1. Annual Meeting 2007
Shaping the Global Agenda: The Shifting Power Equation
Davos, Switzerland 24-28 January
The World Economic Forum is an independent
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the state of the world by engaging leaders in
partnerships to shape global, regional and
industry agendas.
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(www.weforum.org)
3. Preface
“ We are living in an increasingly schizophrenic
world where economies are booming and
global signs are promising but underneath are
“
economic, political and social risks as well as
imbalances and inconsistencies.
Klaus Schwab
Founder and Executive Chairman of the
World Economic Forum
The World Economic Forum Annual Meeting again The focus on the shifting power equation across
offered participants – both those in Davos and those economic, political and social relationships served to
joining us through the Internet – the opportunity to highlight how the thinking of leaders has evolved over
examine the many critical forces affecting the global the past years. Whether on the G8 agenda, or that of
agenda, gain a deeper understanding of these business, not only did participants agree on priorities –
pressing issues and create fresh ways to meet the climate change and the need for sustainable
challenges ahead. development were certainly at the forefront – but they
also formed a consensus on the shape any response
The theme of the Annual Meeting 2007, Shaping the must take: the only way to create effective solutions is
Global Agenda: The Shifting Power Equation, struck a through the combined effort of leaders from business,
chord with participants, reflecting the unease we all government and civil society to identify problems
feel living in times that both inspire great optimism and clearly, discuss the relevant issues and understand the
raise grave concerns. Positive sentiment about the trade-offs.
vibrant global economy and the prospects for
continued growth was matched by persistent anxiety The World Economic Forum Annual Meeting 2007
about ongoing shifts in the geopolitical landscape and drew leaders from business, government, international
the difficulty of addressing such complex problems as institutions, non-governmental organizations,
poverty in Africa and instability in the Middle East. The universities and other communities. Together with our
growing economic and strategic importance of Members and Partners, we renewed our commitment
emerging economies and resource-rich nations, the to driving the global agenda forward through
recognition of the urgent need to address climate consensus building and meaningful action. We look
change, and the exciting but sometimes disquieting forward to continuing the conversations and exchange
implications of new community models, often virtual in of ideas that began in Davos at our regional meetings
nature, gave the assembled business, government and through Forum initiatives and industry activities
and civil society leaders much to discuss, digest and over the coming year.
act upon.
3 | World Economic Forum Annual Meeting 2007
4. The Shifting Power Equation – Executive Summary
“ “
Perspectives are changing. The fact
“ Globalization is the single greatest
“
is that a completely new global
economic engine of our time
balance of power is being created.
Angela Merkel Tony Blair
Federal Chancellor Prime Minister
of Germany of the United Kingdom
The theme of the World Economic Forum Annual Davos, as E. Neville Isdell, Chairman and Chief • Agreement among four global accounting firms to The Annual Meeting agenda was designed to help the
Meeting 2007 – Shaping the Global Agenda: The Executive Officer of The Coca-Cola Company, put it, is work with the World Economic Forum Partnering 2,400 participants in Davos and those outside who
Shifting Power Equation – underscored the particular the “epicentre of engagement.” The Meeting’s Against Corruption Initiative (PACI) to support the joined the conversation through the Internet – perhaps
challenge of this period of rapid globalization. “We are outcomes amply illustrated the unique approach that fight against corruption through their Second Life avatars – to understand the
living in an increasingly schizophrenic world where the Forum brings to the global agenda through • Renewed affirmation of support for the PACI from many aspects and implications for business and
economies are booming and global signs are participating government, business, media, academic the heads of the World Bank, the African societies of globalization and the shifting power
promising but underneath are economic, political and and civil society leaders from across countries, Development Bank, the Asian Development Bank, equation. The programme was organized under four
social risks as well as imbalances and continents and cultures. It was precisely because of the European Bank for Reconstruction and sub-themes – Economics: New Drivers; Geopolitics:
inconsistencies,” said Klaus Schwab, the Forum’s this potent mix of actors that, at this Meeting more Development and the International Finance The Need for Fresh Mandates; Business: Leading in a
Founder and Executive Chairman. “We want to make than any previous one, the Davos community defied Corporation Connected World; and Technology and Society:
sense of this world and shape the global agenda, the risks, concerns and lingering doubts to move from • Release by the World Economic Forum and the Identity, Community and Networks.
