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Davos ended with a whimper, and now European leaders head to a financial summit in Brussels, unlikely to come up with a viable—and desperately needed—economic plan, writes Christopher Dickey.

“If someone says a rhinoceros is coming in two seconds, we worry,” a Buddhist monk told me on the sidelines of the World Economic Forum at Davos, Switzerland, last week. “But if you say a rhinoceros is coming in 20 years, nobody moves.”

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he global forum that just ended at Davos and the European summit now under way in Brussels fall short as the confidence building events the markets – and the world economy – desperately need. (Michel Euler / AP Photo)

Ah, the wisdom of the East makes even the most obvious truism sound exotic. But the phrase kept rattling around in my head at the annual gathering of the putative elite of the elite of the crème de la crème of global politics and business. As Davos whimpered to an end on Sunday, it was clear the masters of the universe have been mastered by a universe they no longer understand. And for all the talk about leadership going into this meeting, there was a wealth of ignorance going out. Indeed, it’s far from clear that the European leaders at the formal summit in Brussels meeting Monday will do any better.

Everyone knows at least one rhinoceros is coming, but there may be a whole herd on the way, with each more dangerous than the next. And while they might not arrive in two seconds, they could be in our faces in a matter of months or weeks or even days. Yet some of the most important players— the ones critical to building the defenses to keep the beasts at bay—act as if they might have 20 years to spare. “I have been in public service—most of which involved public finance—for over four decades,” said Donald Tsang, president of the Executive Council of Hong Kong. “Let me share with you:  I have never been as scared as now about the world.”

YIKES

Topless Protesters Arrested at Davos

Topless Protesters Arrested at Davos Anja Niedringhaus / AP

Separate Occupy demonstration marches to conference.

Imagine how cold this must have been. Three topless Ukrainian protesters were arrested Saturday at the World Economic Forum in Davos trying to break into an invitation-only gathering of international CEOs and political leaders in an effort to draw attention toward the world’s poor. They carried signs that read “Crisis! Made in Davos!” and “Poor, because of you” and “Gangster's Party in Davos.” They are part of a popular Ukrainian protest group called Fremen that frequently stages half-naked protests to draw attention to the needy. A group of about 40 Occupy protesters held a separate protest on Saturday, gathering in front of the town hall and shouting, “If voting would change anything, it would be illegal” and “Don’t let them decide for you, Occupy WEF.”

Read it at Associated Press

WORLD ECONOMY

Pressure on Debt Hits Davos

Pressure on Debt Hits Davos Michel Euler / AP Photo

As Greece close to striking deal.

Leaders at the World Economic Forum in Davos, Switzerland, on Saturday turned up the pressure on Europe to find a solution to the region's sovereign debt crisis. The International Monetary Fund's Christine Lagarde said a bigger firewall of money needs to be set up to ensure stability if there is a lending crisis; the current capacity is $656 billion, which Lagarde said is not enough when it begins operating in July. But there's also good news, as officials in talks between Greece and private creditors say a deal is very close to being reached so that the country's debt load could be cut in half, preventing a potentially disastrous default.

Read it at New York Times

FIREWALL

Europe Warned Against Debt Complacency at Davos

Europe Warned Against Debt Complacency at Davos Ralph Orlowski / Getty Images

Lagarde pressures Greece to come up with a debt solution.

European leaders were warned at the World Economic Forum in Davos on Friday not to forget about the debt crisis—and have their defenses ready if it gets worse. International Monetary Fund president Christine Lagarde pressured Greece and its creditors to hammer out a deal on cutting the debt burden, and she said she was pleased to see Greece and its bond holders going “back to the drawing board” to come up with a plan to loosen the debt burden. U.S. Treasury Secretary Timothy Geithner told delegates that the “only way Europe is going to be successful in holding this together, making monetary union work, is to build a stronger firewall.” Geithner said that while the IMF can help, its resources can’t be used as a “substitute for a more effective” domestic response.

Read it at Bloomberg News

Daily Davos

The Missing Agenda

Are leaders missing the real point?

