Friday, (Day 3): over the peak and heading for end-station Sunday...there is a seriousness here, a focused concern that is strangely settling...despite the usual chaos of Davos’s unfounded hopes, dissassociations of responsibility, technological idealism and the occasional relapses into post-Friedmanite market mania...there is an inner reality that most folks here seem to share, that the exercise of globalisation has indeed gone wrong, that Business as Usual will deliver more of the same toxic results, and that tinkering with the system will not do the job.
The facts now go undisputed, a huge step forward in itself from previous eras of outright denial. No one in the room disputed the shocking data point that by 2020, 85% of the world’s population will live in water stressed area unless something changes As Nestle Chair, Peter Braebeck, made clear in his speech in Saudi Arabia and has reiterated every time he has had the chance here at Davos, “we will run out of water long before we run out of oil”. Businesses as much as labour organisations have embraced with horror the fact that in the last year, according to the ILO report timed to coincided with WEF, 50 million souls have been registered as having been made unemployed, excluding in the main China and the many millions who have slipped, or who have been booted, out of the labour market unnoticed by the statisticians...and with the US alone exorcising a cool 0.5 million a month, the numbers are unquestionably going to rip off the roof...
Simon Zadek is Chief Executive of AccountAbility
As in 2004, 2005, 2006 and 2007he is blogging from the World Economic Forum at Davos on openDemocrac and on Accountabilityin 2009.
Also by Simon Zadek in openDemocracy:
"From the magic mountain: the World Economic Forum "
(29 January 2004)
" openDavos: Simon Zadek's blog "
(February 2005)
"Reinventing accountability for the 21st century "
(12 September 2005)
" China's route to business responsibility " (30 November 2005)
"Accountability: the other climate change" (31 October 2006)
"The World Economic Forum: changing the world from within" (22 January 2007)
"After the binge" (6 January 2009)
With such diverse players and interests around the table, there is common cause created and demonstrated here in merely accepting these and many similar numbers.
Lobbying and tactics and debate and argument come in discussing culpability and solutions... On the former, there are some curious perspectives at play, ”you cannot really blame alone the US for over-consumption, a massive consumer credit boom and living beyond its means”, explained one person patiently to me, “after all, we were just mopping up the inapprorpriate trade surpluses of Germany, Japan and China”...actually, such views would not matter if they didn’t, but they do because they inform the next act...in one discussion of the timing of the end of the recession (ranged from a few folks saying last quarter 2009, most folks saying late in 2010 and a few would-be suicide cases voting for 2012 and beyond), I argued, “it is not so much when it ends, but how we emerge from this mess, politicians will be desperately tempted to unlock the cage and let consumer credit roam the streets once again, so swamping any attempt to deliver a green fiscal stimulus”...nonsense, I was told, consumer demand in itself is not part of the problem, “it is the best form of democracy that we have”.
But that said...pretence is at a remarkably low ebb, certainly less than ever before...the main game, the parallel world of private sessions full of CEOs and ministers with a liberal scattering of NGOs, the tough questions are, one way or another, on the table...what does it take to cut a decent climate change deal, how to fix the financial system, ways of addressing the water crisis, means of preventing food speculation...this is the conversation in play, and it must be said outside of the glare and reward of public relations...as one CEO insisted in a tricky discussion about scope of accountability for water management in supply chains, “lets not posture, we have to get stuff done, now, in securing water for communities, or else none of us have much of a future”.
And the Davos crowd is in fact the team, if they were a team, like it or not, with the power to make decisions on our collective behalf, thrown up by hard work, heritage, luck and perhaps occasional misdemeanour into positions of power. They do have the power to make a difference, in fact they have a rare opportunity in this moment of crisis to rewrite the rule book...to actually change the course of history. And to top it all off, the Davos crowd is hugely intelligent, on the whole rather nice, and in the main, deeply moral.