taking into consideration the fragilities of global awareness and commitment to concrete action on Reinventing Bretton Woods Committee of the final
development and global systems. This is the unique climate change and sustainability. report on a two-year, public-private review of the
contribution we make each year – to analyse the state international monetary system in cooperation with The Forum would like to thank the distinguished
of the world, the challenges, risks and opportunities. Among the outcomes of the Annual Meeting: G20 governments Co-Chairs of the World Economic Forum Annual
We sort out our priorities and come out with solutions Meeting 2007, each of whom provided invaluable
to our problems.” • Decision by 30 trade ministers to restart the Doha Another notable outcome from Davos was the support to the proceedings and brought their
Round of global trade negotiations at the sub- recognition that the Forum and its partners in the considerable experience and wisdom to the
ministerial level which subsequently led to a full business community and civil society have a discussions.
resumption of the talks responsibility to promote open discussion of
“ The rise of China, India and other • Formation of the Climate Disclosure Standards globalization, both its advantages and disadvantages, Michelle Guthrie, Chief Executive Officer, Star
Board, a new international partnership to establish a how those benefits can best be enhanced and Group, Hong Kong SAR
countries in Asia is not a threat but an
generally accepted framework for climate risk- shared, and how the negative effect can be reduced E. Neville Isdell, Chairman and Chief Executive
opportunity. When you see the incredible
related reporting by corporations and those affected helped. “Most people who are hurt Officer, The Coca-Cola Company, USA
consumer market opportunity for global or think they are hurt by globalization know it,” said Sunil Bharti Mittal, Chairman and Group Managing
• Establishment of a joint Israeli-Palestinian business
businesses, it is quite extraordinary. The Renault President and Chief Executive Officer Carlos Director, Bharti Enterprises, India
council to encourage and facilitate cooperation
“ Ghosn, who is also the President and Chief Executive James J. Schiro, Group Chief Executive Officer and
between Israeli and Palestinian business leaders
shifting power equation does not have to
Officer of Japanese automaker Nissan. Added Chairman of the Group Management Board, Zurich
and to reinforce economic relationships and help
mean that there are winners and losers.
Unilever Group Chief Executive Officer Patrick Cescau: Financial Services, Switzerland
peace building efforts
Michelle Guthrie
“Globalization is worth defending. It is also worth Eric Schmidt, Chairman of the Executive Committee
• Creation of an alliance of leading companies to
being explained.” and Chief Executive Officer, Google, USA
bring power to villages in sub-Saharan Africa
4 | World Economic Forum Annual Meeting 2007 5 | World Economic Forum Annual Meeting 2007
5. Most people who are hurt or think they
“ are hurt by globalization know it. Most
people who benefit do not know it. What
“
we need to do is come in with concrete
cases and messages.
