Ski Camp

Does Davos still matter?

DAVOS, Switzerland - On the face of it, Davos doesn't seem to make much sense. For business and political leaders who are increasingly mistrusted by the public, cloistering themselves in a luxurious mountain redoubt for a week seems like a good way to sharpen the perception that they are far removed from the interests and concerns of their constituents. And in a world of ever-proliferating global forums -- TED and Google Zeitgeist for the techies, Clinton Global Initiative for the high-minded policy and business types, the list goes on -- the World Economic Forum (WEF) has a bit of an identity problem. Aside from the invigorating alpine freshness, the good skiing, and the chance to meet Charlize Theron, is there any reason to come here? And does what happens here still matter at all?


First, for all the interconnectivity enabled by social media and information technology, personal meetings still matter, and Davos consistently gathers some of the most powerful and intelligent people in the world in one place. That includes the nearly 40 sitting prime ministers and presidents who are here, figures such as Shimon Peres of Israel, Mario Monti of Italy, David Cameron of Britain, and Angela Merkel of Germany. 

But more importantly, that includes guys you've probably never heard of -- guys like Carl Ganter, who I've befriended here. Carl runs Circle of Blue, an organization that provides data on the world's water crises. He's one of the smartest guys in the world on the question of dwindling water resources, and is particularly attuned to how water shortage exacerbates risks pertaining to food, energy, and health. I have no particular expertise on the topic -- but it's interesting, it's important, and it helps me to think more clearly about an issue that directly affects the global political risk focus of my own work. I wouldn't have bumped into him were it not for the WEF. Davos unearths the interdisciplinary aspects of your profession thanks to serendipitous encounters with other attendees.

Second, a lot gets done here. Not "by" Davos. Davos itself doesn't do anything. But the key word in World Economic Forum is "forum" -- the event provides a platform for powerful people to pursue their distinct interests. There's no fat here. Sure, there are people who are just here for the parties and the scene -- but you won't slot them in for a 30-minute meeting.

It's like 2,000 of the world's top decision-makers having Hillary Clinton's U.N. General Assembly schedule for a week. I'd say six weeks of work actually gets done here in just a few days. That's certainly true for me. It's not the way I'd want to live my life -- I'm thoroughly exhausted by the end of the trip. There are a huge number of business deals getting done here.  This year, I know of two technology agreements involving U.S. firms, one energy deal involving an African firm, and a medical devices agreement.

Once again, Davos isn't a government -- it's a forum.  It enables private and public players to get on the same page. For example, in a public session I hosted, there was a great back and forth between the governor of Brazil's development bank and a major investor in the country; it led to a private discussion after, cards were exchanged, and I strongly expect interactions like this ultimately lead to an improved business climate down the road.  Davos may not make policy, but it's at least a nice little uptick for global productivity.

But even if Davos is a place where lots of powerful and intelligent people can meet each other and exchange ideas, does that matter for the rest of the world? Does Davos live up to the WEF's claim to be "committed to improving the state of the world"? 

Again, I think the answer is yes. But we need to rethink how we understand Davos.

First, it's a good thing that Davos isn't global. And let's be frank, with 67 percent of attendees hailing from Europe or North America, this is not a Benetton ad of global interests. Emerging markets may drive two-thirds of global growth, but they drive about a tenth of the WEF agenda. But to be fair, Davos was never global (just like the World Bank was never global), we just pretended it was because it made us feel good -- and, well, the rest of the world had to follow what the West wanted, anyway.

But the result of a more insular WEF, while imperfect, is at least substantial: It avoids the dysfunction of the G-20, where nothing gets done, besides the adoption of vague "coalitions of the willing" strategy documents. Folks at the WEF actually share a common worldview -- a devision to transparency, free trade, global governance, liberal democracy, and the rule of law. This lets them align their interests and boost productivity, even if it isn't global. This is becoming more important, precisely because there are growing alternative models out there.

Take the fact that China, which will soon be the world's largest economy, subscribes to state capitalism rather than the free-market variety, and its authoritarian government clamps down on many of the values that are extolled at Davos. (While Russia does the same, the leadership at least recognizes the utility of engaging with these ideas as it seeks to attract more foreign investment.) Sure, some important Chinese executives were in attendance -- but none of the political players of real importance showed.

