Schwab’s Davos Wish Is Big Obama Turnout at Crisis Conference
By John Fraher and Matthew Benjamin
Dec. 23 (Bloomberg) -- With Christmas approaching, Klaus Schwab has his heart set on a gift for the World Economic Forum he stages every year in the Alpine ski resort of Davos: a big turnout of officials from Barack Obama’s new administration.
“If I had a wish, it’s that we see an essential and crucial American presence,” Schwab, executive chairman of the WEF, said in an interview. “If you look at what we want to achieve, we can’t do it without a strong U.S. participation.”
Davos presents something of a quandary for the 47-year-old U.S. president-elect, who takes office just eight days before the conference.
On the one hand, it will bring together more than 1,200 policy makers and executives from around the world, providing a high-visibility forum at a time of global economic crisis; Schwab says the meeting will be the most important in the WEF’s 39-year history. On the other hand, the idea of Obama officials jetting off to a Swiss event renowned for parties and such celebrity attendees as Angelina Jolie may play badly at home.
“Going to a conference that is not absolutely essential, and which can convey the impression that Obama is more interested in the glamour of the office rather than the burdens, could backfire politically,” said Julian Zelizer, professor of history and public affairs at Princeton University in New Jersey. Obama and Vice President-elect Joseph Biden “need to spend more time right here in Washington.”
Schwab, 70, said he doesn’t expect Obama himself to show up. Among likely representatives of his administration’s economic team, only adviser Laura Tyson definitely plans to attend. Tyson, a professor at the University of California, Berkeley, took part in the 2008 conference.
Opportunity for Geithner
Federal Reserve Bank of New York President Timothy Geithner, Obama’s nominee for Treasury secretary, also came last year. A person familiar with Geithner’s thinking said that while he sees value in the opportunity to lay out the new administration’s policies, he hasn’t decided whether to go.
Other Davos veterans among the new administration’s top ranks include Biden, 66, who the WEF says attended in 2005, and Lawrence Summers, named to direct Obama’s National Economic Council. Summers made news before the 2007 conference by warning that the credit boom could soon turn to bust.
For now, the Obama team is saying little about the forum as it works on an expanded stimulus package to create or save 3 million jobs over two years amid the worst economy since World War II.
“No decisions have been made regarding participation in the World Economic Forum,” said Stephanie Cutter, spokeswoman for the Obama transition team. “There’s a lot of work to do early in this administration to deal with the economic crisis and pass an economic recovery package.”
Putin, Wen, Merkel
Tyson and any other Obama envoys would join more than 40 heads of state and government including Russian Prime Minister Vladimir Putin, who will deliver the opening address. Chinese Premier Wen Jiabao and German Chancellor Angela Merkel are also scheduled to attend the forum, running from Jan. 28 to Feb. 1.
With the likes of European Central Bank President Jean- Claude Trichet, JPMorgan Chase & Co. Chief Executive officer Jamie Dimon and Deutsche Bank AG’s Josef Ackermann also attending, Morgan Stanley’s Stephen Roach says Obama shouldn’t be afraid to send a large delegation.
“The parties will be few and far between,” said Roach, chairman of Morgan Stanley Asia Ltd. “We’re at an unbelievably critical juncture in the global economy and global policy debate. This will not be a normal year at Davos.”
The annual retreat often throws a light on global trends in finance and politics as executives including News Corp. Chairman Rupert Murdoch rub shoulders with the likes of New York University Professor Nouriel Roubini.
Trains Halted
In 2004, Swiss police halted trains to Davos to fend off protesters as Vice President Dick Cheney traveled to the conference to defend the U.S. invasion of Iraq.
Three years later, bankers and executives ignored warnings from Trichet and Summers, 54, that risk was being underpriced. Seven months later, a seizure in credit markets sparked the worst financial crisis since the 1930s. In 2008, transparency emerged as a key theme as news broke in the middle of the meeting that Societe Generale SA had become the victim of a rogue trader.
Back to Roots
A strong presence from the Obama administration would also help Schwab as he tries to shift the Davos meeting back to its roots as a forum for discussing the future of capitalism and overcome the perception that it’s a networking club for bankers and movie stars.
“It’s a sign of the times that next year’s meeting will be a much more sober and concentrated one,” said Schwab. “This is the most important meeting in the 39-year history of the forum because it happens at such a crucial moment. The theme is shaping the post-crisis world.”
Asked whether a strong presence from the Obama administration was his “Christmas wish,” Schwab replied: “Well, let’s just say it’s a political wish.”
To contact the reporters on this story: Matthew Benjamin in Washington at mbenjamin2@bloomberg.netJohn Fraher in London at jfraher@bloomberg.net
Last Updated: December 22, 2008 18:01 EST |