..But here is a strange thing, because many of the sessions dealing with the right topic, an appropriate sense of urgency, and with these folks in the room, seem to exude uncertainty complete with an eerie feeling that someone notable is missing...its a little hard to explain, but everyone seems to be talking to someone who isn’t there...sometimes this is quite concrete and specific...leaders of some of the world’s most powerful companies worrying that it is local authorities (absent of course) that hold the key to solving the world’s water problems...or with some of the world’s political leaders in the room discussing climate change, they look towards business in seeking permission or guidance in how best to move forward...and as for the NGOs, well, I have already made this point in earlier blogs... but mostly it is not so concrete, but a real, undisclosed collapse of confidence that the club has the right members, the right mandate or arrangements, to sort out the mess.
The problem of course, are the institutional bonds that hold extraordinary people in place...the most amazing business leader, in flight through a insight, is struck dumb through a need to reiterate, “of course we will only do this if makes money”, just as the charismatic and insightful politician lowers his or her sights with the words “...but the people I represent are not concerned with this”...it is as if some great bluff, a grand, well-intentioned hoax is required to save the planet and us all in it... climate change is predicted, if unabated, to wipe us all out, but to rise collectively into action, we have to posit or even guarantee a low carbon prosperity that allows for driving (electric), flying (biofuel), and meat eating (electric sheep ?)... now of course economic development counts, just as private property rights and the role of private capital needs to be protected and indeed nurtured... but it beggars belief that no one stands back and at least asks, ‘are we really making the right assumptions about how to organise our political economy and the role of its principal actors.
It is as if some Anglo-Saxon view of corporate governance and fiduciary responsibilities was a mandate from some greater being... I am a member of WEF’s Global Agenda Council on corporate governance, along with some fine folk such as the great investor activist, Bob Monks and the executive director of the International Corporate Governance Network, Anne Simpson. At our first jamboree in Dubai earlier this year (along with no fewer than 70 other Councils covering every conceivable topic), we debated trends in corporate governance. A true-blue argument flared up over the topic of public ownership. On the one side was, yes you guessed it, me, arguing that a revival of public ownership provided an opportunity to revolutionalise the manner in which the public interest could be exerted through ownership, a step wise change from the relatively limited and highly constrained ‘responsible investment’ movement. The dozen or so real experts around the table were, frankly, horrified, and argued strenuously that the world had to take steps to ensure that these public owners behaved like, yup, you guessed it again, ‘private, commercially-focused owners’... only in this manner, so the argument ran, could a real level playing field in ownership be sustained given the regulatory power of governments and their diverse and politicised interests.
We are blighted by the way things are, in our minds as much if not more than how they are on the ground... public-private partnerships have earned themselves, in many respects, a bad name. And often for good reason, as private capital fails to deliver the goods, lines of traditional public accountability are lost, and profit variously appears to be gained on the back of poor public services, or is lost by the bucketful where the politics are just too hot to handle... but these partnerships, in their immense diversity and mixed records, is the closest we have got to in experimenting in true institutional cross-dressing... yes, companies are at the table of the Global Fund for HIV, AIDS and Maleria with a profit mandate, just as labour represents its constituencies in the Ethical Trading Initiative or the MFA Forum. But ‘doing partnerships’ can have an unexpected, almost neurological impact on organisations and the folks who work in them... NGO leaders experience the profit motive, just as businesses don the garb of social mission-focused activities...
I suspect that we will not wake up any time soon and find that the traditional roles of our key institutional actors have changed, fundamentally... but it might just turn out that this is exactly what is needed to overcome the irony of those in power being constrained by their basis of accountability to make the changes that we now in some sense all know are needed. Now I am sure that I will not be celebrated or rewarded here or in heaven by encouraging such institutional cross-dressing as the hard road that we need to pass along. But it is worth at least a thought, whether we have indeed reached a Kuhnian cross-roads in the organisation of our affairs... And as we turn as a generation to the matter of governance, whether for global trade, to manage climate, to secure water, to stabilise food supplies or just to bake bread and biscuits, it is worth I believe considering some more radical options based on a hard nosed view of what is not going to work, and an insightful take on the potential offered by today’s experiements.
This blog posting is a re-post from: