniversary of the uprising that overthrew Mubarak.
Iranian President Hassan Rouhani showed up at Davos with Iranian Foreign Minister Javad Zarif on a relentless charm offensive, followed by Prime Minister Bibi Netanyahu talking up Israel, with reason, as “the innovation nation” -- to which a former minister from Lebanon responded, “How about ‘the occupation nation’?”
To the credit of the World Economic Forum, its organizers really do want to promote peace, and as the main events wound up at the Davos convention center on Saturday evening, a sequel started at a Davos hotel. Called “Breaking The Impasse,” or BTI, it continued Sunday with hundreds of Israeli and Palestinian business owners in attendance, many of them very rich and very well known to each other.
The atmosphere was civil, and even friendly. All hope they can encourage Secretary of State John Kerry to keep pushing for a solid peace agreement between the two peoples that inhabit Israel-Palestine. All hope they can press Netanyahu to take the plunge toward peace. And all know the parameters: two states with mutually agreed adjustments to the old borders of 1967; mutual recognition; a settlement of the Palestinian refugee issue that would not involve repatriation of the Arab exiles and their descendants to what’s known as “Israel proper”; solid security guarantees; and an arrangement allowing the Palestinians to claim East Jerusalem as their capital.
While waiting to get into one of those Impasse events I overheard, in passing, a remark by a very wealthy Israeli woman, who told a friend, “I can visit East Jerusalem. I visit Paris, I visit London, I don’t need to own them.”
Sometimes life seems so simple when you’re rich.