Department of Development and International RelationsSchool of Culture and Global Studies(CGS)

Study on the Influence of the World Economic Forum

Master Thesis

Supervisors: Kun Zhai, Peer Møller ChristensenSubmitted by: Xiaoxi LouSubmitted on: 20th May 2014

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Table of Contents

Abstract 2

1. Abbreviations 4

2. Introduction 5

3. Methodology 8

3.1 Motivation and Main Focus 8

3.2 Research Method and Research Approach 9

3.3 Empirical Data 10

3.4 Choice of the Theories 11

3.5 Strtucture 13

3.6 Limitations 13

3.7 Project Design 14

4. Theories 15

4.1 Stakeholder Theory 15

4.2 Globalization and Antiglobalization 20

5. Historical Background 23

5.1 Forum's Early Years: 1970s 23

5.2 Forum Going Global: 1980s 25

5.3 Forum Going Public: 1990s 27

5.4 Forum in the New Century 29

6. Analysis 30

6.1 From the Perspective of Stakeholder Theory 30

6.1.1 The 2005 Annual Meeting of the World Economic Forum..............306.1.2 Annual Meeting of the New Champions 2013...................................39

6.2 From the Perspective of Globalization and Anti-globalization 45

7. Conclusion 53

8. List of References 57

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Abstract

Established in 1971, the World Economic Forum has been founded for 43 years under

the conception and efforts of its founder and leader Klaus Schwab, who was a

Professor in Business Management at the University of Geneva then. At the startup,

the Forum was a non-profit umbrella organization known as European Management

Forum which affiliated to a business school called Centre des Etudes Industrielles in

Geneva. In order to compete with the American counterparts, the Forum gave lectures

to European business leaders to obtain management skills and provided them a venue

to discuss business issues. Schwab adopts the stakeholder theory in the management

of the Forum and tries to attract more stakeholders to participate in the meetings.

After 40 years, the Forum has expanded its scale, participants, and events from an

Europe oriented organization into a global governance arena which has a leading role

among international organizations.

The Forum is famous for its informal annual meetings which hold every January in

Davos, Switzerland. Elites from political, economic, business and civil society

organizations all around the world gather in Davos to discuss the serious global issues

and seek for solutions to these concerns. As the enlargement of its size, themes, and

agenda keeps going, the development of the World Economic Forum indicate that it is

a new structure in global governance and no non-governmental organizations can

achieve such a great success and have a long-lasting influence to the world. Besides,

the reports published by the Forum have strong influence as well. As globalization

develops rapidly, many problems caused by neoliberalism have been highlighted. The

Forum engages critics in its agenda and discourse. The Forum accepts those critics

from external world and shows warm welcomes to Civil Society Organizations. About

the discourse, Davos meetings expand the panel discussions in new global concerns

and focus more on research.

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The project is based on the research question: Why does the World Economic Forum

have a long-lasting global influence? Methodologically, the project adopts qualitative

approach. The reference largely comes from secondary material. Theoretically, there

are two theories adopted in the project. First, the stakeholder theory, as the main

catalyst to create global influence. Second, the perspective from the globalization and

anti-globalization. Empirically, the data of the project largely come from the book,

journals, newspapers, and online sources. 2005 Davos Annual Meeting and Annual

Meeting for New Champions 2013 are utilized as case studies in the project, to

elaborate the Forum’s influence and its ongoing concentration on newly emerging

economy -- China.

The long-lasting global influence of the World Economic Forum is the result of the

combination of the Forum’s commitment of the multi-stakeholder approach, the

globalization and anti-globalization. Globalization is the development prerequisite for

the Forum and being discussed by the Forum. Moreover, globalization is an invincible

force in current global development. anti-globalization movement brought critics to

the Forum but it is an inevitable factor which cannot be neglected to analyze the

influence of the Forum. By accepting the critics, the Forum keeps its proactive

direction in the development.

Key words: World Economic Forum; multi-stakeholder; globalization

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1. Abbreviations

CEO Chief Executive Officer

CSO Civil Society Organization

G8 Group of Eight

GATT General Agreement on Tariffs and Trade

IMF International Monetary Fund

MAI Multilateral Agreement on Investment

NATO North Atlantic Treaty Organization

NGO Non-governmental Organization

OPEC Organization of the Petroleum Exporting Countries

UK United Kingdom

UN United Nations

US United States

WEF World Economic Forum

WTO World Trade Organization

WWII World War II

2. IntroductionThe World Economic Forum is “an international institution committed to improving

the state of the world through public-private cooperation in the spirit of global

citizenship.”1 It is a unique organization among international institutions. The annual

1 Main page, accessed May 10, 2014, http://www.weforum.org/

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meeting of the Forum holds at the small town called Davos in Switzerland every

winter is regarded as gathering of global powerful elites. Although the membership of

the Forum consists not of governments but rather of the largest global companies, the

WEF provides an important platform for a variety of political, business, and society

leaders to discuss and scheme solutions to global problems.2

Few global organizations can have a significant influence in shaping global politics

like the World Economic Forum. For example, the United Nations (UN), the World

Bank, the International Monetary Fund (IMF), the North Atlantic Treaty Organization

(NATO), World Trade Organization (WTO), and the Group of Eight are perhaps the

most influential ones. To wield such impact and have a global vision and reputation,

either has had to draw upon the economic, political, military and financial resources

of its member countries. One result of this model has been to make these

organizations and their executive leaders, to greater or lesser degrees, beholden to the

expects of their member countries. This has ensured that the capability of these

organizations to wield influence has been intermittent. The capacity of these

institutions and their leaders to manage autonomously has been continuously

restrained by anachronistic organizational structures that “ensure that they must

struggle to retain their relevance in the face of a changing global landscape.”3

In sharp contrast, the World Economic Forum has a long-lasting influence in both

economic matters and international security, and it was started as a private

organization rather than intergovernmental one. Look at two prominent examples: the

World Economic Forum made a difference in the Uruguay Round of General

Agreement on Tariffs and Trade (GATT) negotiations and the Arab-Israeli peace

process. What makes the World Economic Forum so exceptional is that it has done by

seemingly little more than constructing dialogues among corporate, political,

2 Geoffrey Allen Pigman, “World Economic Forum,” Encyclopedia of Global Studies(2012):1806-1808, accessed February 21, 2014, doi: http://dx.doi.org/10.4135/9781452218557.n570 3 Geoffrey Allen Pigman, The World Economic Forum: A Multi-stakeholder Approach to Global Governance (Abingdon: Routledge,2006), xi.

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academic, and civil society leaders. Moreover, the Forum has been capable to

maintain its relevance by a continuing process of improvements and reforms that has

made it in the frontier of global governance for the past forty three years.4

In 1971, aiming at reclaiming leadership of the international business community

from the Americans, the World Economic Forum has been founded and grown over

four decades into a forefront venue for different actors in the international system to

discuss the prior political, economic and social concerns confronting the world. Its

major goal is to bring all types of major stakeholders together in international society

to discuss global issues and schedule ways of solving problems. It is a multi-

stakeholder approach of global governance and it is different from any approach that

came before it.5

The creation and development of the World Economic Forum has been driven by the

energy and vision of its founder and leader for more than four decades, Klaus

Schwab.6 After conducting a meeting of European business elites under the

investment and support from the European industrial associations and European

Commission in January 1971 in Davos, Switzerland, to “discuss a coherent strategy

for European business to face challenges in the international marketplace,”7 Schwab, a

professor in business management at the University of Geneva, established the

European Management Forum to institutionalize this event as an annual meeting for

European business leaders. However, WEF is also engaged critics; some people

considered the Forum as the place for powerful tycoons to manipulate the

international political economy instead of changing the world into a better order. As

globalization develops, in the near 20 years, although critics from the public were

brought to the Forum, it has gained measurable achievements in the field of

contemporary international society.8

4 Pigman, ibid.:xi-xii.5 Pigman, ibid.: 1.6 Pigman, ibid.: 7.7 Pigman, ibid.8 Pigman, ibid.:3.

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Headquartered in Geneva Switzerland, the Forum’s research reports and projects have

a great influence on both global economy and governmental policy making. Its annual

meeting offers an unparalleled platform to world elites to shape the global agenda at

the beginning of every year. As such, the meeting keeps the foremost venue to

develop global, regional and industrial agendas based on the principle that today’s

challenges can best be tackled through a multi-stakeholder and future-oriented

approach.9 Compared to later annual meetings, the initial meeting in 1971 was modest

in size which had 444 participants from a wide range of western European

companies.10 On 22nd to 25th January 2014, “under the theme The Reshaping of the

World: Consequences for Society, Politics and Business, more than 2,500 business,

government and civil society leaders from over 100 countries took part in the 44th

Annual Meeting in Davos-Klosters, Switzerland”,11 to navigate the

intercommunication and complexity of the changing world.

China develops rapidly in global economic arena. Concerning China’s increasingly

important role and the emergence of Asia, the Forum established “Summer Davos”,

officially called “Annual Meetings of the New Champions” in China. Initiated in

2007, the Annual Meeting of the New Champions has been the foremost global

business gathering in Asia. The Meeting creates a unique opportunity for idea

exchange between top-ranked national leaders and chief executive officers of fast-

growing and dynamic enterprises, including key decision-makers from governments,

academia, civil society organizations and media. The seventh Annual Meeting of the

New Champions has been held from 11th to 13th September 2013 in Dalian, China.

The New Champion communities, including Social Entrepreneurs, Young Global

Leaders, Global Growth Companies, Technology Pioneers, Young Scientists and the

World Economic Forum’s youngest group participated the Meeting with Forum

9 Klaus Schwab, W. Lee Howell et al., “World Economic Forum Annual Meeting 2014,” accessed February 20, 2014, http://www3.weforum.org/docs/AM14/WEF_AM14_Public_Report.pdf10 Pigman, The World Economic Forum: A Multi-stakeholder Approach to Global Governance, 9.11 Schwab and Howell, op.cit.

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Members and Partners during these three days once again. The Meeting brought more

than 1500 participants together from 90 countries to seek solutions and strategies and

discuss global concerns and risks.12

Therefore, here comes to the problem of the research:

Why does the World Economic Forum have a long-lasting global influence?

3. Methodology3.1 Motivation and Main Focus

The author’s motivation to manage this project is based on the enormous influence of

the World Economic Forum. Having been established for 43 years, WEF has

expanded from the European Management Forum which focused on European affairs

to an international-affair-oriented institution. Amongst a number of global institutions

such as the United Nations, World Trade Organization, International Monetary Fund

etc., few institutions have such a global impact to the world after WWII. Moreover,

the World Economic Forum is a non-governmental organization which runs by private

management. To the author, the World Economic Forum is an unexplored and

attractive landscape.