Carlos Ghosn
Carlos Ghosn
President and Chief From left to right: Eric Schmidt, Chairman of the Executive Committee and Chief Executive Officer, Google, USA; E. Neville Isdell, Chairman and
Executive Officer,
Chief Executive Officer, The Coca-Cola Company, USA; James J. Schiro, Group Chief Executive Officer and Chairman of the Group Management
Renault, France;
Board, Zurich Financial Services, Switzerland; Michelle Guthrie, Chief Executive Officer, Star Group, Hong Kong SAR; Sunil Bharti Mittal,
President and Chief
Chairman and Group Managing Director, Bharti Enterprises, India
Executive Officer,
Nissan, Japan
Economics: New Drivers Geopolitics: The Need for Fresh Business: Leading in a Connected Technology and Society: Identity,
Mandates World Community and Networks
While globalization has resulted in an unprecedented
expansion of global trade and investment that has The international community’s capacity to handle the The proliferation of technology, global risks and the The rapid convergence of telecommunications, cable
spurred the world economy to grow at its fastest pace complex and fast-changing global agenda is multiplying pressures from rapid globalization have television and the World Wide Web is driving the
in three decades, lifting hundreds of millions out of hampered by the sometimes perplexing shifts in increased the responsibilities of companies and their growth of new services that blur the line between
poverty, the benefits are not evenly shared. Renewed power relationships that are playing out, particularly leaders, challenging them to find new and innovative audience and producer, resulting in an explosion of
efforts are needed to mitigate the negative effects of the emergence of new poles of influence and non- approaches to doing business. Chief executives must user-generated information, entertainment and
globalization. state actors. now look beyond shareholder interests and cater for services. The impact of this power shift is affecting
the needs and concerns of a wider group of everything from corporate communications to
• Growing unease, in particular about job creation • While the US remains the dominant world power, its stakeholders. elections, from the way companies conduct R&D to
and security, could lead to political backlash. To position is increasingly challenged or constrained by the social behaviour and privacy of individuals.
counter this, both government and business have to new emerging players such as China and resource- • The CEO’s main task is to enhance collaboration
better communicate the benefits of globalization. rich Russia, as well as states with nuclear and develop new partnerships to address everything • The expansion of customer-generated content and
More measures must also be taken to insulate capabilities and ambitions such as North Korea and from the challenge of research and development to online communities on popular websites such as
workers from the negative effects of competition in Iran. strategic issues such as climate change. YouTube and Second Life have perplexed
the increasingly global labour market. • This new world order requires a fresh, pragmatic Companies cannot rely on old command-and- incumbents but opened tantalizing new business
• Greater attention must be paid to the impact of the approach to global governance and management of control models. opportunities.
rising tide of capital flooding through the world’s the global agenda, including the reform of • Companies also face rising pressures from As they develop in quality, virtual worlds could
•
financial markets and the fact that financial international institutions and agreements to technology-empowered consumers, employees who become the common interface for all Internet usage.
innovations are deepening the connections among rebalance relationships in the world to acknowledge want to work for socially responsible enterprises, The growth of online communities is spurring
•
global markets. power shifts. and shareholders who demand greater transparency debate about the ability of the Internet to break
• Urgent steps must also be taken to combat the • The ultimate power shift is the rise of non-state and better governance. down barriers based on geography, nationality, sex
negative effects of increased industrialization and actors – no longer a term that instantly connotes • The expanding role of emerging markets both as a or appearance. The practice of using avatars is also
energy consumption related to rising living malevolence as it had in the past. Grassroots destination for investment and as a source of raising questions about the impact on social
standards. Because of the difficulty in forging a movements, communities, civil society and investor capital is raising difficult questions about interaction and psychological health.
global consensus on an approach to climate companies are forging novel partnerships to everything from national security to clashing Grave concerns about privacy, security and online
•
change, nations should undertake unilateral efforts develop new solutions and tackle global challenges cultures. In emerging markets, CEOs must also fraud threaten to derail the future of Internet
to limit carbon emissions and support international such as climate change. address the particular challenge of human resource commerce.
mitigation efforts, such as carbon trading management. IT advances are changing the way institutions and
•
programmes. • Intense scrutiny and stress on the management of companies collaborate within their organizations and
• Efforts are also required to plan for coming public companies are increasing interest in with each other, particularly in R&D.
demographic imbalances, focusing on job creation privatization and fuelling in part the rapid expansion
for the young and pension and healthcare reforms of private equity investment. But private ownership
to address ageing populations. does not shield companies from the pressures to
which they must respond.
6 | World Economic Forum Annual Meeting 2007 7 | World Economic Forum Annual Meeting 2007
6. Economics: New Drivers
“ “
I worry about how the US responds to the fact that its hyperpower status in terms of wealth India is a willing partner on climate change, but clearly it’s not a willing punching bag because it
“
has to be reduced. It doesn’t mean that the US is any worse off but the US response is has its limitations. A billion people are going to be consuming a lot of services and goods that
“
something that the world has to worry about. will create emissions. We will need technology; we will need money. But India will be willing to
align with the world.
