Why does Davos matter?

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The World Economic Forum will host its annual meeting this year, from May 22 to May 26, after it was postponed in December 2021, during the Omicron wave. It will be attended by over 2,000 political and business leaders, economists, activists and journalists.

What happens there?

Jamie Dimon, who heads JP Morgan, has said that “it is where billionaires tell millionaires what the middle class wants”. WEF jokes about that description on its page. It also counters it by saying that a third of the participants are from civil society, including those who work to ensure basic human rights and to protect the environment. Maybe the truth is somewhere in between. 

Why does Davos matter?

Historic ideas have been birthed, and political and economic deals have been signed here. 

In the beginning, the meeting was largely attended by academics and journalists. At this point, the idea was to introduce European countries to American business management practices. But, in a few years, it expanded its scope. This had to be done because business leaders–after the Bretton Woods fixed-exchange rate system collapsed and after the oil crisis in 1973–realised that they need to be concerned with more than their balance sheets and profit and loss statements. That political and social worlds matter too. That’s how political leaders entered the picture--since 1974. 

The platform has been credited with various national transformations since. Economic reforms in China,for example, are said to have started after the country sent its first delegation to the meeting in 1979, when WEF was still called the European Management Forum. 

In 1986, there was a skirmish between Greek and Turkish soldiers at the border. In it, two soldiers were killed and one was wounded, and relations between the two countries soured. But at Davos, leaders of both nations shook hands, signalling that the platform was to address global concerns. At Davos, two years later, the two countries even signed a declaration, which placed the platform as a place where nations could negotiate a reconciliation. 

Also read: Ten things you didn't know about Davos

In 1990, West Germany’s Federal Chancellor Helmut Kohl and East German PM Hans Modrow met at Davos to discuss German reunification. Two years later, South African President Frederik Willem de Klerk met political rivals Nelson Mandela and Mangosuthu Buthalezi at Davos; it was the first time the three had come together. Another two years later, Israeli Minister of Foreign Affairs Shimon Peres and Chairman of PLO Yasser Arafat had shutterbugs flashing like crazy when they held hands and walked up to the stage. Another two years later, the platform became infamous for the Davos Pact, which was said to be an understanding between Russian billionaires to fund a mass media campaign to keep a friendly president Boris Yeltsin in power, and stop a communist opponent from taking over. Yeltsin’s popularity had been tumbling till then, but he did get reelected that year. Some say the election was rigged too, but that is a different story.

In 2003, WEF decided to host its meeting in the Middle East, at the Dead Sea in Jordan, from where you could see Israel on the other shore. That year, the US proposed its first Middle East Free Trade Area initiative, for “peaceful nations” in the region to form deeper trade relations with the US. The area was to have been set up by 2013. But, while a few trade agreements are in place, the larger goal seems to have dwindled away.

In 2013, when Myanmar leader Aung San Suu Kyi travelled outside her country after 24 years, guess where she went? WEF’s meeting in Thailand. It was meant as a message to the world that there was greater freedom in the country, and that economic reform was very much on the agenda. 

In all, the WEF as a platform isn't to be sniffed at.