Besides the regular annual meetings, the author focuses on China’s role as well. In the

economic level, six years have been passed after the global financial crisis, the world

economy now locates in the turning point. As the world's largest economy ,the U.S. is

speeding up its recovery. The EU economy, which stuck in the financial crisis, is

getting out of the economic recession and starting to grow. Emerging countries, which

suffered a post-crisis slowdown in the last two years, are expected to improve but

remain many uncertainties. In the political level, decision-makers are pondering to

build a mechanism for better global governance and global cooperation, to deal with

national hostility, regional conflicts, and racial tension as well as unilateralism

imposed by big powers who attempt to destabilize the world. In the social level, social

12 “Annual Meetings of the New Champions”, accessed May 1, 2014, http://www.weforum.org/events/annual-meeting-new-champions-2013

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inequality calls for international reform sees a miserable contrast between

extravagance in developed countries and extreme famine in poor countries, and the

large development gap between the North countries and the South.13 According to the

three levels and China’s contribution to the global economy, China has been become

the world's most dynamic economy which lives up to its vital role in reshaping the

world and China will be the largest economy in the world by 2040. Therefore, it is

impossible to neglect China’s role and China is regarded as an important actor in

international stage under the multi-stakeholder approach of the Forum.

Main focus of the project will be on the internal function of the World Economic

Forum, the multi-stakeholder approach, the attendees’ behavior and speeches on the

meetings, the international economic and political situations, and mutual influence

among them. The project takes a balanced method to the research, by addressing both

positive points and criticisms of the World Economic Forum.

3.2 Research Method and Research Approach

The project will be conducted as the qualitative research. It will be applied as it aims

to present the influence of the World Economic Forum. “Most obviously, qualitative

research tends to be concerned with words rather than numbers. Besides this, one of

its distinguishing features is that qualitative techniques from an epistemological

position described as interpretivist, meaning that the stress is on the understanding of

the social world through an examination of the interpretation of that world by its

participants.”14 Certain types of social research need specific approaches.15 “If a

concept or phenomenon needs to be understood because little research has been done

on it, then it merits a qualitative approach.”16 Qualitative research is “exploratory and

is useful when the researcher does not know the important variables to examine.”17

13 “Xinhua In-depth: China set to be focus of Davos 2014”, accessed May 1, 2014, http://news.xinhuanet.com/english/china/2014-01/21/c_133061601.htm14 Alan Bryman, Social Research Methods (Oxford: Oxford University Press, 2004), 266.15 John W. Creswell, Research Design: Qualitative, Quantitative and Mixed Methods Approaches (London: Sage, 2009), 28.16 Creswell, ibid.: 26.17 Creswell, ibid.

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This type of approach “may be needed because the topic is new, the topic has never

been addressed with a certain sample or group of people, and existing theories do not

apply with the particular sample or group under study.”18

According to the research problem, the “World Economic Forum is one of the most

influential, but least understood, global institutions.”19 and the qualitative approach is

chosen as the research method. In this project, the analysis of the influence of the

World Economic Forum will be constructed on the historical development of itself,

annual meeting and regional meetings, and the international background at that time.

From the author’s perspective, the research on the influence of the World Economic

Forum is closely linked to its historical development and international background.

Remarks from officials of the Forum, attendees from the meetings and articles from

the media are also regarded as convincing source in the research.

3.3 Empirical Data

The literature for reference of the project will focus on secondary material. For the

secondary material, updating news, reports, remarks from WEF officials on the WEF

official website, comments from the media and academic research outcomes from

books, academic journals, newspapers etc. will be collected as qualitative research

data.In the analysis, the author will choose two case studies. One is the 2005 Davos

Annual Meeting held in Davos, Switzerland, the other is the Annual Meeting of the

New Champions 2013 held in Dalian, China.

3.4 Choice of the Theories

Stakeholder Theory

Stakeholder theory is concerned with the problem of trade and value creation.20 As a

matter of fact, the influence of globalization has been increasingly stronger, and as

science technology has contributed to calls for “transparency, openness,and

18 Creswell, ibid.: 28.19 Pigman, The World Economic Forum: A Multi-stakeholder Approach to Global Governance , x.20 R. Edward Freeman et al. Stakeholder Theory: The State of the Art, New York: Cambridge University Press, 2010, 4.

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responsibility,we have seen an increased interest in understanding how capitalism,

ethics, sustainability, and social responsibility can be forged into new ways of

thinking about business.”21 People who engaged in trade and value creation are

responsible to “those groups and individuals who can affect or be affected by their

actions”22 that means, stakeholders.

Stakeholder theory implies that the interests of those groups are joint and to create

value, and people must focus on how value created for every stakeholder, and how

every stakeholder is affected by the actions of others.23

From 1971 to 1973, the first three Davos annual meetings concentrated on how

European companies could catch up with management methods of the firms in US.

One of Schwab’s primary aims was to encourage European firm managers to adopt

the “stakeholder” approach to their managements. “Schwab had developed a

stakeholder theory of management of industrial manufacturing firms in the 1960s and

co-wrote a text, Moderne Unternehmenführung im Maschinenbau.”24 As the

theoretical framework to guide the internal operation of the Forum, the multi-

stakeholder theory tried to solve problems lay between different stakeholders,

different types of groups or entities, “which do not represent themselves and

communicate to other bodies in the same way.”25 The stakeholder theory contrasts

sharply with other classical theories to business management, such as the narrow

profit-and-loss accounting approach or the approach in East Asia which focuses on

market share domination. Stakeholder theory can be utilized to address broaden

macro-societal issues such as “building the good society”26 which has coherence with

the aim of World Economic Forum - “committed to improving the state of the

world”.27

21 Freeman et al, ibid.: 5.22 Freeman et al, ibid.: 9.23 Freeman et al, ibid.24 Pigman, The World Economic Forum: A Multi-stakeholder Approach to Global Governance, 9.25 Pigman, ibid.: 10.26 Freeman et al, op.cit.:10.27 Main page, accessed May 1, 2014, http://www.weforum.org/

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Globalization and Anti-globalization

After World War II, global connections were intensified by the growth of international

trade and science technology, the number of transnational companies and NGOs (non-

governmental organizations) increased.28 As a significant hand in shaping global

politics, the World Economic Forum has “consistently influenced both global security

and economic matters, and it was begun as a private rather than intergovernmental

effort.”29 Globalization is the background of the development of the Forum and it

motivates world leaders to enhance negotiations and cooperation to discuss the issues

within the field of global governance. Therefore, the study of globalization is

considered to be one of the theories to support the research on the World Economic

Forum. However, as globalization develops, the voice of anti-globalization came into

being. Although globalization provides a main stream in the development of the

world, we need to take a critical view in the development of the World Economic

Forum.

Gramscian-inspired interpretation of the concept of “hegemony” closely linked to

transnational historical materialist approaches which provides research methods to

focus on the structural understanding of power on a global level. The perspective from

Gramscianism offers an analytical tool to theorize the overall coherence situated in

the relations between state and non-state actors, few detailed current studies on

transnational elite clubs such as the World Economic Forum have so far been

conducted by this perspective.30

3.5 Structure

The Project is divided into six parts. First, the introduction part, which provides the

research problem. Second, the methodology part. Third, theories part, which gives

theoretical supports to the project. Fourth, the descriptive part give a historical

28 Thomas Hylland Eriksen, Globalization: The Key Concepts (Oxford: Berg Publishers, 2007), 14.29 Pigman, op.cit.: 23.30 Jean-Christophe Graz, “How Powerful are Transnational Elite Clubs? The Social Myth of the World Economic Forum”, New Political Economy, vol.8, no.3(2003):321.

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background of the World Economic Forum. Fifth, the analysis part, which combines

case studies and theories together to elaborate the research. Sixth, the conclusion part,

which provides the answer to the problem.

3.6 Limitations

The limitations of the research may probably appear in data collecting procedure. It is

difficult to examine and guarantee the factuality and accuracy of data from the

supporting material. Besides, it is difficult for the author to go to the headquarter of

the Forum in Geneva, Switzerland to interview the staff of the Forum, therefore, it is a

pity that the research is lacking of direct opinions from the Forum staff.

3.7 Project Design

Introduction

Methodology

Theories

Historical Background

Analysis

Stakeholder Theory Globalization and Anti-globalization

Conclusion

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4. Theories

4.1 Stakeholder Theory

The basic idea to create value for stakeholders is very simple. Business is about how

employees, financiers(bondholders, banks, stockholders etc.), suppliers, customers,

managers and communities interact with eath other and create value. To understand

the function of a business is to learn how these connections work.31

Financiers and owners of the enterprise have a financial stake. The stake exists in the

31 Freeman et al, op.cit.:24.

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forms of bonds, stocks and so on and they expect to get some kind of financial

returns. Of course, the stakes of financiers differ by preference for money, type of the

owner as well as the type of the enterprise.32

Employees have jobs and their livelihood at stake and they have special skills. In

return for labor at work, they expect to get salaries, security, benefits, and meaningful

works. Employees also expect to participate in decision making division of the

enterprise. If the employees are senior executives or managers, they shoulder a large

amount of responsibilities for conducting of the enterprise as a whole. Sometimes, the

employees are financiers as well, because a lot of enterprises have stock ownership

plans, excellent and loyal employees who believe in the bright future of their

enterprises always voluntarily invest. Another thing to take into consideration about

the employees is in terms of work contracts.33

Suppliers and customers exchange informations for services of the company and the

resources of the products. As with employees and financiers, the relationship between

suppliers and customers is enmeshed in ethics. Enterprises make promises to

customers through advertisements and and when services and products do not fulfill

these promises, then the managers have a responsibility to deal with the situations. It

is very important to have suppliers who try their best to make the enterprise better. If

the suppliers have a better, cheaper and faster way to make critical parts and services,

then both enterprise and suppliers can win. On the contrary, some suppliers compete

only on price. However, there is a moral or ethic requirement of transparency and

fairness in the enterprise-supplier relationship.34

The local community provides the enterprise the right to build factories and other

facilities, in turn, it get benefits from the tax and social and economic contributions of

the enterprise. Enterprises have a direct influence on local communities, and “being

32 Freeman et al, ibid.33 Freeman et al.,ibid.:24-25.34 Freeman et al.,ibid.:25.

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located in a welcoming community helps a company create value for its other

stakeholders.”35 In return, the provision of local community, “companies are expected

to be good citizens, as is any individual person. It should not expose the community to

unreasonable hazards in the form of pollution, toxic waste and so on.”36

Every business consists of owners, financiers, suppliers, employees, customers and

local community. Of course, other types of stakeholders should be considered as well.

First, we can define the word “stakeholder” is about value creation for “those groups

without whose support, the business would cease to be viable”.37 We can see the inner

circle of Figure 1 depicts this definition. Almost every firm is concerned with

relationships between financiers, suppliers, employees, customers and communities.