The absence of China means, on the one hand, that Davos can't presume to be global. On the other hand, it means a Western agenda can actually be set without the conflicting viewpoints that a country like China would bring to the table. That may stoke tension, but at least it makes the positions and agendas clear. 

Lastly, while the theme of this year's gathering -- "Resilient Dynamism" -- has been criticized for sounding like a scrap of corporate jargon, the idea that it represents is an important one that business and political leaders everywhere should learn from. I interpret the term as follows: In a world of uncertainty and volatility, the ability to navigate these shoals and troughs -- and even grow because of them -- is paramount. As Klaus Schwab, the founder of the World Economic Forum, explains: "Either attribute -- resilience or dynamism -- alone is insufficient, as leadership in 2013 will require both."  

The other key theme at Davos this year is the vulnerability of political elites. Leaders marred by corruption, special interests, or a lack of transparency will be held accountable by their constituents. The same goes for elites that are witnessing a growing disparity of wealth, a weak economic outlook, or biting austerity. Want an example? Take a look at the record-low approval ratings of the U.S. Congress.

Many of today's most pressing challenges, such as stubbornly high unemployment or the onset of climate change, are largely out of leaders' hands. Incumbents are getting shunted out everywhere. Business leaders probably don't feel as vulnerable in this Davos as they did after the financial crisis, but perhaps they should feel more so: The combination of improving information technology and growing inequality is going to lead to much more scrutiny and attention on them. That doesn't mean class warfare, but when any of these leaders are seen to do something amiss, the reaction will be sharp and relentless.

Ensuring that leaders get this message is part of the value of Davos -- though it's an area where it still has a ways to go. As 2,600 of the world's high and mighty meet on a mountain, the forum's themes represent issues they need to stop sweeping under the rug. Part of the problem today is the investment world's fetishizing of growth at the expense of focusing on the widening gap between rich and poor. These corporate attendees, through the lofty cost of attending Davos, are essentially footing the bill for thought leaders to bring vital global issues to their attention. 

These economic, political, and media elites -- who are very much in the public eye, and increasingly perceived as not upholding the public interest -- are the very people who must pay closest attention to the increasing vulnerability of elites. Davos is their opportunity to acknowledge this trend, brace themselves, and then overcome it. After all, if they ignore the deeper issues in play, they may not have a ticket to Davos come next year.



The Egyptian Revolution Through Mubarak's Eyes

Insider accounts are shedding new light on the 18 days that brought down a pharaoh.

CAIRO - It was Jan. 19, 2011, and Hosni Mubarak's regime was strong and confident. The Egyptian president was playing host to an array of Arab presidents at his beachside resort in Sharm el-Sheikh. Hundreds of construction workers had been evacuated from the area, lest they mar the spectacle.

But those listening carefully could make out the first rumblings of discontent. The Tunisian foreign minister had to scramble back to Tunis hours before the summit's opening, as his country dealt with the fallout of a revolution that had already toppled its long-serving dictator. And Egyptian Facebook pages were spreading news of demonstrations on Jan. 25, which would seek to replicate the drama of the Tunisian revolution on the streets of Cairo.

As the summit drew to a close, Mubarak headed to the airport to see the foreign dignitaries off. Trailing closely behind him were Egyptian Foreign Minister Ahmed Aboul Gheit and Omar Suleiman, Mubarak's feared domestic enforcer. Aboul Gheit asked Suleiman if he had raised the potential protests with the president; the intelligence chief replied that he had left Mubarak alone during the summit, but that it was high time to discuss the issue.

When the last dignitary had left, Suleiman approached the president and told him that he had a very important topic to discuss. It was then that Mubarak learned of the uprising that would sweep him from power in a few short weeks.

At the time, however, Mubarak was nonplussed. "The president didn't show much interest," Aboul Gheit wrote in his recently published memoir, My Testimony. When Suleiman suggested a meeting with top officials to coordinate responses to potential protests, Mubarak "didn't respond, and didn't react in a way that we understood as suggesting he was worried."