The World Economic Forum has a history of missing the point. The annual meeting in Davos, Switzerland, months in planning, can end up mired in issues that were relevant ages ago instead of anticipating what comes next. Case in point: last year’s meeting, caught flat-footed by the Arab Spring uprisings.

World Economic Forum

Protesters occupy the main gate to the Davos congress center, site of the World Economic Forum, as limousines drive by in Davos, Switzerland on January 25, 2012. (Johannes Simon / Getty Images)

This year, the meeting has done a better job of addressing the issues everybody is actually talking about in the hallways: Europe’s financial meltdown and the future of the global economy. But the deafening chatter about the financial crisis may be drowning out an equally urgent issue, one that will likely dominate the agenda next year and beyond: the skill-set mismatch between what companies need and what people looking for work can offer.

“We think the talent-and-skills mismatch will become more acute. That’s a structural change,” says Jonas Prising, the president of the Americas for the staffing company ManpowerGroup, who notes that the U.S. lags far behind other countries in science and technology, areas where new jobs are most likely to be created.

Daily Davos

Pessimism in the Alps

Leaders Fear the Worst in Davos.

The skies are gray and the mood is bleak on day three of the World Economic Forum in Davos. Friday’s panels are equally grim as leaders take on some of the world’s most worrying problems. “What if Iran Develops a Nuclear Weapon?” was the hottest panel Friday morning with Yukiya Amano, head of the International Atomic Energy Agency leading a discussion with Deputy Prime Minister of Israel Ehud Barak, U.S. president of the Coucil on Foreign Relations Richard Haass and External Relations Minister of Brazil Antonio de Aguiar Patriota. 

World Economic Forum

The Global Fund board chairman Simon Bland (L) and Microsoft founder and US billionaire philanthropist Bill Gates pose for a photo during the World Economic Forum in Davos, Switzerland on January 26, 2012. (Fabrice Coffrini, AFP / Getty Images)

Throughout the week, conversations in Davos have ultimately focused on what has been coined as "the Europe problem," which is clearly on every leader’s mind.  “We have a time bomb, the bomb is in Europe and we are working together to deactivate it before it explodes over all of us,” warned Mexican President Felipe Calderon, current head of the G20. “The failure of a containment strategy will mean not only the potential implosion of the euro, but an economic crisis with devastating consequences for the rest of the world.”

Friday’s hottest economic sessions reflected the somber mood as leaders turned introspective. “Fixing Capitalism” led by Angel Gurria of the Organization for Economic Cooperation and Development and “The Future of the Eurozone” with finance ministers from France, Spain, Brussels, and Germany spurred heated debate in the halls. Friday’s televised debate focuses on the provocative question: “Big Banks: Cure or Curse for the Global Economy?” Mario Draghi, head of the European Central Bank is sure to draw an attentive audience as he tries to lay out the future in an address called “Europe’s Economic Outlook.”

DAVOS

Where Are All the Women in Davos?

Only 17 percent of attendees are female.

To register for this week’s World Economic Forum in Davos, delegates had to fill in a profile page that is preset with the silhouette of a shadowy man. A year after imposing a quota on the biggest companies to encourage more women to attend, that image still fits the gender profile of more than 80 percent of delegates. Despite the quota, just 17 percent of those gathered from the world’s business and political elites are women. This is the highest yet in the 40-odd years of the event, up from 16 percent in 2011—and just 9 percent in 2002. But it still gives a useful guide to the headway women are making at the top. I’ve been to Davos once before when I tackled the late nights and icy roads while five months pregnant. I thought once was enough. But five years on, I am back, wanting to find out how much has changed. Saadia Zahidi, the head of constituents at WEF who has spearheaded the program of increasing diversity, says it has actively sought out women for panels (some 20 percent of all panelists are women), made the issue of gender the subject of more sessions and added a gender lens to general discussions on the economy or health. Her group was also responsible for the introduction of a quota for “strategic partners”—the top 100 companies attending the mountainside event—which dictates that one in every five passes has to be a woman. A fifth of them decided to send just four people.

Read it at womenintheworld.org

RELUCTANT AID

Leaders Debate China’s Role in Economic Recovery

Amid distrust of motives in growing global investments.