Therefore, these groups might be called “primary stakeholders”. However, as a firm

starts up, it should be noted that sometimes one special stakeholder might be more

important than another. In the start-up of a new firm, sometimes there are no

suppliers, the firm pays much attention to one to two important customers, and the

venture capitalists as well. This can be regarded as a right approach.38

There is also a broader definition on the concept “stakeholder” that “if a group or

individual can affect a business, then the executives must take that group into

consideration in thinking about how to create value. Or, a stakeholder is any group or

individual that can affect or be affected by the realization of an organization’s

purpose.”39 There are some groups influence primary stakeholders, they can be called

as “secondary stakeholders” and we can see them in the outer circle of Figure 1.

35 Freeman et al, ibid.36 Freeman et al, ibid.37 Freeman et al, ibid.:26.38 Freeman et al, ibid.39 Freeman et al, ibid.:26.

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Figure 1: Creating value for stakeholders40

Executives play an important role in the business. On one hand, they have stakes as

every other employee implied employment contract and their stakes are related to the

stakes of financiers, suppliers, other employees, customers and communities.

Moreover, executives are in charge of the organization and function of the overall

company. They must keep those different stakes moving towards the same direction

and keep them in harmony.41

40 Freeman et al.,ibid.:24.41 Freeman et al, ibid.:7.

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No single stakeholder can stand alone in the whole procedure of value creation. “The

stakes of each stakeholder group are multifaceted, and inherently connected to each

other.” “We need to see stakeholder interests as joint, as inherently tied together.” The

main responsibility of executives is to create as much value as they can for

stakeholders. When stakeholder interests meet conflict, the executives must rethink

the problems and find ways to let the interests go together. As usually happens in the

real life, in case the trade-offs have to be made, the executives should figure out how

to make them and improve them for all stakeholders. All in all, the stakeholder theory

applied in business management is about “creating as much value as possible for

stakeholders, without resorting to trade-offs.”

Application to the Project

In January 1971, with Rand Corporation military strategist Herman Kahn and Harvard

University economist John Kenneth Galbraith as key speakers, the first European

Management Forum was held in Davos, Switzerland.42 “Modest in size to start

compared to the annual meetings of recent years, the meeting was attended by 444

participants from a wide range of West European firms.”43 The first three annual

meetings focused on how European companies could catch up with the US business

management methods. One of Schwab’s major aims was to encourage European

managers to adopt the stakeholder theory into their management. Schwab developed

the stakeholder theory of industrial manufacturing firms management in 1960s and

co-wrote a text, Moderne Unternehmenführung im Maschinenbau.44 Schwab argued in

the book, in order to achieve maximizing profit of a firm, managers should to

“take account of the interests of all the stakeholders in the firm: not only

shareholders but customers and clients, employees, managerial staff, and the

broader interests of the communities within which the firm is situated,

including neighbors in the immediate proximity of the firm, governments,

42 Pigman, The World Economic Forum: A Multi-stakeholder Approach to Global Governance, 9.43 Pigman, ibid.44 “Modern Business Management in the Machining Industry”

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and fellow users of the environment in which the firm operates.”45

Schwab found that if the business managers of European companies adopted the

stakeholder approach, it could raise competitiveness in their business in response to

the challenges posed by the more efficient US challengers.46

The stakeholder model of business management, Schwab found, can be lent naturally

to global governance in a broader meaning. Aiming at solving problems, whether they

exist in a company, a region, a country, a civil society organization, or were even

global – could be done through the most effective way by taking account of all the

stakeholders’ interests in the relevant problem or issue, and encouraging all the

stakeholders to join in the problem solving process. The challenges of the multi-

stakeholder theory in problem solving and global governance lay in that different

stakeholders from different types of entities or groups, which do not on behalf of

themselves and communicate with other groups in the same way. “A mid-sized

enterprise, an environmental activist group, a trade union, a business association, a

university and a county government, are very different sorts of entities from one

another, but they may all have a mutual stake in a certain issue or situation specific to

their locations or focus. Therefore, they need times to listen to and talk to with each

other if they are capable to address serious issues that can affect them all.47 The

analysis of the project is going to use case studies to explore the preeminence of the

Forum which offers a great platform for global stakeholders to gather together and

discuss about the global concerns.

4.2 Globalization and Anti-globalization

Globalization, its concept is various and difficult to capture. Generally speaking, it

can be defined as “a world-view that is just that- a way of looking at things primarily

from a global, rather than a local, perspective.”48

45 Pigman, The World Economic Forum: A Multi-stakeholder Approach to Global Governance, 9.46 Pigman, ibid.47 Pigman, ibid.48 Ben Dupre, 50 Political Ideas You Really Need to Know, (London: Quercus,2011), 196.

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“In the world of business, giant multinationals have expanded to exploit new

global patterns of production and consumption. Politically, a will to look

beyond narrowly national interests has spawned international organizations,

most notably the United Nations and its many affiliated agencies. And with

globalism has come a sharpened awareness of the world as a unified whole

and of global dangers, from AIDS to climate change.”49

The American philosopher Francis Fukuyama argued that human beings currently

locate in the “worldwide triumph of liberalism” and “a true global culture has

emerged, centering around technologically driven economic growth and the

capitalist social relations necessary to produce and sustain it”.50 Roland

Robertson, a theorist of contemporary globalization argued that “globalization as

a concept refers both to the compression of the world and the intensification of

consciousness about the world as a whole.”51 That is to say, globalization brought

people “closer to each other for better and for worse,”52 People’s mutual

interconnections between people give a sense of both opportunities and

vulnerability.53

Populist opposition to international free trade has a long history tracing back to

mercantilist opposition to the appearance and escalation of political fights over trade

and tariffs from the 19th to 20th centuries. However, the term anti-globalization

specifically refers to the oppositions to neoliberalism which can be dated back to

South America in 1980s, where the Washington Consensus of economic reform

program developed.54 However, “only during the late 1990s did the anti-globalization

movement form as a transnational network of organizations staging high-profile

events.”55

49 Dupre, ibid.: 196-197.50 Dupre, ibid.: 198.51 Eriksen, op.cit.: 16.52 Eriksen, ibid.53 Eriksen, ibid.54 Thomas Olaf Corry, “Anti-globalization Movements and Critics”, Encyclopedia of Global Studies, (Thousand Oaks: Sage, 2012),71.55 Corry, ibid.:72.

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Anti-globalization movements are “transnational social movements that challenge

what they perceive as a monolithic global laissez-faire economic regime.”56 From the

1990s, these movements have blamed Western political and economic system of

providing too much power to global dominant elites at the expense of disenfranchised

poor regions, countries and populations.57

“The term anti-globalization is rejected by some supporters who, although

espousing grassroots resistance to global liberalization and greater local

control over resources and decision making, point out that they are

themselves global: They draw attention to global inequity, organize

transnationally, and maintain a critical stance toward significant aspects of

the state system.”58

Some of the social theorists argued that anti-globalization movements has become an

“expression of an emerging global civil society challenging, but also

informing and cooperating with, the largely state-run international system:

civilizing globalization. Like-minded groups and individuals linked through

means, ends, and identity are now operating transnationally and focusing on

global objects of governance such as global health, trade, development,

environment, and even security in a grand dialogue with global governance

institutions and states in an evolving global political architecture.”59

Italian Marxist Antonio Gramsci advanced the concept of anti-globalization as a anti-

hegemonic force in a different approach. It heralds “the emergence of an alliance of

social forces opposed to the elite project of globalization— ‘globalization from

below’ to counteract hegemonic ‘globalization from above.’”60 In this view, anti-

globalization provides an ideological support to forge alliances across national

boundaries and social groups “presenting a globalized version of anti-hegemonic bid

for power known from domestic politics.”61 Mass demonstrations are “seen to perform

56 Corry, ibid.: 70.57 Corry, ibid.58 Corry, ibid.59 Corry, ibid.:72.60 Corry, ibid.:72-73.61 Corry, ibid.

22

a mythology of resistance similar to the idea of the general strike earlier.”62

Application to the Project

In the application to the project, the dual characters of globalization will utilized to

elaborate that the restrictions and critics to the Forum which caused by globalization

provide the World Economic Forum from the international society.

In the year 1971, it was early in the development of the process of political, economic,

and social interpenetration and convergence across territorial borders that has been

tagged by the academia and media as “globalization.” Robert W. Cox characterizes

this period in which the World Economic Forum was established “as a turning point in

the development of capitalism from an international to a global economy.”63 Bretton

Woods system in the post World War II period, wherein governments generally

controlled their domestic economies and manipulated the connection with the rest of

the global economy, was being replaced by a phase in which “governments took on

the often reduced role of adjusting their own economies to change in a global

economy less subservient to national or multilateral regulation.”64

Globalization, not only refers to a process or a phenomenon, but to a communication

that is “social-cultural in character and is composed of information flows, debate,

representations of interests and exercises of power by forces able to do so in behalf of

their interests.”65 The particular discussion of globalization that has arose within both

supporters and opponents since it was recognised and debated by academia and

recently, by the rest of the international civil society. One of the most extraordinary

functions of the World Economic Forum is to serve as an important venue for

discussing on issues predominantly neoliberal, until recently dominant discourse on

globalization.

62 Corry, ibid.63 Robert W. Cox, “Globalization, Multilateralism, and Democracy,” in Robert W. Cox with Timothy J. Sinclair, Approaches to World Order (Cambridge: Cambridge University Press, 1996): 528.64 Pigman, The World Economic Forum: A Multi-stakeholder Approach to Global Governance,7.65 Colin Hay, “Contemporary Capitalism, Globalization, Regionalization and the Persistence of National Variation,” Review of International Studies 26, 4, (2000): 514.

23

The neoliberal, corporate-driven globalization faced challenges from a widening

international civil society, and the Forum made itself a highly visible appearance of

globalization that drove the 1990s. Le Monde Diplomatique, a French journal close to

the anti-globalization movement, described the “World Economic Forum as ‘the

meeting place of the masters of the world [which] has undoubtedly become the centre

of hyperliberalism, the capital of globalisation, and the main home of the ‘pense´e

unique’.”66 From a theoretical perspective, however, these opposing views showed

disagreement on one feature of the international changes caused by globalization: the

significance of new institutions in the global political and economic system beyond

states and markets.67

5. Historical Background5.1 Forum’s Early Years: 1970s

The World Economic Forum was conceived by Klaus Schwab in 1971. At that time,

fixed exchange rates and the international monetary system of gold parities built at the

Bretton Woods in 1944 collapsed and European countries were posting challenges to

the economic dominance by the US in postwar era. A well known Gaullist tract The

American Challenge articulated that the growing European fears that the US

companies were buying up European firms. It was a time when European companies

were challenging the paternalistic model of relationships between businesses and

governments that had prevailed after World War II, especially in Western Europe.