Two years after the Jan. 25 protests, the small clique of officials around Mubarak is finally starting to go public about the debates within the Egyptian government as the revolution unfolded around them. In addition to Aboul Gheit's account, top Egyptian officials gave their account of the unrest in journalist Bradley Hope's Last Day of the Pharaoh. Both tales provide a glimpse into the tensions at the very top of the Mubarak regime and the reason it failed to crush the protest movement.

Mubarak, in all these former officials' stories, is portrayed as a largely passive figure -- a leader who was at the mercy of the last person to offer his advice. "The president is very old, and consequently he is dependent on the vision of Gamal Mubarak," Aboul Gheit wrote, referring to Mubarak's younger son, who had been conspicuously active in the presidential palace since the beginning of the uprising. Gamal, he added, "stays with [the president] all the time in the palace or in the house."

Such explanations could be an effort by high-ranking officials to deflect blame away from the Egyptian state and on to their bureaucratic rivals. But the accounts are remarkably consistent: Hossam Badrawi, then the top official of the ruling political party, told Hope he had convinced Mubarak to relinquish power on Feb. 9 -- but the president then reversed his decision after being confronted by Gamal and other members of his inner circle. He would relent two days later.

President Barack Obama's administration reached out to Aboul Gheit on several occasions to express its views on how the Mubarak regime should handle the crisis. The Egyptian foreign minister believed the U.S. government was attempting a good cop-bad cop approach: "The White House appears very strict against the government, while [Secretary of State Hillary] Clinton and the State Department show some flexibility," he told Suleiman.

The intelligence chief replied, "It is the traditional distribution of roles."

As the revolution gained momentum, Aboul Gheit describes a regime paralyzed by infighting. On Jan. 31, he attended the swearing-in of the new prime minister, Ahmed Shafiq, a career military man brought in to restore order. Mubarak, he says, was bored and quiet: "He pretended to be very busy reading some papers."

Other players, however, were already maneuvering to protect their interests. Mohamed Hussein Tantawi, then defense minister and the future head of the military junta that would replace Mubarak, informed Aboul Gheit at the ceremony that the military would not sacrifice its reputation to preserve Mubarak's rule. "Some told me that people are talking about using the army to control the situation by force," Tantawi said sternly, according to Aboul Gheit. "And I said from my side the army doesn't strike people at all, or else it will lose its legitimacy."

Gamal, meanwhile, was intent on protecting Mubarak's hold on power, whatever the cost. Gamal was widely believed to have designs on the presidency himself -- though the aging dictator denied that he would orchestrate Gamal's inheritance of power. "Do you think I'm crazy?" Aboul Gheit wrote that Mubarak told him. "To put my son ... my son ... in this jail? Impossible."

While Gamal indisputably played a powerful behind-the-scenes role, Mubarak resisted efforts to place him in the public eye. Aboul Gheit wrote that he suggested to the president in 2010 that Gamal run for a seat in parliament. At the time, the opposition Muslim Brotherhood held nearly 20 percent of parliament, though their presence would be decimated in the 2010 election, which was widely viewed as rigged.

"This is nonsense," Mubarak responded sharply. "They will cut him into pieces. Don't you know what is happening in parliament?"

On Feb. 1, with the police forces helpless to control the swelling protests, Mubarak delivered a late-night speech announcing that he would not run for another term in office. "[The speech] was late ... it was late ... and then I fell asleep," Aboul Gheit writes, mirroring the frustrations of many protesters. The foreign minister was awakened afterwards by a phone call from Gamal, who said that the speech had sparked a "new spirit" and popular sympathy for Mubarak.

Gamal, however, had overestimated the sea change. On Feb. 2, Aboul Gheit was ensconced in his office in the Foreign Ministry when he looked out the window to see a crowd, interspersed with horses and camels, moving toward Tahrir Square. His phone rang: "They are going to burn the country." shouted a relative. "The unity of Egypt will be gone!"

It was the beginning of the Battle of the Camel - a failed attempt by regime loyalists to clear the square by any means necessary. The cavalry charge with horses and camels, as well as attacks with stones and Molotov cocktails, left 11 Egyptians dead and more than 600 injured.