Attention turned to China during a World Economic Forum debate Thursday morning on the role of Chinese money in helping to alleviate the financial problems hitting many of the world’s economies. While many leaders have increasingly looked to Chinese investments for help, suspicion of China’s growing power persists. John Zao, CEO of Hony Capital explained, “The vast majority of Chinese companies are trying to follow the rules as they understand it, but many Chinese companies are still trying to learn the rules.” While WTO Director-General Pascal Lamy pointed out that “public perception problems” will only get worse as China’s investments continue to grow, other panelists noted that the Western world is not without its own history of corporate problems (think Enron). And at the end of the day, as Yale President Richard C. Levin pointed out, struggling economies should be thankful for China’s help. China has increasing social problems of its own and, Levin said, “some fraction of these trillions could be used domestically.”

Read it at The Associated Press

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The Street Theater from Hell

"Where are your papers? Hands against the wall!" The UNHCR gives CEOs a chance to be refugees.

Others may offer cocktail parties, lunches and dinners at Davos, but each year the United Nations High Commissioner for Refugees tries to give the assembled global elite a taste of hell. Executives who volunteer for the experience -- and there are scores of them -- cross what looks like a crude police barrier between the snow drifts and suddenly find themselves living the lives of people who are homeless, stateless and bereft not only of their possessions but of their futures. As street theater, this brief, intense "simulation" is convincing enough to be disconcerting. I found myself buying a crust of bread with my glasses, and having guards roust me out of a tent at night to shake me down and steal my watch. But the fact is, this show pales by comparison with the brutalization most of the world's 43.3 million refugees have experienced as they flee their homes into the hands of governments that are at best only grudgingly hospitable and at worst downright savage. In most cases, the only real refuge, and the only real hope for these people, lies with the UNHCR, but even in the best-run camps, they may enter a kind of limbo that lasts, on average, a dozen years before they can return home or be resettled permanently in a third country.

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Our Silent Education Crisis

World leaders in Davos are tied up dealing with the economic slowdown—but the critical problem of children without schooling needs to be addressed as well. Former British prime minister Gordon Brown explains why he’s pushing for a global education fund.

As governments gather for the annual World Economic Forum meeting in Davos this week, their agenda is dominated by the state of the global economy and its impact on developed and emerging countries. These issues are undoubtedly of critical importance, but I fear that a global crisis that rarely makes headlines, the crisis in education, will be once again pushed to the sidelines.

The global crisis in education is a silent, invisible crisis, perhaps because those most immediately affected - the world’s poorest and most vulnerable children and their parents - have a weak voice. But it is at our peril that we ignore the overwhelming evidence that disadvantage in education costs lives, undermines economic growth, fuels youth unemployment, and reinforces national and global inequalities. The bottom line is that education holds the key to the development of more dynamic economies, greater social mobility, and poverty reduction. Education is the key that unlocks human potential and prepares future generations to participate in an increasingly knowledge-based global economy.

 Britain's former Prime Minister Gordon Brown

Former British prime minister Gordon Brown speaks during a session at the World Economic Forum in Davos, Switzerland on January 26, 2012. (Christian Hartmann, Reuters / Landov)

We merely have to look at the numbers to grasp the scale of the crisis. There are 68 million primary school age children out of school - and global progress towards universal primary education has slowed since 2005. If current trends continue, the out-of-school population could increase to 72 million by 2015. Another 71 million adolescents are out of school, many of them lacking a basic education. And while governments across the world are concerned about the quality of education, the evidence on learning achievement levels in many of the poorest countries is profoundly disturbing.

Great Transformation

A Tale of Two Davoses

The ‘top of the top one percent’ stereotype doesn’t really apply to this year’s conference, as the worlds of business titans and do-gooders rarely intersect. Joanne Lipman on the Davos divide.

It's the common refrain about the Davos World Economic Forum: It's the meeting of the "top percent of the top one percent." But that's only half-true.

