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Al-Ahram Weekly 27 Jan. - 2 Feb. 2000 Issue No. 466 
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Published in Cairo by AL-AHRAM established in 1875 |
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Al-Ahram Weekly 27 Jan. - 2 Feb. 2000 Issue No. 466
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| Published in Cairo by AL-AHRAM established in 1875 |
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Egypt Region International Economy Opinion Culture Features Profile Travel Living Sports People Time Out Chronicles Cartoons Letters Globalisation with a human face
Klaus Schwab, president and founder of the World Economic Forum, talks to Aziza Sami about his visions for the future
The 30th Annual Meeting in Davos is an attempt to redefine the world's economic agenda. How, given the experiences of the past decade, do you see the process of globalisation continuing in the new century?
The 21st century will be very much driven by technological developments that cannot be stopped but which we have to harness in order to ensure that the benefits of the digital and the genetic revolutions are felt by everyone on the globe. If you look at all the scientists and engineers who have ever been active on earth, half of them are still alive. And it is they who will drive the world forward at an ever-increasing speed.
What is your prescription for averting a recurrence of the global financial crises that have afflicted several regions?
Today's financial markets are of such a magnitude, and the capital shifted daily around the world without sufficient control mechanisms is so enormous that the global financial system can be placed in jeopardy at any time. We have not moved fast enough to transform the lessons already felt into global and national policy instruments capable of avoiding such crises in the future.
What role do you see for the Bretton Woods institutions within the emerging financial and monetary frameworks?
The Bretton Woods institutions have certainly made mistakes of appreciation in the past but this is not sufficient reason to condemn them or even to call them into question. Both institutions were created after World War II, and nearly 50 years later there is still a highly suppressed need to undertake the necessary reforms to cope with the world of today. The World Bank, under the leadership of Jim Wolfensohn, has made significant progress in re-engineering itself and the IMF will follow. In a globalising world, national governments should do everything to strengthen global institutions and not weaken them.
In a globalising world, the US has emerged as the dominant power, alongside other potential contenders such as the EU, China, Russia and Japan. What is Davos' agenda for mitigating the tensions arising from this new paradigm, and how can an international dialogue be initiated to create a climate conducive to economic growth rather than conflict?
The spirit of Davos is precisely aimed at cooperation and partnership. Davos, today, is the foremost arena for integrating developing countries into the global dialogue. We should also realise that the power of the US originates from its superb economic performance from which we can all learn to create a stronger entrepreneurial culture.
Despite western financial institutions extolling the virtues of globalisation and free trade for the past decade, developing countries remain sceptical of its benefits, fearful of its price. How does the Davos summit intend to address the concerns of these countries?
The Annual Meeting in Davos allows developing countries to express themselves and to make sure that the globalisation process is responding to their specific needs. Otherwise globalisation will be unsustainable. We have to combine globalisation, which is so much technology-driven, with a strong set of global rules that ensures the inclusion of everyone in the wealth creation process. In today's world we need more global rules; these cannot, however, be dictated by a super-power or by a group of countries, such as the western countries. The developing countries have to play a strong and constructive role in defining appropriate global governance systems.
Many believe that globalisation is eradicating non-western cultures and values. How can societies in the new global order retain the right to be different?
The challenge will be to combine globalisation with localisation. Human beings need an identity. A global identity is not sufficient because it is either an identity transferred from somebody else or an amalgamation of many different identities. This is not enough to make people feel they have roots and values of their own that distinguish them from others. In short, it is essential to provide them with their own individual identity.
In Seattle globalisation was challenged not by developing countries but by a war waged by western pressure groups. Initiation of a new round of multilateral trade talks was aborted by bitter differences among the advanced industrial nations. What does this say for the prospects of globalisation and free trade?
We see now the backlashes against globalisation. Already, three years ago, we drew attention to these backlashes in Davos. The theme of our Annual Meeting 1999 was "Responsible Globality" and the motto of the World Economic Forum has always been "entrepreneurship in the global public interest". We feel that entrepreneurship generates economic progress, but in the end entrepreneurship has to serve the public good. If Seattle served to raise awareness of the fact that life has to be determined not only by the economic but also by the social dimension, and if Seattle leads business leaders and politicians to integrate the social responsibility more into their decision-making processes, then the shock of Seattle was salutary.
