Rich, Powerful Flock to New York for Economic Meet
Sun Jan 27,12:23 PM ET
By Stella Dawson
NEW YORK (Reuters) - A 16-acre graveyard of mangled steel and concrete in lower Manhattan is why the world's business and political elite are gathering this week in New York for their annual talks on the state of global capitalism.
The deadly destruction of the World Trade towers is the somber backdrop for this year's World Economic Forum, which leaves the snows of Davos, Switzerland, for the first time in its 31 years for a conference starting on Thursday that has as its theme -- Leadership in Fragile Times.
One thousand chief executives from some of the world's largest companies -- Boeing, Siemens, Pacific Century CyberWorks and more -- will mingle with Group of Seven finance ministers, Nobel laureates, German Chancellor Gerhard Schroeder and religious leaders such as the grand mufti of Bosnia.
Security threats to civic society and how to build cultural understanding are high on the agenda for high-powered leaders meeting in the gilded halls of the Waldorf Astoria hotel.
Outside, anti-globalization activists plan to protest corporate hegemony, saying these very same leaders are the real cause of global instability and violence.
Much has changed since last year's session, when the inkling of a U.S. slowdown was the only shadow. Now recession grips the world, stock markets have plunged and the spectacular collapse of energy trading giant Enron Corp. amid charges of accounting fraud has marked the end of a decade of U.S. prosperity.
The deadly Sept. 11 attacks on the Pentagon and the World Trade towers have made al Qaeda and the war on terrorism household words. It was a gesture of solidarity to gritty, wounded New York City, where more than 3,000 people were killed last September, that brought the forum here, said Klaus Schwab, the organization's founder and president.
He called it "the right decision for the right venue at the right time." It also sidestepped concerns over adequate Swiss security if anti-globalization protests turned violent.
SWAPPING BUSINESS CARDS
As usual, the agenda is grandiose. There are sessions on security and civil liberties, the global economic downturn and high unemployment, tackling the gap between rich and poor and the backlash against modernity and corporate responsibility.
What really goes on, though, is powerful people rubbing shoulders.
"It's just a convention for rich and important people to stroke each other," said John Gutfreund, former head of Salomon Bros., who has spoken at a previous forum and now is partner at a boutique New York investment bank, Unterberg and Towbin.
Schmoozing and keeping eagle eyes open for intimate tete-a-tetes or brusque snubbings among corporate titans is de rigeur. They even strike deals. Last year, for instance global hedge fund star George Soros agreed to a $300 million backing of a bid led by the U.S. media executive and founder of CNN Ted Turner for a Russian TV network.
Building these corporate contacts are one of the most concrete outcomes of the glitzy event. But Richard Medley, a former U.S. Treasury official and hedge fund manager who now runs a New York economic advisory firm, also said debating grand themes can change how leaders think and run the world.
Most important this year, he said, is addressing the huge gap in perceptions between Americans, who view their political and economic intentions on the world stage as noble, and the much of the rest of the world, which sees U.S. unilateralism as sinister.
He cited as an example the shock in many countries over how the United States shipped prisoners from Afghanistan hooded and shackled to Guantanamo Bay, while most Americans were unmoved.
How much deep thought will be achieved in New York, however, is another question. The city, famously proud that it never sleeps, will offer world-class distractions -- opera, exquisite restaurants, champagne and whiskey bars.
"Nothing succeeds better than a moment of time when you isolate a group of people -- be it on sinking ship or long airplane ride. That sense of intimacy and communication may bring out something good," said Gutfreund.
"That's why Switzerland was a better venue than New York. New York has too many gin mills and shows around."
"When you are in Davos there is very little to do except hold meetings. But in New York -- well, I have invitations for 8,000 things that are going on the sidelines," Medley said.
Self-promotion is alluringly easy in this media capital. CNBC has a full-page advertisement in the Wall Street Journal saying that its television coverage would provide front-row seats to "the most influential meeting of 2002."
An army of bankers and investors anxious to plump their slumping profits may prove readier than usual to finance the next hot deal. "What happens informally is more important happens formally," said one top Wall Street banker.
With attendance seen as a badge of global importance, corporations pay $15,000 for membership and donate tens of thousands more in sponsorships. About 40 percent of attendees are from the chattering class -- pundits, publicists, media.
No outcome or mission statement results -- just talk.
"They come to do brainstorming, to learn, to produce ideas ... in a kind of gigantic melting pot," Schwab said.
Part of the mix will be anti-globalization protests. The coalition Another World Possible is rallying 80 groups to demonstrate. At Davos last year, police used water cannons to disperse roughly 1,000 people rushing barricades.
City police have been training in ways to break up human barriers and prevent attacks on motorcades after recent rallies turned violent. For the city's new mayor, financial information mogul Michael Bloomberg, it will test his mettle playing host for this event for his one-time corporate allies and rivals.
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