Laura D. Tyson
Sunil Bharti Mittal
Laura D. Tyson Min Zhu Montek S. Ahluwalia Sunil Bharti Mittal
Professor of Group Executive Vice- Deputy Chairman, Chairman and Group
Economics, University President, Bank of Planning Commission, Managing Director,
of California, Berkeley, China, People's India Bharti Enterprises,
USA Republic of China India
Since the opening of China and the fall of the Soviet This astonishing growth in global wealth is creating its Perhaps the biggest challenge stems from the uneven In short, this new period of global growth is producing
bloc, the ideological shackles of the cold war have own problems, however. Widespread pollution is distribution of surging global wealth. Millions are being many of the same imbalances and inequities that
been cast aside, reuniting the world’s biggest markets wreaking havoc on the environment, causing changes lifted out of poverty, it is true. Rising fortunes are during the Industrial Revolution gave rise to
and ushering in a gilded age of growth, the likes of to the climate that sustains life itself. Booming spawning a new cosmopolitan class of global super- nationalism, fascism and communism. Many fear that
which has not been seen since the Industrial demand for resources has created shortages of raw rich – free to roam where taxes are lowest. Yet similar reactionary or even retrogressive forces could
Revolution. materials, sending commodity prices up and thrusting incomes among the politically powerful middle class again be rising.
resource-rich nations into disproportionate positions of that they leave behind are rising more slowly – so
The United States is still an economic powerhouse, influence (see Figure 1). slowly that to many it seems as though they are Heading off the political backlash will require a
but it has been largely supplanted at the forefront of standing still or even slipping behind. “They have a concerted effort by both governments and business to
growth by China and India and other emerging diminishing sense that we are all in the same boat,” better publicize the benefits of globalization. “Most
Figure 1 World Commodity Prices and Demand from BRIC Nations
economies. “The world is no longer as dependent on said former US treasury secretary Lawrence H. people who are hurt or think they are hurt by
As the developing world consumes more metals, prices are rising
a single locomotive,” said Economics Professor Laura Summers, now the Charles W. Eliot University globalization, know it. Most people who benefit do not
350
D. Tyson. Even the once-moribund economies of Professor at Harvard. know it,” said Carlos Ghosn, who heads Renault and
300
Index (100=1996)
Europe and Japan are enjoying growth as China and Nissan. “What we need to do is come in with concrete
250
200
India provide new sources of labour and consumer cases and messages.”
150
demand that are helping to keep the cost of capital 100
low as global incomes rise.
“
50
Let’s face it: to manage globalization in
0
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
developing countries a huge amount of
Steel price
Steel consumption
Aluminium price
Aluminium consumption
Copper price
Copper consumption
energy has to be put politically – at least in
Source: Datastream; International Iron & Steel Institute; World Bureau of Metal Statistics
an open society – on arguing these issues
“ Insecurity threatens globalization The mountains of wealth are exerting new and little and educating the public. You need a
“
understood pressures on financial markets. Prosperity
and the growth that we are enjoying comparable debate in the wealthy
“ has created a demographic paradox: lower birth rates
today. There is a danger that some countries that isn’t happening.
that are leaving the wealthiest nations short of new
societies will look inward. workers to help finance the rising cost of healthcare Montek S. Ahluwalia
and retirement among older generations.
