The Sunday Review

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MOOD SWINGS AT DAVOS

The Conference Of Conferences

The chill was not only in the air at the Swiss ski resort of Davos. The reception towards Asia was frosty too. CHUA LEE HOONG records her impressions of the recently- concluded World Economic Forum

THE setting was pure Frederick Forsyth -- except that assassins would have had a hard time picking out their targets amidst a swirling mass of hundreds of other very important people gathered in the ski resort of Davos (population 13,000) last week.

Against a backdrop of driving snow and sub-zero temperatures, 1,000 corporate chieftains, 300 senior political leaders, and 300 assorted leading lights of academia and the entertainment industry descended upon the town, 1.5 km above the sea, for six days of talking, feasting and networking.

Add 400 journalists from around the world, and you can hear Davos' infrastructure creaking.

Hotels were packed to the attics, rooms usually meant for children were called into service, and taxi-drivers collected premium fares with alacrity. On the public buses, CEOs rubbed shoulders with skiers and schoolchildren.

Swiss police with snow boots and sub-machine guns slung at the ready guarded every entrance of the conference venue, as well as hotels where assassination-prone VIPs were staying.

A Reuters photographer was denied entry to a hotel where United Nations secretary-general Kofi Annan was having a tete-a-tete with Palestinian leader Yasser Arafat.

This year's World Economic Forum saw not only a record snowfall (1.5 m at the end of its six days) but also a record number of participants, forcing conference organisers to impose ruthless limits on VIP retinue sizes. American Vice-President Al Gore's was, at 50, the largest allowed.

Senior Minister Lee Kuan Yew, who was last at Davos in 1990 and 1994, travelled only with his two security officers, private secretary, doctor, wife and one aide.

In recent years, Davos has become the place to be at this time of year for present (and future) movers and shakers of the world. European CEOs like it for the ski slopes, and the chance to hobnob with presidents and prime ministers from around the world. Others from farther afield come to be seen, and heard, by people who make the decisions in the countries they hope to do business with.

You go there to sell your products, your ideas, or, if you are a politician, your position on issues. Discreetly, of course, as there is nothing flashy about the Swiss way of doing things.

The conference venue is a three-storey complex, modern, but not lavish, a maze of auditoriums big and small, and plenty of hallways with sofas and bar counters where you may sit and drink with Messrs George Soros or Bill Gates.

It has become a de facto one-stop centre to spot trends for the coming year, to be updated on the latest thinking in economics, politics and finance, or in entertainment, music and medicine.

Conference organisers say health topics were subscribed heavily this year; perhaps the world economy's poor state of health got people worried about their own.

For some, the trek to Davos has become almost an annual pilgrimage. Mr Shiv Vikram Khemka, 37, India-born, Moscow-based scion of the Britain-headquartered Sun Group of companies, has been going for 11 consecutive years.

EXCLUSIVELY EGALITARIAN

HOW the World Economic Forum started off as a struggling conference, which from 1971 to 1987 was known as the European Management Conference, meant for executives to pick up American business tricks, is itself a story worthy of the management textbooks. That is, if founder Klaus Schwab decides to let others in on his secrets.

The austere and formal Dr Schwab, a graduate of Harvard University's Kennedy School of Government, used to be a business professor, until he decided to make the world his classroom. The WEF's lofty motto is "Entrepreneurship in the global interest".

Corporations (minimum turnover US$1 billion, or S$1.69 billion, to qualify) pay a membership fee of 20,000 Swiss francs (S$24,000) per annum for the privilege of receiving an invitation card; on top of that they pay 9,000 francs for sending one person to attend. That does not cover airfare or accommodation.

And what do they get for these sums? Well, opportunities to listen to, talk to and spar with, "people of interest" who are invited to Davos free by the WEF.

Mr Lee was one of them this year. By all accounts, he was worth their money: one Latin American economist is quoted in Asiaweek as saying: "When he talked about history, he sounded like an Oxford don; when he talked about the economy, he sounded like a Federal Reserve Board governor; and when he talked about corporations, he sounded like a McKinsey consultant."

According to one American journalist, Singaporean participants at Davos tend to be "a class apart".

The WEF evidently also values the contributions of Singaporeans like Information and the Arts Minister George Yeo, and Singapore's top United Nations diplomat in New York, Kishore Mahbubani, both of whom have been invited back to Davos more than once.

WEF insiders say they monitor the quality of speakers closely; those who do not perform up to par find themselves losing their expenses-paid invitations soon enough.

During discussion sessions, speakers are given just five minutes to speak -- and no aides are allowed. As Brigadier-General (NS) Yeo, who spoke on Asia's competitiveness this year, said, "You're on your own. You stand or fall by your own performance."

This ruthless stripping of protocol has enabled the WEF to run a tight ship. Only 73 full-time staff are on its payroll, yet it organises close to 10 conferences in different parts of the world each year, while publishing the bi-monthly "World Link".

Unrelenting levelling takes place in other ways: the day before the conference opened, I found myself just behind former US House of Representatives Speaker Newt Gingrich in the queue for security pass photos.

Discussion sessions stick to schedule with Swiss precision.

This year, to Dr Schwab's great lament, two sessions were held up: one because German president Roman Herzog's car was caught in the snow, and the other because snow forced Mr Gore to take the train instead of the helicopter.

