Thursday, 12 February 2009

A dose of realism at Davos 2009

Joost Martens, CI's Director General, reflects on his recent attendance at the World Economic Forum in Davos:

'As a first-time participant at the World Economic Forum in Davos, one is initially overwhelmed by the complexity of this gathering with its more than 2,500 participants, most of them from the corporate sector (though bankers were conspicuous in their absence) and governmental bodies, as well as a growing number of participants from civil society, INGOs and academia.

There were five days of meetings - ranging from plenary sessions, specific topic sessions, lunch meetings to private meetings, dinner sessions and even nightcaps, as well as networking, bilateral meetings and informal events. It definitely took some time to see the wood from the trees.

What came out of the meeting in general terms was a great sense of urgency. Urgency about reversing the economic downturn and the collapse of of the financial services system; urgency on commitments towards the Copenhagen Conference on Climate Change at the end of 2009; and urgency on job creation to stem the tide of growing social unrest and upheaval.

And there was a sense of realism on the part of many participants (though some of the corporate participants preferred pessimism) about the way forward. Many agreed that if growth has to be achieved coming out of the recession, it has to be green growth and that the opportunities for sustainable growth should lead the way.

This needs to be achieved with full transparency about what is happening, good public communication, and a focus on inclusive, multi-stakeholder efforts.

For all this to happen, there is need for leadership (there was mention of “servant” leadership), to make sure that it is not just shareholders’ interests that are defining the actions, but those of all stakeholders, including consumers.

There is also the need for more, or let’s say better, regulatory capacity. This is needed at the level of individual industry, as well as a global economic regulatory body, which should be more than a brushed-up IMF with some band-aids.

There was recognition of the crisis of trust and the erosion of confidence towards the business sector and towards governance in general. A great deal is expected from the G20 (this is a good sign for inclusiveness: nobody talks about the G8 anymore!), which will meet in London on 2 April, principally to look at the financial system. After that date, one would expect a restructuring of the international institutions, like the IMF and World Bank, and regulation across the board of financial institutions.

I was invited to play a specific role in some topic sessions:

Shaping the message about climate change
In representing CI, I stressed the importance for consumers of where the message comes from, not just what is said. Our work on climate change and the discussions about the decline of consumer trust show this to be vital.

Mending the holes in the food safety net
The discussion went from using new technologies for improving the regulatory capacities to changing the whole food system. Consideration was given to whether safety standards are a way of putting up barriers to imports from Africa or Latin America. It was argued that good practices, traceability of contamination, consistency and good management of the entire system are all needed.

Regulating complex industries
With the failure of regulation in the financial sector fresh in our minds, the focus of the discussion was on standards, the regulation of the potential harm being done to consumers and the environment, and on the proportionality of the sanctions. There should be regular overview, by consumers groups and regulators, of rules and enforcement. And in an ideal world, can transparency and ethics, competition and professionalism, be an alternative to regulation?

Davos this year was said to be very different from previous years. Judging by the level of realism that was present, that may be a good sign for the years to come.'

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