In fact, this year feels more like two parallel meetings, with two very different groups that rarely (and sometimes never) intersect. One group is the titans: The CEOs, hedge-fund managers and political leaders who get most of the headlines. The other is the do-gooders: The small non-profit groups and nongovernmental organizations, the leaders of startup renewable energy companies and green tech firms.

In theory, the purpose of the meeting is for the two groups to intermingle and influence each other, working together towards the forum's larger goal of promoting a shared vision of the future.  After all, the theme of this year's meeting is "The Great Transformation: Shaping New Models."

But here's what reality looks like: Many of the business leaders arrive by private plane or helicopter; stay at luxury hotels like the Grandhotel Belvedere that are reserved for the forum's big-ticket supporters; are chauffered to events in private cars; and take meetings and meals in private rooms at private events. The do-gooders, meanwhile, stumble out of steerage at the Zurich Airport, take a two-plus hour train or shuttle bus to get to Davos; stick to the published meeting agenda, and are often relegated to hotels that are out of town, in Klosters or beyond.  Members of one group can go for the entire week without ever encountering the other.

The WEF meeting, in other words, has its own version of the 99% and the 1%.

The meeting has grown ever larger, and is at a record 2,600 participants this year, which has exacerbated the issue. Like a giant college—think Michigan or Ohio State, where kids join fraternities to make the sprawling campus seem smaller—Davos men and women create their own fraternities, gravitating toward others like themselves.

For the do-gooders, who could use both the karmic buy-in and the financial support of the business community, it can be a limiting experience. "I'm pretty frustrated.  It's all so siloed," said Jem Bendell, a sustainability consultant whose business card quotes MK Gandhi and says it is printed on recycled paper "handmade by women in India."

Up at the top of the food chain, some executives have noticed the same thing. "The majority of NGO (non-governmental organization) types and the majority of business types are like ships passing in the night," notes Robert Moritz, chairman of PricewaterhouseCoopers LP, speaking from a comfortable couch in the private "PWC Thought Cafe" in the Grandhotel Belvedere. "There's a small circle that intersects, but that intersection is fairly small."

Moritz sees a potential solution, though. "I think about how do you divide and conquer: Pick smaller issues as opposed to great thought leadership," he says. Thought leadership about the broad global future " is good," he says, "but there isn't enough accountability."

The dialogue in Davos shifts from capitalism to debate on the world's biggest problems. See what's in store for Day 2 of the World Economic Forum.

Discussions on day two of the World Economic Forum shift away from capitalism as a number of heavy hitters are diverting the spotlight to the world’s most vulnerable economies. Bill Gates opens the day with an interactive session called “Ensuring Food Security,” joined by Nigerian President Goodluck Ebele Jonathan and Jose Graziano da Silva, the new director general of the Food and Agriculture Organization of the United Nations. The delicate issue of the effects of unregulated production in emerging markets will be the focus of a number of sister sessions including “Manufacturing for Growth” and “Pain and Gain."

World Economic Forum

The Global Fund board chairman Simon Bland (L) and Microsoft founder and US billionaire philanthropist Bill Gates pose for a photo during the World Economic Forum in Davos, Switzerland on January 26, 2012. (Fabrice Coffrini, AFP / Getty Images)

Rafik Ben Abdessalem, Foreign Affairs minister of Tunisia, heads a provocative debate called “Rethinking Islam in Politics” along with Karen Armstrong of the Charter for Compassion group, Shadi Hamid of the Brookings Doha Center, and Amr Khaled of the Right Star Foundation. Gordon Brown then leads a plenary session called “Africa – From Transition to Transformation” with president Alpha Conde of Guinea, Goodluck Ebele Jonathan of Nigeria and Jacob Zuma of South Africa. Salam Fayyad, prime minister of the Palestinian Authority, and Shimon Peres president of Israel will hold an interactive session led by WEF founder Klaus Schwab entitled “Prospects for Peace in the Middle East.”  A televised debate called “The Implications of the Arab Spring” will round out a full day of geopolitical dialogue.

British Prime Minister David Cameron will address the WEF congress before a series of sessions dedicated to preparations and problems on the horizon as London prepares for the 2012 Olympic Games while driving sustainable economic growth.

