Davos to seek reforms of ‘outdated’ capitalism

ZURICH - Agence France-Presse

A small group of protesters carrying placards is surrounded by riot police during an anti World Economic Forum demonstration in Bern, Switzerland, on Jan 21. AP photo

Economic and political elites meeting this week at the Swiss resort of Davos will be asked to urgently find ways to reform a capitalist system that has been described as “outdated and crumbling.”

“We have a general morality gap, we are over-leveraged, we have neglected to invest in the future, we have undermined social coherence, and we are in danger of completely losing the confidence of future generations,” said Klaus Schwab, host and founder of the annual World Economic Forum (WEF).

“Solving problems in the context of outdated and crumbling models will only dig us deeper into the hole. We are in an era of profound change that urgently requires new ways of thinking instead of more business-as-usual,” the 73-year-old said, adding that “capitalism in its current form, has no place in the world around us.”

Some 1,600 economic and political leaders, including 40 heads of states and governments, will be asked to come up with new ideas as they converge at eastern Switzerland’s chic ski station for the 42nd edition of the five-day World Economic Forum which opens on Jan. 25.

The eurozone’s failure to get a grip on its debt crisis and the specter this is casting over the global economy will dominate discussions.

‘Deficit of leadership’

“The main issue would be the preoccupation with the global economy. There will be relatively less conversation about social responsibility and environment issues -- those tend to come to the fore when the economy is doing well,” John Quelch, dean of the China European International Business School, told AFP.

“The main conversation will be about a deficit of leadership in Europe as a prime problem,” he added.
The annual talk-shop comes barely a week after the eurozone’s reputation took a further battering, as ratings agency Standard and Poor’s downgraded the credit-worthiness of nine eurozone countries, including stripping France of its triple-A grade.

While saved from the downgrade embarrassment, the region’s economic powerhouse Germany has nevertheless been forced to lower its growth forecast, dragged down by its neighbors’ debt woes and weaker demand from emerging markets.

The forum will centre on the issue from the beginning, as German Chancellor Angela Merkel opens with a keynote speech.

European Central Bank chief Mario Draghi, U.S. Treasury Secretary Timothy Geithner and International Monetary Fund chief Christine Lagarde will also give a broader insight into the international economic impact of the eurozone crisis.

A strong delegation of Turkish ministers is also apreparing to attend this year’s World Economic Forum in Switzerland. The delegation, to be headed by Deputy Prime Minister Ali Babacan, will attend at the personal invitation of the WEFhead Schwab.

Turkey’s EU Minister Egemen Bağış, Finance Minister Mehmet Şimşek and Family and Social Policies Minister Fatma Şahin are cheduled to attend tne forum.

The World Bank slashed its global economic growth forecasts to 2.5 percent for 2012 and 3.1 percent in 2013 -- sharply lower than previous estimates of 3.6 percent for both years.

Beyond economic issues, the forum will address a plethora of other subjects. Sessions will range from scientific discoveries expected to shape 2012, to a discussion on the differences perceived when a Beethoven sonata is played on historic and modern instruments, to how virtual games can be harnessed for innovation in the real world.

It will also hear about the profound changes in the Arab world after a series of revolutions swept across the region in 2011. New Tunisian Prime Minister Hamadi Jebali and Egyptian presidential candidate Amr Moussa will both be present at the meeting.