From the beginning, Schwab conceived the Forum as involving cooperation between

European firms and political leaders. Therefore, he wrote to Jean Rey for advice, then

the President of the European Commission, to seek the Commission’s participation,

support and suggestions. Rey recommended two commissioners to serve as advisers

for the Forum: Raymond Barre and Altiero Spinelli. Rey made a promise to the

66 Graz, op.cit.: 322.67 Graz, ibid.

24

European Commission support for the Forum under two requirements: first, the

Forum should be established as a non-profit institution, and the second, the Forum

should hold its meetings within European Community territory. Both requirements

were agreed, as Schwab had scheduled the Forum to operate on a non-profit basis, and

Schwab and Rey expected Switzerland, the potential location of the Forum, to join the

European Community thereafter shortly.68

The first event to affect the Forum’s evolution was a series of global political and

economic events happened in 1973: “the final collapse of the Bretton Woods fixed

exchange rate system and the Arab-Israeli War and resultant OPEC oil boycott of

Western industrial countries.”69 The oil crisis in 1973 became a catalyst for the Forum

to expand concentration from business management issues to economic, political and

social issues: main strategic factors in the international environment that enterprises

needed to concern. At this time the Forum decided to invite political leaders to

participate in the Davos meeting directly in 1974 . The Forum also took the decision

to hold Country Forums as platforms for international business leaders to have a

chance to meet with economic and political leaders from individual countries. The

first Country Forum held in Brussels and Paris in 1973. Fourteen Country Forums

were held by the year 1975. This process was extended to developing countries in

1977 and to the People’s Republic of China in 1979. Later, Country Forums

transformed into the regional summits and agenda of the current period.

Due to the significance of the liberalization of China’s economic opening-up policy,

Schwab invited the Chinese government to send a delegation to attend the Davos

Annual Meeting in 1979. The Chinese representatives’ attendance let the Forum as the

first international Civil Society Organization(CSO) to engage with China. Schwab

visited China and made a speech on the multi-stakeholder approach of business

management in April 1979.70

68 Pigman, The World Economic Forum: A Multi-stakeholder Approach to Global Governance, 8-9.69 Pigman, ibid.:11.70 Pigman, The World Economic Forum: A Multi-stakeholder Approach to Global Governance, 11.

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A further major event occurred in 1979. At this year, the Forum began to publish

research reports. This is a key step towards “Schwab’s objective of transforming the

Forum from being primarily about organizing conferences into a organization that

leverages fully its knowledge-generating capacities.”71 By producing an annual

research called World Competitiveness Report that evaluates the relative

competitiveness on the business status in a small amount of countries for the benefits

of its members, the Forum has expanded the scope of its research outputs to involve

other regions and industries specific competitiveness reports, an annual journal and

concise strategic reviews of hot topics for global elites. The Forum has also organized

many specific research projects under different issues of Forum Initiatives.72

5.2 Forum Going Global: 1980s

In the 1980s, the Forum expanded its activities in several remarkable fields. In order

to keep the status of the annual meeting as a “must attend” activity for high-ranked

business leaders, it would be essential to assure the regular participation of top-level

delegates of other stakeholders in the international economy. In order to achieve this

goal, the Forum staff realized that they had to pay more efforts to persuade senior

economic and political leaders of the potential value of the participation in Davos.

Starting in 1982, the Forum invited governmental officials and leaders of international

organizations such as the GATT, IMF and the World Bank, to gather together with

each other in an informal meeting concurrent with the Davos annual meeting. The

Forum organized a new structure for informal gatherings between political and

economic elites, in which they could know one another, exchange opinions and

cooperate on ongoing problems and issues without having to produce a treaty,

communiqué, agreement or other finished products.

As it became famous, the Informal Gathering of World Economic Leaders, was well

71 Pigman, ibid.:12.72 Pigman, ibid.: 13.

26

received that it had a stable increase in its number, and relative important for political

and economic leaders to attend. Amongst the early achievements of the informal

meetings, the Forum arranged a meeting of trade ministers in Lausanne in 1982 which

led to the conferencing of the GATT Uruguay Round in 1986.73

In 1987, The Forum changed its name from European Management Forum to the

World Economic Forum. With a more global name, the Forum began to adopt a series

of high-level projects to solve intergovernmental political conflicts beyond European

region, by bringing interlocutors together, either at the annual meetings or the

occasions elsewhere. As the Cold War going to an end in the late 1980s, the

development of intergovernmental cooperation around the world accelerated

dramatically.The World Economic Forum was near the center of the openings of

negotiations and dialogues, offering a platform and playing as a facilitator when

needed. At the 1987 Davos annual meeting, then West German Foreign Minister

Hans-Dietrich Genscher advocated the summit participants to “give Gorbachev a

chance,” and encouraged East-West German cooperation in the private and public

sectors. This gained support for ending the Cold War.74

Schwab had adopted a high priority in the newest scientific technologies to promote

communication of the Forum. In the late 1980s Schwab found a good chance to be an

early user of the next generation in communications technology: “a broadband

intranet for members and constituents that would offer secure, private

videoconferencing, discussion groups, Forum documentation and information, and

email facilities.”75 In the year of the fall of the Berlin Wall, 1989, the Forum adopted

the launch of WELCOM, which described as “the first electronic networking system

between the Foundation’s members and constituents.”76 The Forum announced the

project as a “pioneer” and showed that it was the basis for a “strong digital

73 Pigman, ibid.74 Pigman, ibid.:15.75 Pigman, ibid.76 World Economic Forum (2000) About the Forum, History, accessed May 1, 2012, http://www.worldeconomicforum.org,

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information and communications dimension” 77for its following activities.

5.3 Forum Going Public: 1990s

The communications between Forum members prefaced a new series of initiatives

and meetings to address the post Cold War politico-economic international pattern in

the 1990s. This post Cold War decade of the Forum was characterized by intensified

communications, by using a growing number of channels, between a current larger

and more integrated group of stakeholders in the international economy. As former

socialist countries located in economic transitional period of economy and some

developing countries restructured their economic system to meet intensified global

competitive requirements, new enterprises, business associations, international

organizations and civil society institutions emerged. The Forum geared up to assist

firms, governments and CSOs in this transitional period and promoting states

communicate with each other and with existing stakeholders in the world economy.

The Forum held a pan-European conference for leaders of government and state in

1990 to “re-introduce West and East European leaders to one another after the Cold

War.”78 Starting the programme of regional meetings, the Forum arranged an annual

Europe-East Asia economic meeting from 1992, a Southern Africa economic meeting

from 1993, a North Africa-Middle East meeting from 1994, a Mercosur meeting from

1995, and an Eastern and Central European summit from 1996. The Forum created

new networks for different groups of stakeholders, including business leaders, young

politicians, media figures, cultural and arts leaders, and academic and business leaders

in high-technology divisions. In 1998, the Forum established the Business

Consultative Council, a platform at the annual Davos meeting for leaders of business

associations and UN organizations to develop closer permanent relations.79

The enlarging size of the World Economic Forum and its events in the early 1990s

77 Pigman, The World Economic Forum: A Multi-stakeholder Approach to Global Governance,1578 Kirsten Lundberg, “Convener or Player? The World Economic Forum and Davos,” Kennedy School of Government Case programme C15-04-1741.0 (Cambridge MA: Harvard University, 2004): 27.79 Pigman, The World Economic Forum: A Multi-stakeholder Approach to Global Governance, 17.

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raised questions of its internal organization that the Forum by its own admission was

forced to state. In 1976, since becoming a membership organization, the Forum had a

membership of the global leading transnational companies that supported to pay the

Foundation’s operation fees by subscription, and for whom the Forum’s high-level

benefit was intended. By 1993, the number of the core membership hit 1000

companies. Around the major membership there were governments, organizations and

powerful individuals, variously described by the Forum as “communities,”

“constituents,” and “participants”, invited by the Forum itself, the participations of

those groups in the Forum activities that they were either beneficiaries of Forum aims

or contribute to those aims and interests by their capabilities. In the early 1990s,

Forum members had some concerns about the expansion of annual meetings: “some

felt it had become too large; some thought the shift in focus toward global political

and policy issues had gone too far at the expense of issues with a specifically business

focus; some felt the content of the seminars at the Davos meetings was inadequate.”80

In 1993, the Forum took the decision to control participation in its activities and

meetings by ending the opportunities for companies that were not members of the

Forum to attend the annual meeting by paying a fee: “In order to reinforce the club

character of its networks, the Foundation limits its activities to members and to their

special guests only.”81 Meanwhile, the Forum framed and experimented with new

ways for participation, by creating 300 Forum Fellows in 1993. In 1994, the Forum

constructed two new kinds of memberships: one called “Global Growth Companies”

for the fast-growing enterprises, and the other for companies with a more regional

than global concentration.82

5.4 Forum in the New Century

As good governance came to be a core component for economic development in both

economies in transition and developing countries. In 2003 the Forum set up Global

80 Lundberg, op.cit.:24-25.81 World Economic Forum (2000), About the Forum, History, accessed May 4, 2012, http://www.worldeconomicforum.org, 82 Pigman, The World Economic Forum: A Multi-stakeholder Approach to Global Governance, 17.

29

Governance Initiative, to operate as an independent project of global progress under

the deadline for achieving the United Nations’ Millennium Development Goals in

2015.

A wide range of CSOs and other social and political organizations with different

opinions of how the global economy would be and should be petitioned to participate

the Davos annual meeting and became an active part in the discussions. Other people

still threatened to come to Davos to protest the proceedings. The Davos 2000 meeting

was disrupted by protesters, they held demonstrations in front of the Centre des

Congrès, where most of the meetings took place. They intended to capture media’s

and symbolic powerful leaders’ attention, trashed the local McDonald’s in Davos.

“The 11 September 2001 al-Qa’eda attacks combined with the dot.crash and

Kleptogate scandals further to challenge perceptions of the inevitability of

globalization and global economic growth,”83 and the World Economic Forum has a

quick response. The Forum started a new page in January 2002 through moving the

Annual Meeting from the traditional venue to New York City. The Forum announced

that this move intended to show support to the beleaguered city in the aftermath of the

9/11 attacks. The Forum’s decision to change the venue was based in part upon

Schwab’s concerns that “many US participants would be reluctant to make their usual

trip to Davos in light of the post-9/11 security environment and the recession that the

attacks had accentuated.”84

The Annual Meeting of the New Champions held in Dalian, China, in September

2007. This event brought the Global Growth Companies together, the Forum’s new

network of fast-growing firms, along with the Young Global Leaders and the

Technology Pioneers. “More than 1,700 business, government and civil society

83 Pigman, ibid: 18.84 Pigman, ibid.

30

leaders, representing 90 nations, participated.”85 At the meeting, 40% of the 125

Global Growth Companies were Asian firms, and they were welcomed as founding

members of the new network. These new members were able to share opinions with

one another and with delegations of established firms, a valuable mixing of the new

and old economies. The Annual Meeting of the New Champions, China’s Premier

Wen Jibao stated “both the international community’s focus on the fast-growing

companies and regions and its strong desire to establish a new international economic

order.”86 He also said that China has recognized the need “to cooperate with the

international community on the basis of equality and mutual benefit to promote

balanced, universal and win-win progress in economic globalization.”87 In the

following Summer Davos meetings, Chinese top-ranked leaders made remarks every

year and announced that the Annual Meeting of the New Champions brought China

new opportunities in the global economy.

