The Davos Agenda

The richest 1% would soon own more than all the assets of the 99% of the entire world population put together. Concentrated mostly in North America and Europe, a select group of individuals, almost 77% of the 1%, have actual control.  While the emerging economies are producing rich and powerful on an accelerated basis, the global economy is not being shared equally by all sections of society.

Posted on 01/31/15
By Ikram Sehgal | Via ViewsWeek
(Photo by  by Jolanda Flubacher via World Economic Forum)
(Photo by by Jolanda Flubacher via World Economic Forum)

The official World Economic Forum (WEF) handout confirmed that over 2000 leaders, including heads of 1000 of the world’s largest and most successful businesses, heads of state or government, the heads of the world’s foremost international organizations alongside leaders from civil society, labor unions, the world’s major religions, civil society, media and the arts participated in the WEF Annual Meeting 2015 at Davos from 21 to 24 January. “The New Global Context” theme of the Meeting covered a period of profound political, economic, social and technological change having the potential to end the era of economic integration and international partnerships that began 25 years ago in 1989.

 

OXFAM’s recent study showed that the richest 1% would soon own more than all the assets of the 99% of the entire world population put together. Concentrated mostly in North America and Europe, a select group of individuals, almost 77% of the 1%, have actual control.  While the emerging economies are producing rich and powerful on an accelerated basis, the global economy is not being shared equally by all sections of society. Davos participants were under pressure to work towards a more equitable sharing of wealth.

 

The US has 37 million adults comprising the top 1% having an average wealth of US$2.7 million. To give tax benefits for the middle class for child care, college education and retirement, and seeking to exploit a tide of populism in the US, President Obama in his Annual State of the Union message to the US Congress proposed targeting Wall Street and the wealthy, seeking to raise the tax rate of capital gains and closing a loophole in the inheritance tax to raise an extra US$300 billion taken from 0.19% of the richest 1%. With a Republican controlled US Congress supporting the banking industry which stands to be hit by the new taxes, the reaction was swift, critics say that Obama’s tax proposals would slow economic growth. The rich still have enough influence to put a roadblock to the aspirations of the hapless 99%.  In Pakistan’s case less than 0.1% of the population can influence any proposal to give relief to the lop-sided majority of 99.9%.

 

Harvard Professor and former US Secretary Lawrence Summers says that the success of industrial democracies requires sustained increases in wages and living standards for working families. Leaving aside the moral imperative of helping the world’s poor and making substantial changes meant to benefit the middle class, prosperity must be inclusive and equitable but being problematic is far from being assured. Summers requires the Davos elite to recognize its importance and commit themselves to equitably sharing wealth as the focus this year. As the runaway recent success of populist leftist parties like Syriza in Greece has shown (and according to my friend Frank Neuman Spain will follow), there is huge reaction among the poor and the middle class to the inequitable distribution of wealth and the falling standards of socio-economic infra-structures even in Europe.

 

WEF’s “Partnership Against Corruption Initiative” (PACI) Vanguard CEO’s Meeting on 21 Jan was my personal high point. Giving strategic direction to WEF’s anti-corruption efforts, the meeting of this community of champions serves to promote business driven global and anti-corruption agenda, sharing best practices to improve their organizational resilience and joining forces to strengthen moves towards a more level playing field against corruption. To quote David Seaton, Chairman and Chief Executive of Fluor Corporation (and the Chairman of PACI Vanguard), “it is time for leaders from businesses, government and civil society to support game-changing initiatives to fight corruption and end bribery. We should align around a global agenda and a true multi-stakeholder partnership, creating a level playing field and supporting growth, competitiveness and trust in leadership.”

 

More than 100 participant global leader companies and organizations such as Basel Institute, Transparency International, etc are in Vanguard. “Chatham House Rules” should not prevent mentioning the salutary role played by Secretary General OECD Angel Gurria. OECD’s Anti-Bribery Convention represents the harmonized legal, regulatory and enforcement frameworks as the single most important initiative to help businesses operate on a level playing field against corruption. PACI intends working with governments at the national and social levels to reduce incidents of corruption in the life cycle of strategic infra-structure projects.

 

Hosting presidents and prime ministers of Pakistan as well as major political leaders like Imran Khan at our Pakistan-specific event for 12 years, we requested some renowned non-Pakistanis to join the panel to discuss Pakistan and the Region.  Prime Minister Mian Nawaz Sharif had earlier declined our invitation to participate in our traditional PAKISTAN BREAKFAST on Sat, 24 Jan, 2015. Minister Fatemi politely explaining that 6.30 – 8.30 am event was not possible since the Prime Minister had to leave Davos at 9.30 am. Sharif has a “Davos Jinx”, he cancelled his trip for the second year running.

 

We were honored and privileged by Ross Perot Jr, Chairman “The Perot Companies” and Chairman EastWest Institute (EWI), joining Francis Matthew, Editor at Large, Gulf News, and Pakistan’s Ambassador to the UN Zamir Akram on a distinguished panel. Compered by my son, Zarrar Sehgal, WEF Young Global Leader (YGL) in his own right, the Speakers on the panel were all at their brilliant best. With participants doing the rounds of the Davos party circuit on Friday night finding it almost impossible to make it so early in Saturday morning, even then 75 of the 100 expected turned up. Some WEF Pakistani members had left but for some it is difficult getting over a hangover, the veneer of patriotism notwithstanding. One must acknowledge outstanding Pakistanis like Javed Akhai, Chairman Martin Dow Pharmaceuticals, who not only contributed immensely but volunteered to participate in an expanded future event and industry titans like Husain Dawood, stalwart in his support as usual. One misses the contribution to WEF by Zakir Mahmood, formerly President Habib Bank Limited and Atif Bokhari, President NIB (then President UBL).

 

The feedback from the participants about the Session was that they were able to understand our viewpoint far better given that non-Pakistanis were giving an objective and credible viewpoint. Troubled by a number of issues and with the new Modi govt in India hell-bent on a Pakistan-fixated hegemonistic agenda, Pakistan is facing political, military, economic and social difficulties exacerbated by the shortcomings of our political leaders and bad governance thereof.

 

As Joseph Stiglitz paraphrasing President Bill Clinton’s remark about the economy that won him the US Presidential election in 1992 put it recently, “it’s the politics, stupid!” Davos gives us an opportunity to present our correct narrative to a world audience.

 

 The writer is a leading defense and political analyst of Pakistan. He can be contacted at ikram.sehgal@wpplsms.com

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