E. Neville Isdell
8 | World Economic Forum Annual Meeting 2007 9 | World Economic Forum Annual Meeting 2007
7. From left to right: Gloria Macapagal Arroyo, President of the Philippines; Felipe Calderón-Hinojosa, President of Mexico; John McCain, Senator
from Arizona (Republican), USA; Paul D. Wolfowitz, President, World Bank, Washington DC; Ellen Johnson Sirleaf, President of Liberia
Urgent steps also need to be taken to mitigate the programmes, even in the absence of a global Ultimately, the negative impact of a rapidly globalizing
negative side effects of globalization. Climate change consensus on what form those efforts should take. labour market will increasingly affect workers in
is an especially critical global priority. While developed Some also argue that, because a multinational developed countries, which could lead national
countries to date have the highest carbon emissions, solution is unlikely to emerge in time to reverse climate politicians to promote greater insulation of domestic
fast-growing developing economies are rapidly change, efforts must be made to prepare for the employment and protectionism. How can this be
catching up (see Figure 2). China is expected to inevitable impact of it. avoided? Some suggest a kind of universal tax on the
surpass the US as the top producer of greenhouse “cosmopolitan” class – those who can most benefit
gases by 2009. Another vexing issue is the rising tide of capital from globalization – or at least some form of
flooding through the world’s financial markets, though international tax harmonization. Others believe the
it is not clear if anything can or needs to be done to answer may lie in shifting the burden of health
Figure 2 Developed vs Developing World Carbon Emissions
address this development. Cheap capital has been a insurance to the state and beefing up public
Developed world countries are major emittors of carbon dioxide, to date
boon to developing nations, lowering their financing unemployment insurance. “We have to move the
30
costs and enabling them to dig their way out of debt. social protections from the basis of the corporation to
25
metric tons of carbon dioxide)
Carbon emissions (billion
But to compensate for low interest rates, investors are the basis of society,” said Columbia University
20
taking advantage of cheap funding costs to make Economics Professor Joseph E. Stiglitz. “The
15
more leveraged investments. An increasing amount of While most funds do not disclose their portfolios, recognition of that is a change in mindset.”
10
public pension funds and private savings are flowing many have been investing increasingly in sophisticated
5
into hedge funds (see Figure 3) and private equity and little understood instruments such as credit
0
1903
1906
1909
1912
1915
1918
1921
1924
1927
1930
1933
1936
1939
1942
1945
1948
1951
1954
1957
1960
1963
1966
1969
1972
1975
1978
1981
1984
1987
1990
1993
1996
1999
2002
funds, which in turn use unconventional investments derivatives. With multilayered, leveraged investments
Developed nations
Developing nations to generate higher returns. including funds of funds, institutional funds and hedge
funds, bankers and regulators worry that the impact of
Source: World Resources Institute
any financial shock could be amplified. “Countries
Figure 3 Hedge Fund Assets need to do their homework to reduce the risks of
Hedge funds manage 30 times more assets today than they did in 1990
While efforts are being made to improve energy these instruments and investing habits. We need to
efficiency in China and India, breakneck economic improve documentation and address legal issues,”
10,000 $1,400
Assets under management (US$, billion)
9,000
growth is taking a devastating toll on the said Chilean Central Bank President Vittorio Corbo.
$1,200
Number of funds
8,000
environmental health of these nations. Despite the $1,000
7,000
6,000
recent jump in oil prices, research for greener energy $800
5,000
$600
by the world’s largest polluter, the United States, has 4,000
3,000 $400
been shrinking. Given the rising costs associated with 2,000
$200
1,000
climate change, it has become clear that nations 0 0
should undertake unilateral efforts to limit their own 1990 2000 2006
Assets
Funds
carbon emissions and to support international efforts
to reduce emissions, such as carbon trading Source: Hedge Fund Research Inc.
10 | World Economic Forum Annual Meeting 2007 11 | World Economic Forum Annual Meeting 2007
8. Getting the Doha Round Back on Track Reshaping the International Monetary System
On the penultimate day of the World Economic Forum The World Economic Forum and the Reinventing The report includes a selection of the papers prepared
Estimates of Potential World Gains from Doha
Annual Meeting 2007, World Trade Organization Bretton Woods Committee (RBWC) issued at the for the project that offer specific proposals for reform
Will they be enough to persuade governments to incur relevant costs?
