Development, Accumulation and the World Economic Forum

Khaldoon al-Mubarak at Davos, 2008
Khaldoon al-Mubarak, Abu Dhabi Group Executive and Chairman of Manchester City FC, at Davos, 2008

In 1971, economist and ex-academic Klaus Schwab founded a ‘transnational agency’, bringing together the most important names in economics, politics, business and culture for an annual meeting in Davos, Switzerland. The World Economic Forum, started as the European Management Forum, is debated as both an organisational and developmental alliance, to increase financial health for every corner of the globe, and an aid to the super-rich to maintain their profits and increase their market shares. It is certainly the case that, although the discourse of the WEF is focused around development and the spread of wealth, in practice, the development of capitalism and increasing the accessibility of markets are both policies extremely useful to those involved in the forum – corporations and individuals, either with huge profits to uphold, or with funds to invest. The debate on the WEF centres on Schwab’s mission statement: “Committed to improving the state of the world”. Improving it for whom?

The WEF is an interesting collective, as it seems to be one of the few truly ‘state-less’ groups that, due to the importance of its members, holds power on the global stage. Due to its private foundations, the WEF has come under the critical eye, including that of Kees van der Pijl, who wrote in 1998 that “…[the WEF] is the true international of capital, the first identifiable forum in which concepts of control are debated and if need be, adjusted, on a world scale…”. The question here is whether a lobbying group containing such prominent members of global politics and economics should be allowed to “adjust” power in economic world order.

Praise for the World Economic Forum

A self-written history of the WEF from 2010 lists quotes from numerous leading individuals, congratulating Schwab and his agency for the work that it performs in global economics. The 20 names mentioned were made up of:

  • 3 academics – including Professor Susan Hockfield, President of MIT
  • 4 politicians/diplomats – including Kofi Annan, Secretary-General of the UN (1997-2006) and Tony Blair, UN Envoy and ex-PM of the UK (1997-2007)
  • 13 global business leaders – including Peter Sutherland, Chairman of Goldman Sachs, Orit Gadiesh, Chairman of Bain and Co., and Michael Dell, Chairman and CEO of Dell

It seems that of the opinion that the WEF was willing to publish, the majority comes from those who are set to directly gain from the economic policy that the agency can influence: generally, opening up as much of the global economy to penetration by capital as possible, and ‘oiling the cogs’ of business for those already generating huge profits.

Membership of the World Economic Forum

Around 2,500 individuals are invited to the annual meeting in Davos, although there are several regional gatherings every year on top. Of these guests, around 1,500 are businesspeople, the rest are made up of media figures, government officials, academics, religious leaders etc. Separate to the actual meeting guest list, the WEF has a capped list of 100 ‘strategic partners’ that work with the agency to achieve certain economic goals in their fields. The list is eye-opening, made up of:

  • 97 private companies – 46 of which are banks or professional service providers, the rest operating in energy, communications, technology, transport, chemicals and retail
  • 2 public agencies – state owned fund management groups from Bahrain and Kuwait
  • 1 charity – the Bill and Melinda Gates Foundation

These facts push the idea that the WEF is a transnational planning agency for capital. Almost half of the private members – banks and financial/professional service providers – rely on capital itself for their existence as corporations, let alone the others that make huge amounts of money from the world economy (the typical entry requirements for membership, in real terms, is roughly $5bn in annual turnover). Activist and musician Bono, lead singer of Irish band U2, referred once to the meeting at Davos as “…[a group of] fat cats in the snow”.

Business Initiatives

In 2002, the WEF held its annual meeting in New York, to restore political and economic confidence in the city post 9/11. Whilst there, the agency launched the International Business Council (IBC). The council can be interpreted in two ways: (a) as a development agency, and (b) as a pro-capitalist initiative. The mission statement of the council is to “Promote peace through commerce by providing business consulting services in emerging markets”. The council, therefore, could be a genuine effort on the parts of the 100 enlisted businessmen to share their expertise with developing companies and economies, and to improve the financial health of world in general. However, its motive could also be aimed towards the indirect effects of improving the well-being of markets in undeveloped economies – that of increased access for their own capital. The prominence of financial services and investment companies in the WEF adds emphasis to this latter idea, despite the philanthropic discourse surrounding Schwab’s motive for founding and running the forum. Unfortunately, the nature of capitalism does sour even the most well-meaning ideas and people.

Development Initiatives

There have been, however, policies born out of the WEF that have been highly commended almost without criticism. In the very same year that the IBC was formed, then-UN Secretary-General Kofi Annan launched the Global Health Initiative (GHI), active across Africa and Asia. The initiatives engage businesses spanning many industries and regions with governments, NGOs and international organisations, with an aim of fighting infection in undeveloped areas of the world – namely, HIV/AIDS, malaria and tuberculosis. The initiative helps groups form partnerships in fighting these diseases, working with WEF members, as well as existing institutions such as the WHO, UNAIDS and UNICEF, providing a private-public bridge to improve the lives of those in danger. In this sense, the WEF uses its business contacts and economic influence to improve the success of the missions of those already engaged in humanitarian work. While this initiative in particular is not economic in nature, the WEF makes use of economics in order to put it into practice.

Klaus Schwab, Founder and CEO of the WEF
Klaus Schwab, Founder and CEO of the WEF

Conclusion

The WEF has a diverse membership and an even more diverse guest list at its events. The power that those who attend hold, when combined, is enormous, and while the world must be careful not to let those groups abuse that combined power, the benefits from alliances such as the WEF could be huge for both the developed and the developing world. Whether the current motive for inclusion in the WEF is the maintenance of a system in which multinational corporations can continue to make money and increase their market shares in new regions, or whether it is to increase the economic participation of the underdeveloped world, is almost irrelevant. The fact is that, as exemplified by initiatives such as Annan’s health programme, the WEF can perform an awful lot of good, and Schwab and his board of directors must ensure that their philanthropic brainchild is indeed used responsibly and for the betterment of humanity, not the 2,500 members of the global elite that ski at Davos every January.

Bibliography

Literature

Simon Clarke (ed.), 1991. The State Debate. Basingstoke: MacMillan

Kees van der Pijl, 1998. Transnational Classes and International Relations. London: Routledge

Klaus Schwab, 2008. ‘Global Corporate Citizenship: Working with Governments and Civil Society’. Foreign Affairs (87:1) pp. 107-118

Online Sources

World Economic Forum, 2010. ‘The First 40 Years’. Available at www.weforum.org, retrieved 04/03/2013

World Economic Forum, 2006. ‘Global Health Initiatives’. Available at www.weforum.org, retrieved 25/03/2013

Forbes, 2006. ‘Bono Teams Up With Amex, Gap for Product Red’. 29th January 2006. Available at www.forbes.com, retrieved 25/03/2013

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