Davos Dinner

Jagger Brings the Swagger

Mick Jagger, Chelsea Clinton, and Leymah Gbowee joined Newsbeast and Credit Suisse at a cocktail party at Davos.

Nobel Peace Prize Winner Leymah Gbowee talks to Tina Brown about her infamous confrontation with Charles Taylor.

Davos needs a lift this year: gloomy economic forecasts and gloomier-still snow forecasts have meant the WEF has lost some of its optimistic pep. But there is nothing like a cocktail-party cameo by Mick Jagger to bring that swagger back. Not that the NewsBeast dinner hosted by Tina Brown and Credit Suisse with co-hosts Pamela Thomas-Graham, Sheryl Sandberg, Abigail Disney, and Ellen Kullman in honor of 2011 Nobel laureate Leymah Gbowee, needed too much extra oomph. The guest list already included Chelsea Clinton and her husband, Marc Mezvinsky; Niall Ferguson; Dr. Oz; Iceland's first lady, Dorrit Moussaieff; and Arianna Huffington. Not that Leymah herself was overwhelmed, “When Tina introduced me I had to tell her, ‘You called me over to meet Mick Jagger, I have to tell you, Tina, I had no idea who he was ...'”

No Magic Wand

Merkel’s Bailout Warning

German chancellor warns that her country will not make empty promises.

Giving the opening address of the World Economic Forum’s annual meeting, German Chancellor Angela Merkel cautioned the crowd that Germany will not be making promises it cannot keep in the European bailout effort. Merkel strongly defended the euro and the European Union but also stressed that changes had to be made within the organization in order to stymie the crisis. She explained that "there is a clear lack of political structures and underpinnings to make this work." As the situation in Europe continues to worsen, with the IMF reducing its prediction of the world’s 2012 economic growth to 3.3 percent, Merkel has called for more political unity within the EU in addition to austerity measures. Despite the grim outlook and Merkel’s own warnings, she remained hopeful, telling the Davos attendees, "We are not going to become faint-hearted. We will not be able to wave a magic wand to address this.”

Read it at CNN

Brrrr

Ice and Fire

It's far below zero and they're miles away from the World Economic Forum, but the Occupy movement is more committed than ever.

The Occupy protest in Davos, known as Occupy WEF, has not drawn the same numbers as the original movement in New York's Zuccotti Park, but it's easy to understand why. It has been snowing for days, and at night temperatures in this mountain hamlet plummet far below zero. These hearty protesters have had no choice but to build igloos and yurts to protect them from the elements. A steady fire is burning to keep the protesters warm. Nearly 50 people gathered on Wednesday, but only half of them planned to spend the night. The security at the entrance to Davos is so tight they can’t get anywhere near the congress center, meaning the elite “1 percent” they are protesting against probably have no idea they are even there. Still, Fabien Molina, head of the Swiss Socialist Youth Party, says it’s worth it. “We are here as the 99 percent because we have to stand up to what the one percent are doing,” he says. “You can tell by the agenda inside that even they are second-guessing their chosen path.” 

Indeed, the topic of Wednesday’s opening panels effectively put capitalism on trial.  German Chancellor Angela Merkel officially opened the meeting Wednesday night with what amounted to a mea culpa. “Let us take a moment to reflect on what lessons we have learned from the global financial and economic crisis. Is what we have learned sufficient?” she asked. “There’s still room for improvement.”

 

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Complete Davos Schedule

From Angela Merkel’s opening address to a panel discussing the future of capitalism see the complete program for the World Economic Forum’s annual meeting.

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The Trillion Dollar Woman

Can Christine Lagarde steer Europe and America away from the brink of the next Great Depression?

Leymah Gbowee Talks About Confronting Charles Taylor

Nobel Prize Winner Leymah Gbowee's confrontation with Charles Taylor was a remarkable achievement in non-violent resistance; she tells Tina Brown about it in this interview

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George Soros on the Coming U.S. Class War

'The situation is about as serious and difficult as I've experienced in my career.'

Special Edition

Newsweek's Issues Issue

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WALL STREET

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Richer but Repressed

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The Great Currency Smackdown

U.S. ECONOMY

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