6. Analysis6.1 From the Perspective of Stakeholder Theory

6.1.1 The 2005 Annual Meeting of World Economic Forum

Under the theme “Taking Responsibility for Tough Choices,” the Annual Meeting at

Davos in 2005 gave public an impression of achieving a new goal, not only what the

Forum has been doing all along for more than thirty years, but also to the expansion

of the Forum’s its own claim on global initiatives for its mission.The subjects and

themes of the panel discussions, round table talks and speeches expressed the Forum’s

own idiom, “take responsibility for the development of global values, norms and

ethics”.88 In order to assert this mandate right from the beginning, on the first day, the

Forum arranged the first ever “Global Town Hall” meeting, a three-hour conference in

which around “700 of the summit’s 2,250 participants from ninety-six countries

debated and were polled electronically on which values should underpin global

85 “The World Economic Forum – A Partner in Shaping History”, accessed May 1, 2014, http://www3.weforum.org/docs/WEF_First40Years_Book_2010.pdf, p.228.86 Ibid.87 Ibid.88 Pigman, The World Economic Forum: A Multi-stakeholder Approach to Global Governance, 64.

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governance and which issues should be the most important global priorities going

forward”.89 As before, the Forum made extensive usage of the most updated

technology to facilitate the meeting, to collect information about the participants who

are demographically categorized (see Figure 2), to evaluate what were their main

interests in global issues, and to get their collective viewpoints into the discussions in

real time.90

Global Town Hall meeting participants were arranged into technology facilitated

discussions around tables of ten.91

“Information about the content and conclusions of each table’s deliberations

was tabulated, processed, synthesized and displayed electronically for the

entire gathering to digest. Participants then voted electronically using

handheld devices to select six global priorities for discussion out of a

possible pre-selected twelve, plus two additional priorities identified by the

delegates themselves, and to identify key challenges within each of their six

chosen priority areas.”92

The results of discussions served to update the annual meeting’s agenda and build the

tone for the rest of the discussions and panels.

The data showed that the majority of the participants were middle-aged male

European and North American businesspeople(see Figure 2).93

89 Ibid.90 Ibid.91 Ibid.92 World Economic Forum, “Global Town Hall Report,” 26 January 2005, http://www.weforum.org/site/homepublic.nsf/Content/Annual+Meeting+2005, accessed May 10, 2012.93 Timothy Garton Ash, “Davos Man’s Death Wish,” Guardian (3 February 2005), accessed May 10, 2012, http://www.guardian.co.uk, .

32

Figure 2: Demographic distribution of participants at the Davos Global Town Hall

meeting, January 200594

Although the demographic breakdown of attendees might not reflect the composition

of global civil society, the major subjects discussed by those attendees of the Global

Town Hall meeting, which included “23 heads of state, 72 cabinet-level ministers, 26

religious leaders, 50 heads of CSOs, 15 trades union leaders, and nearly 500 leaders

of global businesses”,95 did not reflect the same priorities as such a conference of

Euro-American businessmen might have reflected ten years before.96

Under the theme of the Davos 2005 meeting, representations to the global public and

discussions concentrated on the following global social concerns: poverty alleviation,

especially in Africa; international aid for victims of natural disasters, which brought

directly into concentration by the Indonesian earthquake and the resultant Indian

Ocean tsunami on 26 December 2004, which killed more than 250,000 people;

corporate social responsibility; and discussion about broader cross-section global

governance issues. At the Global Town Hall, before selecting global priority topics for

discussion and debating, participants were encouraged to express what values they

thought could be the steer to global elites in the decision making processes.

Participants’ most preferred values were integrity, equity, tolerance, compassion,

94 Pigman, The World Economic Forum: A Multi-stakeholder Approach to Global Governance, 66.95 World Economic Forum (2005) “Participants ‘Get Down to Business’ On First Day of World Economic Forum Annual Meeting 2005 in Davos,” accessed May 10,2012. http://www.weforum.org. 96 Ibid.

33

stewardship and selflessness. Keeping these values in mind, the attendees were asked

to choose six global priority topics for discussion. They chose the following topics, in

order by percentage of attendees voting for each issue as one of the six choices:

poverty 64.4%, equitable globalization 54.9%, climate change 51.2%, education

43.9%, the Middle East 43.7%, global governance 43.2%.97

As with other annual meetings, there were three main information streams for the

public to learn about the Forum: First, the content of the discussions and events

themselves, which can be broadcasted through interviews, transcripts and other forms

of direct observations; Second, the Forum’s own publishment of the discussions and

events, which were accessible on the official website of the Forum for general public,

and video and audio clips which provided to the media; Third, the media’s own

representation and interpretation of the meeting, based on the Forum information

feedbacks and the on-site reports. Behind these public information streams, there lies

a private model of knowledge and information which shared between Forum members

that is not accessible for viewing or interpreted by the public directly, but can only be

elaborated secondarily by the analysis of business deals, public initiatives, and other

forms of projects followed on the meeting. These three ways of public information

streams creates a useful series of images that shed light on both the outputs and

processes of the Forum Annual Meeting.98

Every Annual Meeting is co-chaired by senior managers from big global firms,

usually CEOs who have registered and signed to be partners of the annual meeting for

a certain year. For Forum’s management, the co-chairs of a Davos meeting play an

important role in the communication of the participants who attend to the gathering

with the outside world. The co-chairs had more public faces than the Davos annual

meeting itself. The 2005 meeting was co-chaired by six senior managers representing

a diversity covers different types of business, a wide range of regions, and genders,

97 World Economic Forum, “Global Town Hall Report”, op.cit. 98 Pigman, The World Economic Forum: A Multi-stakeholder Approach to Global Governance, 67-68.

34

they were listed on the official website of the Forum:

“Bill Gates, co-founder, Bill and Melinda Gates Foundation, and Chairman

and Chief Software Architect, Microsoft Corporation, USA; N. R. Narayana

Murthy, Chairman of the Board and Chief Mentor, Infosys Technologies,

India; Lubna S. Olayan, Chief Executive Officer, Olayan Financing

Company, Saudi Arabia; Charles Prince, Chief Executive Officer, Citigroup,

USA; John A. Thain, Chief Executive Officer, New York Stock Exchange,

USA; Daniel Vasella, Chairman and Chief Executive Officer,

Novartis,Switzerland.”99

Although the name list showed preponderance of male European and Americans and

leaders of financial and technology businesses, only within a small group of women,

the emerging Asian powers and the Arab world had a high visibility. Lubna Olayan is

a leader among Saudi financial businesses, one of a small amount of women CEOs of

major firms in Middle East. “Olayan is the CEO of Olayan Financing, a firm with

over $2 billion in assets, $1 billion in sales and over 8800 employees in 2001. Ranked

by Fortune Magazine as one of the fifty most powerful women outside of the United

States,”100 Olayan spoke out sharply in Saudi Arabia in terms of gender equality

problem as part of an obstacle for Saudi economic growth.101 N. R. Narayana Murthy

is the chairman of Infosys, one of the largest companies in India, a leader in global

technology businesses.

At Davos 2005 meeting, perhaps the best headline speech was British Prime Minister

Tony Blair’s remarks in the plenary conference of the meeting on 27 January 2005.

He organized his speech under the topic of global “interdependence”: while a series of

global events after 9/11 incident had caused the global problems to stand out in

sharper relief, the similar incidents had also underscored the importance of global

interdependence and the need for global problem solving cooperation. Blair used his

99 Ibid.100 World Economic Forum, What We Do, Davos Annual Meeting 2001, http://www.weforum.org, accessed January 10, 2012.101 World Economic Forum 2001, Davos Summit panel, The Corporation and the Public, 27 January 2001, http://www.weforum.org, accessed January 10, 2013.

35

remarks to “sell” the inaugural speech of US President George W. Bush in the

previous week to the gathering at Davos which representing the whole global

community. Blair said that Bush’s speech indicated a transformation of US foreign

policy towards a more cooperative way, recognizing the importance of global

interdependence for providing a solution on key global concerns such as terrorism and

Poverty. As Blair saw it, the change in the US diplomatic approach opened the door

for a common global interest to address five problems: “fighting terrorism through

democratization, supporting transformation in Iraq, solving the Israeli-Palestinian

conflict, addressing global climate change and ending poverty in Africa.”102 During

British presidency of the G8, the latter two events became core issues. Therefore,

Blair sought for support for his proposed solutions: “among other things, a doubling

of Africa aid through mechanisms such as an International Finance Facility and a

major increase in conflict resolution efforts.” On climate change issue, Blair

addressed his happiness to accept the US refusal to sign the Kyoto protocol and its

commitment to the timelines and approaches for greenhouse gas reductions.This

urged the US to accept the importance of achieving its goals and worked with the

initiatives for developing and industrial countries.103 Blair’s speech was strategically

well organized, it took advantage of an audience from the cross-section highest-

profile of civil society and global business to call support for global governance

initiatives that were possibly to face substantial opposition. By doing this at Davos

meeting, Blair also validated the expectations of the participants and the preeminence

of the Forum.104

Another approach that many business and political leaders raised the economic,

political, social issues was to use Davos as a venue to speak out their ideas in front of

the media on major policy debates. Richard Shelby, US Senator and chairman of the

Senate Banking Committee, expressed his concerns about the social security reform

102 Pigman, The World Economic Forum: A Multi-stakeholder Approach to Global Governance, 69.103 World Economic Forum “Special Address by Tony Blair, Prime Minister of the United Kingdom,” 27 January 2005, http://www.weforum.org, accessed January 28, 2013.104 Pigman, The World Economic Forum: A Multi-stakeholder Approach to Global Governance, 70.

