“As globalization goes on deploying its impact, innovative policies that help contain the mounting backlash against it are urgently needed,” warned Klaus Schwab, Founder and President of the World Economic Forum, and Claude Smadja, then Forum’s Managing Director, in an editorial published in the International Herald Tribune that attracted worldwide attention. “Public opinion in the industrial democracies will no longer be satisfied with articles of faith about the virtues and future benefits of the global economy. It is pressing for action.”1
This prophetic essay predated the Asian financial crisis that played out in 1997-1998 and the “Battle in Seattle” anti-globalization protests that disrupted the World Trade Organization Ministerial Conference at the end of 1999. It presaged too the robust discussions today – in the aftermath of the global financial and economic crisis that erupted in 2008 – about the nature of capitalism and the consequences of free markets.
Macha Levinson, at that time a director at the Forum, remembered the events:
“The members of the Russian delegation, and particularly the business leaders, became deeply concerned about the popularity of [Gennady] Zyuganov and the likelihood of a victory of the Communist party. Many were infuriated that Zyuganov was saying one thing in Russia and another thing in Davos, appearing in the guise of a modern moderate rather than a hard-line Communist. They decided to take action and to throw their financial weight behind Yeltsin’s campaign. The unwritten collective pledge became known as the Davos Pact.”
In July 1996, Boris Yeltsin was re-elected by a wide margin.
At Davos, Klaus Schwab convened a reconciliation session for all the political leaders of Northern Ireland, who had never before all been in the same room. Just starting the meeting was a challenge. The participants refused to sit at the same table. Schwab had two more tables brought in, arranging all three in a triangle. After the tables had been moved around several times, the delegates agreed to sit down.
Once again, Shimon Peres, now Prime Minister of Israel, and Yasser Arafat, now President (Rais) of the Palestinian Authority, shared the stage in a session in which both appealed for the business community to be more involved in the Middle East peace process.
The Forum convened a meeting in Davos between business leaders and government and law enforcement officials to call for tighter international sanctions on bribery. This eventually led to the Forum’s Partnering Against Corruption Initiative (PACI), which was launched in 2004.
The World Economic Forum moved on to the information superhighway with the launch of its internet website at www.weforum.org.
- Klaus Schwab, Founder and President, and Claude Smadja, Managing Director, World Economic Forum, “Start Taking the Backlash Against Globalization Seriously”, International Herald Tribune, 1 February 1996