So successful has Davos been in turning into what a Singaporean four-time participant calls the "conference of conferences", that the leading newspapers around the world turn out in force to devote full coverage to the event.

Troops from The Economist, Financial Times, International Herald Tribune, Wall Street Journal, Newsweek, Time and others jostled elbow-to-elbow with lone journalists from Poland, Ghana, Chile and elsewhere in the packed, smoke-filled and babel-filled media den.

ASIA: DOWN, BUT IS IT OUT?

WITH so many media microphones poised at the ready, Davos has become a good place for small nations to make their voices heard.

Last week, South African President Nelson Mandela took the opportunity to thank the international community for freeing his nation from apartheid.

Malaysian Prime Minister Mahathir Mohamad tried to explain his view on currency controls, but failed to convince the sceptical Davos audience.

He cut a forlorn and subdued figure, a far cry from his usual feisty, devil-may-care self.

Perhaps the cold had got to him; but more likely it was the cold shoulder from participants, especially those from the developed world. A lunch he hosted was poorly attended -- the only luncheon that day that was not sold out.

At his press conference, the devil was still there in the careless, take-it-or-leave-it answers he gave, but the spirit was elsewhere. The journalists focused on his sacked deputy, Datuk Seri Anwar Ibrahim; few bothered with his explanations of Malaysian currency controls.

From the way the questions were hurled, there was clearly no sympathy for him.

Contrast this to the press conference Palestinian leader Yasser Arafat gave.

Somehow, with tact, humour and a strong personal magnetism, the 69-year-old former terrorist drew questioners to him. Replies were almost like a benediction.

Applause broke out at the end, a rare occurrence for a press conference.

Asians had a tough time at Davos this year, except possibly for Singapore, whose SM Lee received star billing, not only from conference participants but also from the international media -- no mean feat.

When he spoke out for Asia at a plenary session, Japanese Finance Vice-Minister Eisuke Sakakibara, who was in the audience, was, in the words of one participant, "cheering him on, in joy and agreement".

Little wonder: Being on the receiving end of much criticism from the Americans and the Europeans for their economic tardiness, the Japanese found few allies in Davos this year.

The Chinese were smart; they stayed away. In contrast to past years when vice-premiers such as Li Lanqing (1998) and Zhu Rongji (1995) captivated Davos audiences, this year's most senior person was Taiwan negotiator Wang Daohan.

Perhaps domestic commitments (stability problems and upcoming May 4 celebrations) kept them busy. Perhaps it was the calculation that there was no point in opening themselves up to difficult questions.

Or perhaps it was the thought that Davos was simply a networking (as opposed to policy-making) platform they could do without at this time.

In contrast, the Americans were out in force. Mr Gore brought four cabinet secretaries and two deputy secretaries.

They could have wanted to show the world that despite Mr Bill Clinton's impeachment trial, America remained engaged fully in the world's affairs.

Or it could have been what one journalist called a "victory parade", a moment of triumph for America, as the only country in the world still recording high growth and stock market buoyancy.

Asia used to be the toast of Davos; now it is the burnt toast. Lianhe Zaobao political editor Poh Say Teck, who was at Davos in 1995, believes the "Golden Age of Asia" peaked around 1994 to 1996.

This year at Davos, the Europeans and Americans seemed uninterested in this part of the world, except in how fast it was going to recover. Among them, there was no doubt an element of what the Germans call schadenfreude, or glee in the misfortune of an erstwhile rival.

Compare this with Davos '93, when Europe was in what Karl Otto Poehl, former Bundesbank president, called its "deepest recession since World War II", and America was finding its economy going wrong. Both felt then that East Asia was gaining at their expense by causing unemployment at the lower end of their job markets.

Has there been an indecent haste in the way Europe and America are swinging away from Asia this year? BusinessWeek proclaimed in its latest issue the arrival of the "Atlantic century", as opposed to the "Pacific century" that was in vogue in the early '90s.

Europeans cheered; many of them have, after all, felt that talk about Europe being in decline was overdone.

The WEF, in a study headed by Harvard University professor Jeffrey Sachs, released during the conference last week, thinks that the pessimism about Asia is overdone.

"Three years ago Asia was everybody's favourite. Last year, it was everybody's scoundrel. You will find that the first mood will swing back again," he said.

Let us hope so. This time next year at Davos, hopefully both the temperature and the mood towards Asia will be warmer.

WHO'S WHO: Making an impact, positive or otherwise

Of Senior Minister Lee Kuan Yew, one Latin American economist is quoted in Asiaweek as saying: 'When he talked about history, he sounded like an Oxford don; when he talked about the economy, he sounded like a Federal Reserve Board governor; and when he talked about corporations, he sounded like a McKinsey consultant.'

Malaysian Prime Minister Mahathir Mohamad tried to explain his view on currency controls, but failed to convince the sceptical Davos audience. A lunch he hosted was poorly attended -- the only luncheon that day that was not sold out.

With tact, humour and a strong personal magnetism, Palestinian leader Yasser Arafat drew questioners to him. Replies were almost like a benediction. Applause broke out at the end, a rare occurrence for a press conference.

The WEF, in a study headed by Harvard Professor Jeffrey Sachs, thinks that the pessimism about Asia is overdone. 'Three years ago Asia was everybody's favourite. Last year, it was everybody's scoundrel. You will find that the first mood will swing back again.'

China's financial system rocked