36

legislation signed by President George W. Bush, while Senator John McCain,

expressed his optimistic attitude, believed Bush could get some support from

Democratic Party.105 Pakistani Prime Minister Shaukat Aziz spoke in an interview that

he would give a proposal to Indian Prime Minister Manmohan Singh about a new

series of bilateral confidence-building policies without prejudicing the solutions of

Kashmir dispute in the following week.106 Aziz also captured the attention from

international business leaders to the Pakistani economic reform policy, including the

proposed privatizations of all Pakistani state-owned companies, and the recent success

of Pakistan’s economy, with a growth reported at 6.4% in 2004 and a growth of 7%

targeted in 2005.107 “George Soros, the largest donor to the campaign to defeat George

W. Bush’s US presidential re-election bid, used an interview at Davos with

Bloomberg Media to argue that Democratic presidential challenger Senator John

Kerry had failed to articulate a credible economic alternative that would resonate with

voters.”108

Perhaps the debate about US public finance and its influence on the relative value of

the dollar became the most significant debate in front of the media at Davos. By using

an interview, Microsoft CEO Bill Gates discussed with Charlie Rose of the US

network PBS on the issue of the US dollar, predicted that the value of the dollar

would decline due to the unprecedented level of US government’s public debt, as a

response to the criticism from the US federal budget deficit made by German Deputy

Finance Minister Caio Koch-Weser.109 The debate against US public finance

continued. An adviser of China’s central bank,Yu Yongding, calling on US to lower its

current deficit and stop urging China to revalue the RMB. Yu’s comments denied by a

Chinese central bank official to comment anonymously in Beijing that “Yu’s opinions 105 Krishna Guha, “Doubts Over US Social Security Reform,” Financial Times, 29 January 2005, http://www.ft.com, accessed January 31, 2014.106 Krishna Guha, “Pakistan to Offer India Kashmir-free Project Deals,” Financial Times, 30 January 2005, http://www.ft.com, accessed January 31, 2014.107 Tim Weber, “Pakistan Pushes India on Pipeline,” BBC News, http://www.bbc.co.uk, 31 January 2005, accessed January 31, 2014.108 Michael McKee, “Soros Says Kerry’s Failings Undermined Campaign Against Bush,” Bloomberg.com, 30 January 2005, http://www.bloomberg.com, accessed January 31, 2014.109 James Hertling and Simon Clark, “Bill Gates, World’s Richest Man, Bets Against Dollar (Update 3)”, Bloomberg.com, 29 January 2005, http://www.bloomberg.com, accessed January 31, 2012.

37

were his own and that China remained committed to the yuan’s fixed peg against the

US dollar.”110

Davos 2005 meeting fulfilled its promise to process global debates on new solutions

to poverty alleviation when France’s President Jacques Chirac proposed publicly to

create a new form of global tax, such as a duty on capital flows, financial transactions,

or aviation fuel to support international aid. Chirac succeeded in attracting major

participants of the meeting in the central theme of how best should the world fight

poverty. Speaking at a panel discussion, South Africa’s President Thabo Mbeki spoke

out his concern that such a tax would be very time consuming and too difficult to be

enacted by governments and might distract attentions from other more effective ways

of promoting development aid. Bill Clinton thought that the tax proposal would

require too much global political strength to be enacted. Bill Gates calculated that it

would take five to ten years for the global tax to be enacted. By contrast, Tony Blair,

advocated to keep the tax proposal on the table, and Bono said the total debt

forgiveness from the World Bank and IMF of the poorest countries would be a more

effective mechanism.111

A debate on a more philosophical issue about the nature of capitalism, which was

close to the discursive focus of 2005 annual meeting. Entered by chairman of BP,

Lord Browne, he criticized the enlargement of what he called “pseudo markets” under

the institutions responsible for the public service. Browne said, as the implementation

of market mechanisms, the institutions such as hospitals, prisons and universities, was

“damaging the professional ethos” in public services.112 In Lord Browne’s view, for

government to set a market-like mechanism in core public services would intensified

negative sentiment from the public towards the private sectors more broadly.

110 James Hertling, “Chinese Officials Back ‘Stable’ Currency, Rebuff Global Appeal,” Bloomberg.com, 29 January, http://www.bloomberg.com, accessed January 31, 2012.111 Alan Beattie and Krishna Guha, “Chirac’s Tax Plans to Fund Aid Fail to Convince,” Financial Times, 27 January 2005, http://www.ft.com, accessed January 28, 2014.112 Krishna Guha, “BP Chief Slams Rise of ‘Pseudo Markets,’ “ Financial Times, 27 January 2005, http://www.ft.com, accessed January 28, 2014.

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Browne’s statements were reported in the media in a political debate in the Great

Britain pitting Blair’s plans to use market mechanism to promote public services

efficiency against the doubt of Chancellor of the Exchequer Gordon Brown towards

such plans.113 Lord Browne’s concerns were meaningful to business leaders to think

over how the public understands the markets structuring through political bargaining

and how public attitudes may change as a result of how markets are structured.114

The Davos Annual Meeting also acts as an ideal platform for adopting public

diplomacy to the ongoing multilateral cooperations, such as trade liberalization

negotiations of the Doha Development Round of World Trade Organization. WTO

Director General Supachai Panitchpakdi spoke at Davos publicly to urge WTO

member states to enhance their efforts and make commitments that would lead to a

successful trade round by summer 2005. With a ministerial meeting to pass a trade

agreement draft in December 2005, a lot of issues needed to be done to minimize the

huge gaps in major member states’ positions, especially on agricultural trade.115

Panitchpakdi scheduled the meeting with ministers of trade departments from twenty

WTO member states on the last day of the conference, there is no denying that to

speak out at the beginning was a good strategy, “as it set the stage for interchange

between government, business and civil society officials in the panel discussions to

build diplomatic momentum favouring the making of concessions to complete the

round.”116

6.1.2 Annual Meeting of the New Champions 2013

In 2007, the Forum established the Annual Meeting of the New Champions. The

meeting, also called Summer Davos, is held in China annually, alternating between

the municipality of Tianjin, locates in North China and city of Dalian in Northeast

China, bringing 1500 participants together from what the Forum calls Global Growth

113 Ibid.114 Pigman, The World Economic Forum: A Multi-stakeholder Approach to Global Governance, 71.115 Tim Weber, “WTO Boss Pushes for Trade Deal,” BBC News, 28 January 2005, http://www.bbc.co.uk, accessed March 28, 2014.116 Pigman, The World Economic Forum: A Multi-stakeholder Approach to Global Governance, 72.

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Companies, largely from emerging countries such as China, Russia, India, Brazil and

Mexico, also including fast growing companies from developed countries. The

meeting engages with the young generation of global leaders, competitive cities, fast-

growing regions, and technology pioneers from all around the world. As the Davos

annual meetings hold every winter, Summer Davos also creates a unique venue for

exchange between leaders in governments, academia, civil society and media.117

In 2013, The Annual Meeting of the New Champions in its seventh year, took place in

Dalian in a sparkling new conference center at the coast of the Bohai Sea. The

meeting was held in close cooperation with the Chinese government and came at a

right time when the world was facing an unprecedented series of global challenges –

political, economic, societal and environmental. A transforming international order,

widening social inequalities, natural resource shortages, and demographic shifts are

pressing governments to create economic growth and employment opportunities while

ensuring social equity, fiscal prudence, and environmental sustainability. The

concerns raised by changing consumer behaviors and emerging science technologies

require innovative solutions. These factors indicated that the future where innovation

– “the effort to create purposeful, focused change in an organization’s or institution’s

economic or social potential – is increasingly important as a driver of economic

development, competitiveness and risk resilience.”118 Under the theme “Meeting the

Innovation Imperative”, the intensive three-day meeting discussed the imperative of

innovation under four sub-themes: “Transforming Industry Ecosystems; Unleashing

Innovation; Building Societal Resilience; and Connecting Markets.”119

Over 1600 high-ranked leaders from over 90 countries gathered in the Dalian

International Conference Center to discuss critical industry, economic and

technological developments that were reshaping growth patterns and business models.

117 “Summer Davos”, accessed May 10, 2014, http://topic.chinadaily.com.cn/index/special/sid/505118 “Annual Meeting of the New Champions 2013”, accessed May 10, 2014, http://www.weforum.org/reports/annual-meeting-new-champions-2013-meeting-innovation-imperative/, p.3119 Ibid.:1.

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At the center of the Summer Davos are the “New Champions” - the enterprises, the

organizations and individuals at the forefront battlefield to create the future economy.

Including “Global Growth Companies, Technology Pioneers, Young Global Leaders,

Young Scientists,Global Shapers and Social Entrepreneurs. The New Champions were

joined by the Forum’s Foundation Members and Partners, public figures, faculty,

Global Agenda Council Members and media leaders.”120 Highlighting the importance

of innovation, Klaus Schwab said in the Opening Plenary, “High innovation countries,

and not low innovation countries, will be those that prosper in the future.”121

Premier Li Keqiang said that China would have to depend on reforms to attain a

healthy, sustainable and long-term development of the economy, while emphasizing

future reforms which would be carried out in many fields. Li said the key point to

China’s economic reforms is to “balance well the roles of the government, the market

and society.”122 Li also said, current achievements of Chinese economy were due to

the opening- up more than 30 years ago. The Chinese government should let the

market take its role in order to produce more vitality. The government has improved

the administrative approval system in 2003, relegating or scrapping over 200 approval

rights, which were held by the government. “The reforms have affected the vested

interests by removing the approval rights of many government departments, thus

reducing the opportunities for corruption. China will also create a fair environment for

market competition, letting all kinds of enterprises enjoy the same access to

opportunities.”123 At the same time, “the government will continue to crack down on

infringement of intellectual property rights and fraudulence,”124 and “our purpose of

reforms is to let more people enjoy the fruits they will bring,”said the Premier Li.

Premier Li indicated that China’s economic reform inevitably involved financial field

which China firmly sticked to push forward and China “will continue on its path of

120 Ibid.:3.121 Ibid.: 4.122 “China Needs Reforms for Economic Development: Premier”, accessed May 10, 2014, http://english.runsky.com/2013-09/11/content_4800753.htm123 Ibid.124 Ibid.