(WTO) Director-General Pascal Lamy told participants World Economic Forum Annual Meeting 2007 the final in such areas as strengthening the international
$350
300
that the discussions among the 30 trade ministers in report of a two-year review of the international adjustment process, improving crisis prevention and
Estimate of potential gains in
global income (US$, billions)
World Bank estimates
Carnegie Endowment estimates
250
Davos had given new impetus to the stalled Doha monetary system conducted in cooperation with the resolution instruments, and modernizing and
200
Round. “Today’s ministerial meeting has put quite a lot Group of 20 (G20) governments. Entitled The rationalizing the governance of the system’s principal
150
of energy into the notion that the landing zone is in International Monetary System, the IMF and the G20: institutions. Among the notable proposals is one
100
50
sight,” said Lamy. Added Kamal Nath, India’s Minister A Great Transformation in the Making?, the report presenting a new “business model” for the IMF.
0
Full liberalization Likely Doha scenario*/Central Doha scenario**
of Commerce and Industry: “Despite the cold outside, concludes that a critical mass of governments Another outlines significant yet feasible improvements
* World Bank likely Doha scenario entails reducing agricultural tariffs 44% by developed countries and 21% by
we have been able to defreeze the talks that were appears ready to try to adapt international financial in the exchange rate system that could help prevent
developing countries, and manufactures tariffs by 50% by developed countries and 33% by developing countries
** The Carnegie Endowment central Doha scenario entails agricultural ad valorem equivalents (AVEs) reduced by 36%
frozen.” Days later, negotiators at the WTO in Geneva institutions to a world characterized by increasingly large, persistent economic imbalances of the kind that
by developed countries and 24% by developing countries (excluding LDCs), and manufactures AVEs reduced by 50% by
developed countries and 33% by developing countries (excluding LDCs).
agreed that full talks to set a framework for concluding large cross-border private capital flows, wider threaten world financial stability today.
Source: World Bank, Carnegie Endowment
the Round would resume. The negotiations were geographic distribution of economic activity and
suspended in July 2006 largely due to disputes over deepened regional macroeconomic and international
“
agricultural tariffs and subsidies. Earlier, the World Economic Forum’s International trade policy coordination.
An important transformation of the international
Business Council (IBC) of leading CEOs from both
monetary system appears to have begun in
developed and developing countries had called for a From 2004 to 2006, the Forum and the RBWC
revival of the Round. “The impasse with the Doha organized a series of public-private roundtables on which the Group of 20, by virtue of its relatively
Round threatens to undermine growth and the spread different aspects of the international financial
“ informal and representative nature, may well
It has to be more than a lowest-common- “
of economic opportunities to all,” the IBC warned in a architecture in cooperation with selected finance
“ prove to be the crucible in which its primary
statement. “Trade is the most effective means we can ministries and central banks of the G20. Seven
denominator deal that doesn’t generate
features are forged.
offer to the members of the global community different G20 governments hosted these discussions –
trade flows.
struggling to lift themselves out of poverty.” co-chairing them with the Forum and the RBWC –
Richard Samans
Susan Schwab supported by a research programme in which leading Managing Director, World Economic Forum
US Trade Representative public, private and academic experts prepared more
than 50 discussion papers.
“ We are now in the endgame. Either way, this
is going to end in success or failure in the next
two to three months. It would be a terrible
“
misjudgement if we allow what we have now
to slip away.
Peter Mandelson
Commissioner, Trade, European Commission, Brussels
12 | World Economic Forum Annual Meeting 2007 13 | World Economic Forum Annual Meeting 2007
9. Geopolitics: The Need for Fresh Mandates
“
“ We, as representatives of the states, The power equation is becoming a more
cannot solve everything alone and complex differential equation. Power is
cannot solve anything at all unless we being diffused horizontally and vertically
“
rapidly improve our partnerships with to make power more multilevel and
“
business, academia and society as a multipolar.
whole.
