By Walden Bello

On Saturday, January 30, Davos witnessed that rare thing: a mini-mutiny by over 500 corporate and government officials who refused to vacate the main Congress Hall to allow organizers of the World Economic Forum (WEF) to conduct a security check of the site before a plenary address by US President Bill Clinton. The corporate "civil disobedience" succeeded, and Clinton had to deliver his talk without his Secret Service being able to "secure" the place with their usual ultra-thorough methods.

Clinton lived up to expectations, in both style and content. Earnest and witty in presentation, he delivered a passionate defence of globalisation and free trade, warning that advocates of protectionism were "dead wrong." He acknowledged, however, that the new global economy driven by information technology was increasing the gap between the minority benefiting from it and the majority that were being left behind. The need, he said, was for institutions that would ensure that the benefits of trade are dispersed more widely.

He was, however, interrupted by applause only once, and he won few converts from the small number of developing country representatives present with his proposal to reform the World Trade Organisation by establishing a "Working Party" to look at the linkages between trade, environment, and labour rights. To Prof. Isher Ahluwalia, director of India's Council for Research on International Relations, Clinton's proposal "is really nothing but protectionism in disguise," a move that would eventually harm exports from developing countries. But there was dissent as well from some Northern environmentalists present. Brent Blackwelder, president of Friends of the Earth USA, asked: "Why must we give more power to the WTO to become the supreme body to rule over environmental and trade issues?"

A few hours before Clinton spoke, Larry Summers, US Secretary of the Treasury, painted a glowing picture of the US economy, prompting grumbling from non-US participants that the "Americans are descending on Davos to tell the rest of us about the virtues of their 'New Economy'." While not claiming that the US economy, now into its ninth year of expansion, has eliminated the business cycle, Summers drew the portrait of long-term economic expansion driven by investment, facilitated by budget surpluses, and based on the information revolution. While cautioning against complacency, the Treasury Secretary did not address growing fears about the collapse of the US stock market bubble, simply alluding to the "resiliency of our financial institutions."

Acknowledging that many developing countries are falling farther behind, Summers, a former chief economist of the World Bank, broke no new ground in his development prescription of "global economic growth, open markets, ambitious programs of debt relief, global public goods promotion, and robust and well-delivered flows of aid."

Developments in Asia have attracted considerable attention, with the Asian financial crisis and its aftermath being the focus of several panels. In the panel "Best Practices in Coming out of Economic Turmoil," a varied picture emerged of the current recovery. In Thailand, consumption-driven growth could be hobbled by the continuing paralysis of an effectively bankrupt banking system. In Indonesia, economic recovery was seen as being dependent on a resolution of the political crisis. Growth in the Philippines was seen as being restrained by pre-crisis structural problems and growing lack of investor confidence in the unravelling Estrada government. Korea's growth was seen as the most promising, being attributed to lower interest rates, increase in exports to the expansive US market, and the appreciation of the Japanese yen, which has made Korean exports more competitive relative to Japanese exports.

The role of the International Monetary Fund (IMF) in the financial crisis was a point that was underlined by the author in his presentation to the panel. The Fund's prescription of high interest rates, its providing rescue packages for foreign creditors, and its pushing the US government's agenda of deregulation and liberalisation on the Asian crisis economies — all these factors were singled out as aggravating the crisis. In contrast, there was greater appreciation during the discussion of the positive role of capital controls, such as those put into effect by Malaysia, in stabilising crisis economies.

The panel concluded with discussion of ways to reform the IMF, with the author presenting the audience with three proposals: immediate dismantling of IMF stabilisation and structural adjustment programs; immediate downsizing of the professional IMF staff from over 1000 to about 200; and the formation of a Global Commission on the Future of the IMF to decide on whether to radically reform or to decommission the Fund.

The growing role of NGOs in international policymaking, especially after their role in bringing about the collapse of the World Trade Organisation ministerial in Seattle in December 1999, has received considerable attention in Davos. Formerly largely limited to corporate executives, government officials, and establishment intellectuals, the Davos Summit invited a number of NGO representatives to share their perspectives this year, among them Vandana Shiva, the noted Indian feminist scientist; Thilo Bode, head of Greenpeace International; Martin Khor, director of Third World Network; and Victoria Tauli Corpuz, director of the Tebtebba Foundation.

This was, however, seen by NGOs as a token move, and a new coalition named "Public Eye on Davos" has been formed to monitor the goings-on in Davos, now the premiere annual event of the global elite. Among the activities it sponsored was a debate on Friday afternoon, Jan. 28, between NGO representatives and World Economic Forum chair and moving spirit Klaus Schwab. Prior to the debate, Public Eye released the following statement:

"Davos has become one of the capitals of globalisation. Every year, the small Swiss mountain resort hosts the Annual Meeting of the World Economic Forum and attracts about 2000 corporate CEOs, leading politicians, academics, and journalists...At the Annual Meetings, closed circles of business, government, academia, and media elites discuss problems of global importance.

"Public affairs," it continues, "must be negotiated in democratic fora, in a spirit of openness and participation, with full public debate and dissent. We therefore believe that there are two choices for the World Economic Forum. If it intends to remain an exclusive club of the world's corporate elite, the representatives of governments and international organisations must not negotiate their affairs at the Forum's exclusive gatherings in Davos anymore...If, on the other hand, the WEF intends to become a forum where important public concerns have a place to be debated, it must radically change its perspectives, rules, and proceedings. It should put concerns such as debt cancellation, fair trade, democratic control of international institutions, stopping the abuse of human rights and discrimination against women, preventing the privatisation of life forms and public goods, and changing unsustainable consumption patterns at the centre stage of its agenda."