Thursday, January 29, 2009

Showdown at Davos

Where to start?

The World Economic Forum summit of global leaders held this week at Davos, Switzerland, has been the economic equivalent of the shootout at the OK Corral.

(Putin speaks out at Davos' opening; Source: RT; Time: 31:20)
  • 28 January: Vladimir Putin began the gunslinging by delivering a keynote speech indirectly accusing the U.S. and China of steering the world into economic gridlock, and also took a backhanded swipe at the ineffectiveness of the international community containing international crises, and even directly contributing to them: “Frankly speaking, we all know that provoking military and political instability, regional and other conflicts is a helpful means of distracting the public from growing social and economic problems. Such attempts cannot be ruled out, unfortunately.” Carefully parsed, it ignored Russia’s own complicity in many global crises and instead proposed Russia as the solution the world is waiting for. Aside from the inherent propagandistic nature of a national leader speaking before assembled dignatories, his half-hour long speech was filled with many sound fundamental arguments: a depreciation or write-off of bad debts, a return to fundamental economic bases, and a recognition of global economic interdependence: “We should not despair. This crisis can and must be fought, also by pooling our intellectual, moral and material resources.” After his prepared speech, he also turned down a question of assistance from U.S. technology leader Michael Dell. Thus, much of his rhetoric could be described as a sort of political “slap and tickle.” Stingingly rebuking, yet enticing of the possibilities.

  • 29 January: In comparison, Putin’s keynote was placid and friendly compared to the heated exchange between Turkish PM Recep Tayyip Erdogan and Israeli President Shimon Perez: Talking about Gaza, Erdogan excoriated a defensive and vocal Perez, accusing the Israeli leader by saying, “You kill people,” and walked off stage. Perez had spent 25 minutes defending Israel’s position, while Erdogan had only gotten 12 minutes in response. He left with an ominous rebuke of the moderators and organizers, “I will not come to Davos again.” Though afterwards, he took time to note that he has maintained a position that anti-Semetism is a crime against humanity, he was supported in his abandonment of the discussion by Arab League Secretary Amr Moussa, who said of the Israeli leadership, “They don’t listen.” Erdogan’s wife went further, saying “All Peres said was a lie. It was unacceptable.”

  • 29 January 2009: Chinese Premier Wen Jiabao then verbally opened fire on the U.S. for leading the world down the primrose path into global recession. Not expressly naming his target, he spoke of “excessive expansion of institutions in blind pursuit of profit.” Besides the arresting headline quotes, the full text of his speech is revealing. Of course, China remained blameless in the international march of folly, even as it continues to use eminent domain to seize small farms and village houses to pave the way for giant state-run businesses, industrial plants and hydropower projects, often with little or no compensation. This was referred to obliquely by speaking of China’s plan to “push ahead comprehensive industrial restructuring and upgrading.” He neatly bypassed the issue of China fueling the financing crisis by being the primary beneficiary from buying up U.S. investments and securities, profiting greatly, and then dumping them, such as their withdrawal from Fannie Mae and Freddie Mac in 2008. The road to recovery included a stimulus package for China focused on helping for the rural and poor, investing in infrastructure and specifically mentioning earthquake protection. How much of this was said to reassure the global financial community, and how much was left to address the increasingly unhappy domestic audience of China remains an exercise for the audience. The other statement which could be taken as a staggering exaggeration of fact was this: “Steady and fast growth of China's economy is in itself an important contribution to global financial stability and world economic growth.” For it has been the rapid growth of China’s economy which has in many ways fueled food, resource, ecological and energy crises, and caused instability around the world. To alter the old axiom, “What is good for GM is good for America,” Wen Jiabao tried to argue in effect, “What is good for China is good for the world.” Maybe not so much. Lastly, his speech may have been more to paint a desired vision than an actual condition when he said, “There is harmony and stability in our society.” Again, maybe not so much.
This is not to utterly refute many of the good points each of the world leaders made in their various speeches, interviews and forums. There is a need to find harmony in the world. There is a need to create a more fundamentally sound economic equilibrium based in interdependence. Yet it seemed to many that something was lacking. Not least of which was the present U.S. President or a key representative of his new administration.

It behooves each world leader to admit their own nation’s contribution to the problem. Each can say many domestically-pleasing, often-too-safe and sage-sounding points, plinking their neighbors and rivals with rhetorical spitwads, and leave aside much of the trash in their own backyards. The harder work is in mapping a way past such parochialism.

It is all-too-easy to blame the West. Indeed, the U.S. is definitely culpable for much of the mess occurring in the world today. The EU as well. However, each nationstate on the planet is in its own way a contributor to and participant in the present crisis. In other ways, each is a necessary partner for the solutions.

What none of the global leaders seemed to be able to do was to offer a mea culpa, and accept responsibility for their part in the creation of the problem. The Chinese Premier described China specifically as a “responsible nation,” yet he meant that as a way to praise his regime’s leadership, not as an acceptance of its role in causing the present harm.

Of all the leaders, and even for all of his self-congratulatory praise of Russia, Vladimir Putin must be credited for being focused most on the future and the collective dialogue, rather than the insular defense of the status quo, celebration of past successes, or place in the present status.

The real question is which of the various world leaders in office today will step up to the role of key moderators of the global crisis. To gain the trust of others, they must be willing and capable of self-criticism, engendering in their peers the careful balance of spirit in admittance of fault, acceptance of error, while not lowering sights from an end-state goal.

Emergent powerhouse Brazil surely was not interested in such a role, with President Lula instead attending an “anti-capitalist jamboree.” The United States was pretty much sitting on the sidelines too, citing the transition of the new administration. The highest-level administration representative sent to the conference was Senior White House aide Valerie Jarrett.

The most upbeat of speakers featured in the headlines this week from Davos was former U.S. President Bill Clinton, who said:
“This financial crisis proves, as nothing else should or could, the fundamental fact that global interdependence is more important than anything else in the world today… We cannot escape each other. Divorce is not an option.

“This is not a time for denial or delay. Do something. Give people confidence by showing confidence… Don't give up. Don't bet against yourself. Don't bet against your country. This is still a good time to be alive.”

We can hope that, in due time, other presently-serving international leaders will echo similar sentiments, backed with cooperative international policies and plans providing a roadmap to the achievement of a new sustainable system of global economics.

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