Will the digital revolution, IT and technological advances really level the field between developing and advanced countries, or will they merely compound differences given their control by already existing dominant commercial interests?
Like many innovations the digital revolution could be a danger, a source of a new digital divide in the world. On the other hand, it presents a great opportunity in as far as the digital revolution allows us to share knowledge at very low cost around the world in an unprecedented way.
MENA (Middle East North Africa) summits promoting economic integration between Israel and the Arab states are the brainchild of the World Economic Forum. How do you evaluate past MENA conferences, lukewarmly attended by Arab countries and rejected by their publics who appear convinced that they are an attempt to separate economic integration from attaining a just settlement to the Arab-Israeli conflict?
In evaluating the MENA economic summits one has to distinguish between economic and political objectives. From an economic point of view the conferences have been an overwhelming success and many deals, projects and joint ventures have been concluded as a result of these gatherings. In addition, both foreign and regional business executives worked together with governments of the region in putting forth new and promising plans and policies for liberalisation and economic reform. Just looking at the results of the 1996 summit in Cairo you get a full appreciation of the tangible and concrete outcomes. From a political point of view the objective of regional cooperation has indeed progressed slower than originally intended. It should be noted that these conferences were designed to assist and support the multilateral process. When the multilateral process stalled the political objectives of the summit also suffered. But I should emphasise that they did not suffer at the expense of generating business opportunities for both regional and foreign investors.
How, as co-ordinators of the MENA summit, do you propose to make the upcoming MENA conference more effective than past ones in which political positions impeded the implementation of several projects?
One of the key success factors in convening these conferences is the need to generate as great an exchange of views and dialogue as possible. As such there is a need to structure small, informal, focused discussions on a variety of issues. More specifically we need to foresee thematic discussions, business strategy sessions, sectorial workshops, project presentations and special seminars for small and medium enterprises. And in all these discussions it is essential to attain a balance between representatives from both the private and public sectors. This partnership between business and governments has been a unique feature of the summits; it constitutes an important mechanism in overcoming various short term political and economic obstacles that may arise.
Have all the parties you addressed accepted to attend the MENA conference?
Since this summer I have been actively engaged in ongoing discussions with senior political officials, including several heads of governments from both the region and abroad. At the same time I have been in close contact with business executives from the region as well as many chief executives of our 1,000 member companies. I am pleased to report that there has been growing enthusiasm, particularly in recent weeks, to reconvene a MENA summit. I have no doubt that the next gathering, which will take place sometime in the year 2000, will be exceptionally well attended on both the business and the political level.
What do you think the Middle East will be like at the end of the 21st century?
My vision of the Middle East for the 21st century is very positive. First, I have no doubt that a just and lasting peace will be a fact of life in the very near future. The region's political leadership, as well as the public at large, have manifested a strong desire to leave conflict and tensions behind and to work towards prosperity and harmonious economic, political and social relations among all countries of the region. In the last few years governments have shown willingness to reform their economies and align their markets with the knowledge economy of the 21st century. We are now witnessing the results of these efforts, as most economic and financial indicators are on the rise with Egypt being clearly a benchmark in this respect. As economies continue to liberalise, capital will move freely in and out of the region. At that time we will see remarkable improvements in the quality of life of all the people in the region. I am very optimistic that the potential is very promising and that the Middle East will be an important and indispensable member of the global community of nations.
Do you ever doubt the inevitability of globalisation. Is there a possibility, given the element of unpredictability which history teaches us never to ignore, that some other equally powerful but vastly different gospel might not become the theme of the age, 100 years from today?
When England experienced the industrial revolution workers in Manchester tried to stop industrial development by destroying the steam engines. Any revolution creates a lot of fear since it reduces predictability. It increases risk and introduces disruptions. But history tells us that one cannot stop a revolution. You can only tame it. The whole 20th century was characterised by efforts to socialise the industrial or capitalist revolution. Now we have a new task: we have to humanise the globalisation revolution.
