As I See It
Learning pragmatism at Davos
A day before the start of the Annual Meeting of the World Economic Forum (WEF) at Davos, the world's economic equilibrium was shaken by stocks falling across the board from Hong Kong to New York. It required an unprecedented cut in lending rates by the US Federal Reserve (the Fed) to shore up the world's badly shaken markets. Whether the recovery can be sustained is still to be seen.
The world's elite in commerce, finance and manufacturing were somber but did not show apprehension of an imminent recession. Economic apocalypse did rear its ugly head frequently during discussions in panel after panel, all the economic geniuses who were proved thoroughly wrong neither showed any remorse nor, for that matter, act sheepish.
While die-hard optimists predict only a "slow down," how deep and how long the recession will be will depend upon the measures being taken to cushion its impact. Where capitalist philosophy once shunned the public sector, public money in the form of "sovereign wealth" is now not only readily acceptable but actively sought to offset the huge losses sustained by financial institutions as well as multinationals.
Former US treasury secretary and now Chairman Citigroup, Rubin, who hates flying, had to journey personally to Kuwait to plead for funds to bail out Citibank. Asian economies were expected to weather the financial crunch far better than their US and European counterparts, is it more optimism than real fact, given the economic inter-dependencies?
A galaxy of world leaders came to Davos this year. US Secretary of State Ms. Condoleezza Rice joined British PM Gordon Brown, Singapore PM Lee Hsien Loong, Pakistani President Pervez Musharraf and a host of others including former British PM Tony Blair, former US Secretary of State Henry Kissinger, Queen Rania of Jordan, Chief Advisor Fakhruddin Ahmad of Bangladesh, Hamid Karzai of Afghanistan, UN Secretary General Ban Ki Moon etc. More than 75 of the world's leading corporations easily eclipsed the 25 heads of states and governments present.
Among the business and industry leaders, James Dixon, Chairman and CEO of JP Morgan Chase and Co, Indra Nooyi, President and CEO PepsiCo, David J. O'Reilly, Chairman and CEO Chevron and Wang Jianzhou, Chairman and CE China Mobile. George Soros was there and so was Rupert Murdoch, both came to my breakfast for Pervez Musharraf. The president had a very responsive plenary with Henry Kissinger with a full house in attendance, Kissinger's sharp intellect belied his advanced years.
The Session on "Dividing the World Again," moderated by Dominique Rossi, stood out as really interesting. Ambassador Wu Jianmin, President China Foreign Affairs University, maintained that the agenda revealed the western psyche of following a policy of "divide and rule" to dominate the world. Asian values believe in uniting the world by strengthening commonalities and working out compromise on contentious issues.
Professor Moon Chung-In of South Korea agreed that creating division had been a western policy for centuries; now the initiative should be towards settling issues. John Chipman, DG and CE of International Institute for Strategic Studies (IISS), UK, said that Russia and China had accumulated enormous economic power in the recent past but were powerless presently to influence even the region in their immediate vicinity, let alone the world.
He contended that India, another rising economic power, was diffident in its role beyond the non-aligned approach that it had stayed with for over half a century.
Professor Samantha Power of John F. Kennedy School of Government, Harvard, US, and an active Barack Obama supporter, said that change in US policy was inevitable whoever came to power, as a result of the reaction of the US public as they took in the damage to the US image over the past 7 years because of the ineptitude and misadventures of the Bush administration in Iraq, Afghanistan and stagnant initiative on the Palestinian issue.
Ambassador Wu Jianmin in his overview of the 30 years since the launch of China's opening to the world said that China had been sharing its growth. China lost over $ 100 billion because it refused to devalue its currency when Asia was in financial turmoil a decade ago, which would have destroyed the regional economies.
China needed peace and stability in the world in order to modernise, reminding us that it was easy to start a war but difficult to stop it. In contrast to western countries penchant for political and economic expediency, China preferred to remain strong on principles.
Western countries looked at crisis as "danger," whereas in Chinese "crisis" translated into "danger" and "opportunity." Dr. Samantha Power described Barack Obama's struggle for change that matters, particularly in following principled foreign policy. In a broad sense, the Hamiltonian-Jefferson debate of two centuries ago in the first flush of US independence still remained alive, even though the agenda had broadened.
While the media (and eminent NGO heads like Gareth Evans of International Crisis Group, Kenneth Roth of Human Rights Watch, etc) remained generally hostile to President Pervez Musharraf, there were noticeable "converts" from hard to soft criticism.
Those who had invested in Pakistan, and a whole lot who were interested in investing, lined up around the block requesting for bi-lateral meetings. Because of genuine worry about the internal situation in Pakistan, particularly the political problems being aggravated by suicide bombers, Musharraf sometimes came out looking defensive, the circumstances availing being so adverse.
It is difficult to push the country's agenda when you are perceived to be a part of the problem. The severe lack of calibre around him shows and further aggravates his situation.
The Pakistan Embassy to the UN in Geneva made a great job in scheduling the president's visit and logistics thereof, but their ineptitude in ensuring that Pakistanis of substance got on the many WEF panels was pathetic.
Only Hussain Haqqani and Ahmed Rashid from non-WEF members made it to 200 or so panels, and that two on their own merit. This "please the boss only and damn the rest" syndrome is a typical babu-approach inherited from British India-times.
The panel on "Insider's view of Pakistan" had Richard Haas, former PM Shaukat Aziz, Hussain Dawood, Ahmad Rashid and myself, and was moderated by BBC's Owen Bennett-Jones. Perception dominates debates, even among the knowledgeable.
On balance, the panel was bullish on the country. The "Pakistan Breakfast" on January 25 was attended by 325 of the world's elite in government, business, academics, media, NGOs, etc. Even though the president faced tough questions, he acquitted himself well. The audience was reluctantly willing to still give him the benefit of doubt.
The February 18 elections is a no-win situation for Pervez Musharraf, even the winners will yell "rigging" after falling well short of their rhetoric of unrealistic expectations. February 18 will be used as a launch pad for a long hot summer of discontent, i.e. if he safely negotiates the Ides of March.
Pervez Musharraf must do comprehensive re-evaluation of his own position, making compromises to bring harmony between rhetoric, perception and reality. He is too smart not to know that the dice is loaded against him, and he should not try to brazen it out but to come to terms with reality.
His lonely task is to decide (before others do it for him) how to keep his destiny and that of Pakistan in sync. A "window of opportunity" to effect genuine national compromise may exist only for the next fortnight, and that makes a government of national compromise unavoidable. If anyone can learn anything from Davos, it is pragmatism.
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