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interest rate marketization after it frees up controls on bank lending rates. China will

also diversify its capital market and widen financing channels to allow more direct

financing.”125 To raise the yuan's global reach during recent years, the Chinese

government has “encouraged the use of yuan in transnational trade and investment

settlement in offshore markets such as Hong Kong and London to create more

channels for the currency to circulate outside the Chinese mainland.”126

Li also mentioned challenges in China’s current development. He pointed out that the

pollution problems were as a result of China’s extensive development. However, the

government would committed to accelerate the elimination of old production

capacities and work harder to invent environmental friendly and resource-saving

facilities. Li reaffirmed that China’ willing to carry out innovative technological

cooperation with global business representatives and China encourages domestic

companies to expand business operations abroad.127

Dr. Hans-Paul Burkner, chairman of the Boston Consulting Group, who also

participated in Summer Davos, in response to Premier Li’s speech, he said Premier Li

was aware of China’s current opportunities and challenges: “The premier is obviously

very aware of the various challenges that China faces, but he also is very determined

to address them and he sees great opportunities to move forward, the clear expectation

is that there will be change in the Chinese economy and Chinese society.”128

Chinese Premier Li Keqiang's remarks at the opening ceremony of the Summer Davos

has attracted positive international reactions from media and foreign experts lauding it

as a rising confidence in economic recovery. Ryan Rutkowski, research analyst on

China said "the Chinese new leadership has done well managing expectations about

growth.They are telling the world that they are happy with the current growth level of

125 Ibid.126 Ibid.127 Ibid.128 Ibid.

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7-8 percent, and have made the necessary adjustments to maintain this level of

growth"129 Li reaffirmed his commitment to reform and innovation said: “Innovation

is the running theme and spirit of the policies adopted by the Chinese government,

and it is the banner that we will always hold high.”130 Li also stressed that “China has

a strong net international investment position and low exposure to short-term foreign

investments due to capital controls.”131 It was said that China had decided to propose a

new stimulus policy after "weighing the pros and cons," and "medium to high speed"

should be maintained "at all costs."132 Associated Press pointed out that Chinai's

determination as "promising to promote growth by opening markets to private

competition and improving the investment climate for foreign companies."133

Macharia Munene, a lecturer in International Relations at the University of Nairobi,

said that Li's speech indicated that China has become a major player in the economic,

political, and social sectors of the global economy. Due to the worldwide economic

slowdown, this offered encouragement to the rest of the globe to enhance

collaboration on all fronts.134

A session named “The New Growth Compass” during Summer Davos was held on

September 12, 2013. Zhu Min, Deputy Managing Director of International Monetary

Fund (IMF), believed that the emerging Chinese market would improve global market

even though the speed of growth had been slowing down. “The economy growth in

Asia will increase by 6 to 8 percent in the following 2 years and the main growth

power is still coming from emerging market.”135 said Zhu. The President of Peterson

Institute for International Economics Adam S. Posen thought that “more technologies

are dispersed at emerging market, including the further development in IT

technology.”136 He also believed that these new technologies would be widely used in

129 “Experts, Media Say Premier Li's Speech at Summer Davos Boosts Market Confidence”, accessed May 10, 2014, http://english.runsky.com/2013-09/14/content_4804407.htm130 “Annual Meeting of the New Champions 2013”, op.cit.:4.131 “Experts, Media Say Premier Li's Speech at Summer Davos Boosts Market Confidence”, op.cit.132 Ibid.133 Ibid.134 Ibid.135 “China is the Most Powerful Growth Engine,” accessed May 10, 2014, http://english.runsky.com/2013-09/14/content_4804386.htm136 Ibid.

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China. Edward Y. M. Zhu, the CEO of CHIC Group, participated in the session and

said that “China is still the most powerful growth engine who will drive the economic

growth of the whole world.”137 Li Daokui, Director of Tsinghua University, agreed

with Zhu’s opinion and stressed that Chinese economy did influence other countries

as it was deeply integrated in the world economy. All the participants reached an

agreement that “the new growth engine comes from emerging market and China is

still the most powerful growth engine who will become the main engine to promote

the growth of the whole world.”138

Former British Prime Minister Gordon Brown said that China's success would

determine global economic growth, and determine whether the twenty-first century

would belong to the Asian century as well. In an article issued by Reuters, Brown said

that the Chinese officials would reveal how long China needs to make an economic

transition from an middle-income, investment-led country to a high-income,

consumer-driven, and innovative one, and when it would become the largest economy

in the world. “Can China circumvent what we know as 'the middle-income trap' that

has for decades denied high-income status for Latin America and Asian countries like

Malaysia and Thailand?”139 Brown asked. China's new leadership in promoting levels

of innovation, skills and entrepreneurship would be the main discussing points at the

New Champions summit. Brown quoted Premier Li Keqiang as saying that China

“can no longer afford to continue with the old model of consumption and high

investment.”140 Concerning the history of China's economic development during

recent years, Brown said during the first period of modernization, China's process to

middle-income country had been dramatic and astounding. “In the first decade of the

century, China became the world's largest manufacturer. In 2009, China surpassed

Germany as the world's largest exporter. In 2010 it passed the U.S. to become the

world's largest car producer,”141 Brown predicted that China’s economy would depend 137 Ibid.138 Ibid.139 “China's commitment to growth will drive global economy: Gordon Brown”, accessed May 10, 2014, http://english.runsky.com/2013-09/14/content_4804410.htm140 Ibid.141 Ibid.

44

less on exports to the developed countries. In the last decade, merchandise exports to

developing countries have already doubled to 25%. Brown also pointed out that China

should not rely on “one-off” advantages any more such as the progress from an

agricultural country to an industrial one, low-cost labor, and the support from

membership in the WTO.142 “China knows it will have to move quickly to exploit the

‘Third Industrial Revolution’ from 3D printing and digital design to nanotechnology,

biotechnology and genetics, hence its one million research and development workers

and its plans for 100 million more graduates,”143 Brown said. He also noted that the

most serious restraints for long-term economic success are the disparities in benefits,

being addressed under Premier Li’s desire to “promote social equity.”144

6.2 From the Perspective of Globalization and Anti-globalization

So far, the most serious critics of the Forum are the controversies to its agenda and

discourse. Many scholars of the conservative left regard the Forum as a manifestation

of a historic bloc from the perspective of Gramscianism, at the center of which

economic profits produced by finance capital and manufacturing are engaged to

policies and ideas.145 Gramsci argued that leading social classes or groups

representing the main stream model of production form governing alliances, called as

historic blocs, with other groups aim at keeping sufficient consent of the governed

people to maintain social order and peace. According to Gramsci, leading groups

utilize ideologies, such as culture and nationalism to persuade other social classes to

join in the historic bloc. They are capable to reach their goal through a process called

trasformismo, wherein they make compromises in terms of economic benefit

distribution and power that are adequate to guarantee other social groups’

requirements under the leading group’s rule but do not threaten the leading group’s

power hold over.146 For neo-Gramscianism researchers in the 1990s, the rise of the

opposition to globalization and neoliberalism linked across national borders raised the

142 Ibid.143 Ibid.144 Ibid.145 Graz, op.cit.:320.146 Pigman, The World Economic Forum: A Multi-stakeholder Approach to Global Governance, 124.

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possibility that “technology has changed global society in such a way that a

transnational counter-hegemonic project may have become feasible.”147 Whether the

experience of challenging the World Economic Forum enhanced such an oppositional

opinion of social hegemonies or not will become an evident in the following

discussion.

The opposition to the Forum came into being in the late 1990s. It started as the

populist ally that opposed the signing of the Treaty of Marrakech in 1995, which

created by US membership in the WTO, IMF, ongoing projects of the World Bank,

and other multilateral financial organizations in the late 1990s, and the proposed

Multilateral Agreement on Investment (MAI). Ronald Deibert characterized the ally

as “a cross-national network of citizen activists linked by electronic mailing lists and

World-Wide Web home pages that vibrate with activity monitoring the global political

economy like a virtual watchdog.”148 Nationalist and ruralist institutions such as the

French Confédération Paysanne Francise (CPF) participated with Swiss civil society

institutions such as the Berne Declaration, left-wing coalitions such as the Anti-WTO

Coordination Switzerland and cross-nation environmental groups such as Friends of

the Earth. Coincidently with the opening of the Davos annual meeting in January

1998, an umbrella group of 192 institutions from 54 countries reported “an aggregate

membership of 20 million and titling itself People’s Global Action Against ‘Free’

Trade and the WTO, issued a manifesto called ‘Declaration Against the Globalisers of

Misery.’”149 It criticized the centralization of global economic and political power

brought by globalization and its change to unaccountable and undemocratic

organizations, such as the WTO, and opposed the growth of “informal” business

groups such as the World Economic Forum. People’s Global Action held a weeklong

meeting in Geneva participated by 600 participants two weeks after the 1998 Davos

147 Robert W. Cox, “Gramsci, Hegemony, and International Relations: An Essay in Method,” in Robert W. Cox with Timothy J. Sinclair, Approaches to World Order (Cambridge: Cambridge University Press, 1996): 128.148 Ronald J. Deibert, “International Plug ‘n’ Play? Citizen Activism, the Internet, and Global Public Policy,” International Studies Perspectives 1(2000): 258.149 Charles Overbeek, “Davos 98; The World Economic Forum Strikes Again,” Parascope.com (2000) accessed May 9, 2014, http://www.parascope.com.

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annual meeting.150

More dramatically, an oppositional organization, called the World Social Forum was

created by some civil society organizations to propagate an alternative and anti-

hegemonic idea of globalization with the World Economic Forum’s annual meeting

simultaneously. The first annual meeting of the World Social Forum was held in

Porto Alegre, Brazil at late January 2001, bringing thousands of representatives from

civil society organizations together to publicize and debate ideas to promote human

rights, social equity, sustainable development, and the topic about international

organizations democratization.151 Jose Bové, a leader of the demonstrations against

Davos annual meeting in 2000, took a leading role at the World Social Forum meeting

in 2001.152 In the first World Social Forum annual meeting Bové participated in a raid

to a farm near Porto Alegre which owned by the international agribusiness company

Monsanto, in which uprooted the genetical modified crops. The World Social Forum

grew swiftly as a rival event to the Davos annual meeting. The World Social Forum

meeting in 2005 attracted over 100000 participants from more than 2000 institutions

and from 119 countries. More than 2000 debates took place which organized under

eleven themes, including climate change, land reform, human rights and “ethics,

cosmo-visions and spiritualities.”153

The success of the World Social Forum in public debate on how the international

economy pattern should be organized, and “in getting many of their agenda events

included in the discussions at Davos, has raised significant questions for World Social

Forum organizers about their organization’s future.”154 Some organizers argued that

the World Social Forum had already achieved its major objectives, and the members

should concentrate their strength on pressing the agenda at Davos, while others

150 Overbeek, ibid.151 Pigman, The World Economic Forum: A Multi-stakeholder Approach to Global Governance, 129.152 Raymond Colitt, “Parallel Forum Provides Alternative,” Financial Times/ www.ft.com, 25 January 2001.153 Steve Kingstone, “World Social Forum Gets Under Way,” BBC News, 28 January 2005, http://www.bbc.com, accessed April 28 , 2013;154 Kingstone, ibid.