Micheline Calmy-Rey Timothy Garton Ash
President of the Swiss Professor of European
Confederation and Studies, University of
Federal Councillor of Oxford, United
Foreign Affairs, Kingdom
Switzerland
The fickle weather in Davos during the week of the The world has a lot on its plate. The global agenda in Meanwhile, the quest for energy security is driving the What this means is that old attitudes and ways of
World Economic Forum Annual Meeting was oddly this world of rapid globalization – for good or ill – runs foreign policy strategies of many countries and leading thinking have to be discarded. Ideology-driven, cold
appropriate. The initial warmth and lack of snow were long with issues demanding constant attention. to new international alliances. Resource-hungry China war-era approaches can no longer address the more
naturally a palpable reminder of global warming, a Among the most pressing: instability in the Middle has been busy forging relations in Africa, and fluid and complex problems of the world.
priority issue this year, while the on-off precipitation East, particularly Iraq; communal strife in Africa, elsewhere, to secure its energy needs (see Figure 4), “Perspectives are changing,” said German Chancellor
and up-down temperatures that gave way to steady notably Darfur; the threat of terrorism; the proliferation taking a value-neutral, non-judgemental approach that Angela Merkel. “The fact is that a completely new
sun on the final day reflected the unpredictability of of materials and weapons of mass destruction; public can be a welcome alternative to countries tired of global balance of power is being created.” East-West,
world events and how quickly situations can change. health crises stemming from the spread of infectious hectoring by the West about governance reform and North-South, left-right – the adversarial or competitive
As sessions began, participants were digesting US diseases; energy security worries, coupled with the human rights. In addition, the world has awakened to paradigms of the past century no longer apply.
President George W. Bush’s announcement in his need for urgent action on climate change; the the threat from rogue states and failed states that Instead, in this age of heightened risks, what is
State of the Union address that the US would reduce consequences of the economic and political rise of could become havens for militant extremists. Finally, required to confront the many challenges facing the
oil dependency by 20% over the next 10 years. During large emerging markets, including China and India non-state actors both benign and malevolent – from international community is a new pragmatism that is
the Meeting, reports that American military forces (emerging markets now constitute half the world committed NGOs and popular bloggers to terrorist based on a willingness to take a fresh look at issues,
were targeting alleged Iranian agents in Iraq raised economy); and the struggle to conclude the groups and unknown viruses that could spawn to adopt new ways of governance, to look for
concerns about a potential conflict between the US multilateral trade talks. pandemics – have also emerged as influential players. commonalities rather than focus on differences with
and Iran. By the traditional farewell lunch on the sunny “The power equation is becoming a more complex other countries, to implement new mechanisms for
Schatzalp, many were talking about the decision the The international community must focus on these and differential equation,” said Oxford University Professor cooperation that involve business and civil society, to
day before by 30 trade ministers assembled at Davos other problems even as shifts in the geopolitical Timothy Garton Ash. “Power is being diffused institutionalize new power relationships, and to
to restart the Doha Round of global trade landscape make it even more difficult to do so. horizontally and vertically to make power more manage a fair rebalancing of the global power
negotiations. Consider the arrival of new centres of power, nations multilevel and multipolar.” equation.
or regions made influential by commercial clout,
Figure 4 Africa's Trade with China
energy resources and nuclear capabilities. For In his address at the closing plenary, Tony Blair called
“
China has become an important strategic partner
example, the renaissance of Asia to a large extent on for just such adjustments that would aim at creating a
Insecurity exists everywhere – in the East $25,000
the back of surging economic growth in China and “more muscular” multilateralism. “A key part of our
and West. We have to think about common India, each with a population of more than one billion, international dialogue must now be strengthening the
20,000
Trade (US$, millions)
goals and looking for the proper solutions in is steadily pulling the geopolitical centre of gravity instruments and institutions – those between
15,000
across the Pacific Ocean. The new power players governments but also those within civic society – that
all cultures to find common ground, fight 10,000
“ challenge and, in some cases, constrain US can build capacity,” said the prime minister. “We need
extremism and insecurity, and then we may 5,000
dominance. new networks, new relationships between countries
hope for a better future. 0
and between people that mobilize the practical means
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
of effecting change.” Blair proposed that the United
Mohammad Khatami
Exports to Africa Imports from Africa
Nations Security Council be expanded, that UN
Source: IMF structural and administrative reforms push ahead, that
14 | World Economic Forum Annual Meeting 2007 15 | World Economic Forum Annual Meeting 2007