But the attack also marked the beginning of the end for the Mubarak regime. Aboul Gheit frantically called Suleiman to discuss the bloodshed in Tahrir: The two officials agreed that the president now had no choice but to step down. Suleiman, however, said that he could not say this publicly -- he would be accused of forcing Mubarak out in order to ascend to the presidency himself.

From this point, the fractures within Egyptian regime widened quickly. Aboul Gheit recounted a conversation with Suleiman, in which the intelligence chief said "there was a real plan" to make Gamal as president, but that "the national security apparatus will not agree on this" and that he would not work for Gamal. "They want to get rid of me, and they exerted a lot of effort in this respect," Suleiman added. Aboul Gheit added that he believed Suleiman was referring to Mubarak's wife, Suzanne.

This conversation may also contain a hint for understanding why Suleiman was shunted aside by the military establishment after Mubarak's fall. The intelligence chief suggested that there was a disagreement between him and Tantawi over Gamal, saying that in the event Mubarak's son became president, "it is only Tantawi who will work with him." In any event, Suleiman's bombastic statements blaming foreigners for the uprising and claiming that Egypt was not ready for democracy had made him extremely unpopular among the protesters - and a liability to any transitional government.

By Feb. 9, Mubarak's position was clearly untenable. At this point, Badrawi -- after receiving Suleiman's blessing -- was granted a one-on-one meeting with Mubarak. "Mr. President, I see in front of me an image of [Nicolae] Ceaucescu," Badrawi said, referring to the Romanian dictator, a former friend of Mubarak's, who had been executed by firing squad during the country's anti-Communist revolution.

"You mean they are going to kill me?" Mubarak asked.

"Probably, yes." Badrawi responded.

"I am ready to die for my country," the president said.

According to Badrawi, Mubarak soon opted for a better course: He agreed to delegate power to Suleiman and pave the way for early presidential elections. This path out of the crisis, however, was quickly undermined by Gamal and other loyalists in the president's inner circle.

Even as the regime crumbled, Gamal embarked on a last-ditch attempt to preserve his father's rule. On Feb. 10, Mubarak announced that he would give another speech, in which he was widely expected to announce his resignation.

"It was late ... it was late," Aboul Gheit wrote. "And then the statement came, but it did not have anything good in it. And I understood then that the son of the president was trying to shape the statement so that it pleased everyone."

Egyptian protesters, shocked that Mubarak was attempting to cling to power, took to the streets in huge numbers on Feb. 11, dubbed the "Friday of Departure." Aboul Gheit said that he spent the morning working the phones between Suleiman and Shafiq, trying to negotiate Mubarak's exit. Suleiman told him that the president would retreat to his home at Sharm el-Sheikh -- where he had first learned of the protest movement -- that day, before noon prayers.

In an attempt to salvage the situation, Suleiman summoned Aboul Gheit to a meeting at Cairo's Ittahadeya Palace at 1 pm. The palace, however, was besieged by protesters -- the army warned that it could be stormed at any moment, and the officials had to relocate to a nearby military base. "And finally I came to the logical conclusion: The world has changed," wrote Aboul Gheit.

A three-way conversation between Mubarak, Suleiman, and Tantawi laid bare the disagreements between the formerly tightly knit officials at the top of the Egyptian government. Suleiman first received a call from Mubarak, who had by then relocated to Sharm el-Sheikh, in which the president ordered him to tell Tantawi that he had been granted the power to oversee the administration of the country. When informed of the order, however, the defense minister balked: "I understood from the phone call that Tantawi doesn't want to put the army in office," Aboul Gheit wrote.

Suleiman then told Mubarak that he needed to appeal directly to Tantawi. In the end, he and Shafiq headed in person to the Defense Ministry to inform the military chief of his new role. His job done, Suleiman delivered the announcement that charted the first, tentative steps of Egypt's post-Mubarak future.

"In the name of God the merciful, the compassionate, citizens, during these very difficult circumstances Egypt is going through, President Hosni Mubarak has decided to step down," the once all-powerful intelligence chief declared. "May God help everybody."

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