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thought that there lies a need for World Social Forum to provoke public consciousness

of their events from outside the World Economic Forum. Brazilian President Inácio

Lula da Silva, elected as Brazilian President by massive support from his critics on

neoliberal globalization about Brazil’s poor class, gave speeched on the annual

meetings of both the World Economic Forum and the World Social Forum in 2005. He

displeased some of his radical populist supporters at the World Social Forum by his

decision to go to Davos, but in the process emphasized the necessity of bringing the

World Social Forum agenda to Davos. Lula da Silva’s strategy indicated one of the

weak points of the World Social Forum as a platform for global concern debating:

whilst accommodating and attracting much larger numbers of attendees than the

World Economic Forum, the World Social Forum has “attracted a relatively less

diverse range of participants, both in terms of ideological perspective and in terms of

their respective institutional capacities for action, than the range of organizations in

attendance at Davos.”155

About critics of its agenda and discourse, the World Economic Forum treated those

critics seriously from the very beginning. From the perspective of Klaus Schwab and

the managers, the multi-stakeholder theory to global governance and problem solving

that has been a pillar to the Forum which has continuously attempt to be inclusive of

the whole civil society as a stakeholder. What the demonstrations against the Forum

and founding of the World Social Forum brought original problem to the World

Economic Forum was that “they had thitherto not done a sufficiently good job of

communicating the opportunities and channels for participation, and that they needed

to take a more proactive approach to broadening participation of civil society

organizations and other stakeholders across global civil society, including the global

public itself.”156 Beginning at the annual meeting in 2003, the Forum began co-hosting

the “Open Forum” with the Federation of Swiss Protestant Churches during the

meeting. The Open Forum, held in a 300-seat audio room in Davos school, features

155 Pigman, The World Economic Forum: A Multi-stakeholder Approach to Global Governance, 129-130.156 Pigman, ibid.

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public debates on major economic, political and social issues being discussed by the

representatives to the Annual Meeting. Every Open Forum is co-sponsored by a civil

society organization, and with major attendees from across the range of social

communities and Forum members.157

The World Economic Forum expanded invitations to CSOs to participate in annual

meeting and other Forum meetings as well, including the organizations who were

active at the World Social Forum. For example, Amnesty International, delivered the

same values on globalization to the World Economic Forum and the World Social

Forum in January 2003: “Globalise respect for human rights, globalise justice and

globalise accountability for those who abuse rights.”158 As the global discourse

changed and the two Forums evolved, with a large number of CSOs participating in

both Forum meetings, and with a dialogue in which different views could be

discussed without any extreme ideological polarization. In January 2003, Klaus

Schwab told Inter Press News Service in Davos annual meeting: “I have just one word

to Porto Alegre – we are the same. Both events, in principle, have the same objectives.

That is to create a better world.”159 When been asked whether the thinking process of

the World Economic Forum and World Social Forum could be merged together to

create a visionary venue, Schwab answered that both Forums were trying their best to

achieve the same goal, but the World Social Forum was restricted by a specific

ideology, the World Economic Forum was not. He welcomed communication between

the both Forums as long as they can learn from each other but not about one side only

aiming to persuade the other of the rightness.160

Interested in the World Social Forum, World Economic Forum Managing Director

André Schneider participated in a debate with three World Social Forum members in

157 World Economic Forum 2006, Events, Annual Meeting, Open Forum, http://www.weforum.org, accessed 25 January 2006.158 Amnesty International 2006, “World Social Forum/World Economic Forum,” web.amnesty.org/pages/ec-worldfora-eng, accessed January 26, 2014.159 Emad Mekay, “Davos and Porto Alegre Pursue Identical Aims, Says WEF Chief,” Inter Press News Service Agency, 25 January 2003.160 Pigman, The World Economic Forum: A Multi-stakeholder Approach to Global Governance, 131.

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the summer 2005 in Paris. Schneider emphasized that the World Economic Forum

welcomes communications with all institutions who are willing to participate in a civil

manner. One reason why the World Economic Forum is successful in dealing with the

critics is letting the critics have acknowledged publicly. Fatima Melo, an organizer of

the World Social Forum’s 2005 meeting and a representative of Brazilian NGOs, told

BBC, “many of our approaches have been incorporated by Davos and by institutions

like the World Bank.”161 At the end of the Davos annual meeting in 2005, the Forum’s

efforts to expand the participation of CSOs was by taking measures so successful that,

which concentrated extensively on global climate change and poverty reduction, the

Confederation of British Industry’s Director General Digby Jones complained in

public that these organizations “had ‘hijacked’ the Forum and were forcing business

to apologize for itself.”162

The Forum also took institutional measures to deal with the social agenda of the

critics.163 One such measure was to focus on global issues of specific concern to

women and to increase women’s participation in Forum’s activities. In 2001 the

Forum set up the Women Leaders Programme to drive attention on the role of women

in global society, the global conditions of women and women’s roles in leadership.

Led by Marilyn Carlson Nelson, Chair and CEO of Carlson Companies, an American

marketing, hospitality and travel firm, the Women Leaders Programme holds panel

discussions and seminars under themes around the world and economic research

about the conditions of women. In autumn 2005 the Programme and the Forum’s

Global Competitiveness Report published a research report “Women’s Empowerment:

Measuring the Global Gender Gap,” which studies on the influence of the lack of

usage of the economic resource and women’s power upon the competitiveness of

countries. The study measures the women groups in 58 countries have already

achieved equality with men according to educational attainment, economic

161 Steve Kingstone, “World Social Forum Gets Under Way,” BBC News, 28 January 2005, http://www.bbc.com, accessed May 10, 2014.162 Larry Elliot, “CBI Chief Claims Davos Hijacked by NGOs,” Guardian, 31 January 2005.163 Pigman, The World Economic Forum: A Multi-stakeholder Approach to Global Governance, 131.

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opportunity, economic participation, political empowerment, well-being and health.

The report collected from public data from national statistics and international

organizations and from the Executive Opinion Survey, which served as a standard of

both best practices and weaknesses, and to improve policy transition from more

successful to less successful countries.164 The Women Leaders Programme also seeks

for efforts to increase the participation of women at the annual meeting from 8% to

15% between 2002 and 2005, and the percentage of female panelists from 9% to 13%

over the same period.165 “In an absolute sense those figures are not dramatic, but they

perhaps assume greater significance when one takes in the continuing under-

representation of women in senior management of global business.”166

Critics of the World Economic Forum have continued at the general level that the

projects and public debates hide its private feature as a network offering business

leaders get access to public decision makers and as a private platform for business

dealmaking.167 The basis for this claim, that the Forum is to some degree being

deceptive, possibly arose as a consequence of the effectiveness of its public

diplomacy in telling people its public activities and agenda. The relationships between

the Forum’s members and invited participants at meetings are not only transparent,

but also been widely reported by the Forum itself and the media. The Forum has little

reason to “publicize the private deals made by its members at Forum events and

venues, but lack of publicity hardly equates to an intent to deceive.”168 Moreover,

there is something inappropriate about the Forum’s private and public functions

taking place at the same time, and even there is something inappropriate about

business deals being negotiated privately, is more ideological and long-running in

nature.169 The Forum has already responded to this kind of critics by being maximum

164 Augusto Lopez-Claros and Saadia Zahidi (2005) “Women’s Empowerment: Measuring the Global Gender Gap” (Cologny/Geneva: World Economic Forum) p. 1.165 World Economic Forum (2006) About Us, Women Leaders Programme, http://www.weforum.org, accessed 2006;166 Pigman, The World Economic Forum: A Multi-stakeholder Approach to Global Governance, 132.167 Pigman, ibid.168 Pigman, ibid.169 Pigman, ibid.

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transparent to the public side of its internal operations and activities.170

A more concrete example of the criticism lies between “for-profit and not-for-profit

business activities as it relates to the Forum.”171 The Davos protesters raised their

doubt about the Forum’s role as a nonprofit organization. By attracting attention to the

relationships between the Forum and a series of private companies undertaken by

Schwab and from which, according to an article on Wall Street Journal front page

appearing at the time of the Davos annual meeting in 2000, Schwab profited

personally.172 The article criticized “Schwab for, among other things, accepting stock

options and a seat on the board of directors of San Francisco-based internet consulting

firm USWeb/CKS a fortnight after the Forum had awarded USWeb/CKS an $8

million contract in 1998.”173 Schwab told the New York Times “he had sought to make

the World Economic Forum Foundation the beneficiary of the options, but was

advised by council that the board member legally had to be the holder of the

options.”174 The escalation of this case highlighted the relationships between private

and public interests again. Forum opponents regarded Schwab’s business as evidence

of a paradox between the private and public faces of the Forum’s information

outcome, and duplicity over its nonprofit feature. By contrast, as online technology

journal Redherring.com journalist Tony Perkins found, “in the Silicon Valley, New

Economy business community these types of commercial relationships are considered

‘business as usual’ and not ethically questionable.”175 Schwab, hurt by the blame, said

“I never made one dollar based on using my privileged relationship with the forum for

me personally.”176 Relationships between the Forum’s public face and private business

are not unusual, and the Forum makes no intention to conceal them. In 1996 the

Forum established a joint venture with a French company, Nephthalie, called Global 170 Pigman, ibid.171 Pigman, ibid.172 Breffini O’Rourke, “World: Davos’s Smooth Surface Ruffled By Controversy,” Radio Free Europe/Radio Liberty, http://www.rferl.org, 27 January 2000.173 Pigman, The World Economic Forum: A Multi-stakeholder Approach to Global Governance, 133.174 Joyce Wadler, “The ‘Chief Visionary’ Discusses His Creation,” New York Times, 31 January 2002, http://www.nytimes.com, accessed May 1, 2014.175 Tony Perkins, “Davos dispatch,” Redherring, http://www.redherring.com, 29 January 2000.176 Joyce Wadler, “The ‘Chief Visionary’ Discusses His Creation,” New York Times, 31 January 2002, http://www.nytimes.com, accessed April 20, 2014.

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Event Management, later it became Publicis Events, in charge of all the logistics for

Davos annual meetings and other Forum conferences.177

For the staff’s personal behavior, the Forum’s board adheres to their commitment to

the ethical probity of their senior managers very seriously.178 Illustrated by the

Forum’s ex-CEO, Jose Maria Figueres. Figueres was a major officer for the Forum’s

board who was employed in the early 2000s. Holding degrees in Engineering from the

US West Point and Public Administration from the Kennedy School of Government

from Harvard University, he had “senior management posts in major Central

American firms in the 1980s before going on to serve as Costa Rica’s Minister for

Foreign Trade and Minister for Agriculture, and was subsequently elected President in

1994.”179 Although excellently qualified to manage the Forum, Figueres left the

Forum after he had “received payments as a consultant on information technology in

Costa Rica after he commenced employment at the Forum in the autumn of 2004 , and

that he had not disclosed to the Forum.”180 Although not illegal, Figueres’ action

violated the Forum’s strict management structure, and he decided to leave so as not to

damage the fame of the Forum.181

7. ConclusionAs an old saying goes, “imitation is the sincerest form of flattery.”182 One indicator of

the World Economic Forum’s success is the increasing numbers of followers and

imitators for its creation of a new institutional structure for global governance. For

example, “Forbes Magazine are sponsoring business leadership conferences with titles

such as ‘The Forbes CEO Forum,’”183 to which an amount of stakeholders are invited

to attend. The 2005 Forbes CEO Forum invited former US President George Bush the

177 Pigman, The World Economic Forum: A Multi-stakeholder Approach to Global Governance, 134.178 Pigman, ibid.179 Pigman, ibid.180 Pigman, ibid.181 Pigman, ibid.182 Pigman, ibid.:152.183 Pigman, ibid.:150.

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Elder.184 Not only by appropriating names like Forum is the imitation of the approach

and style at such meetings. Former US President Bill Clinton, he is one of the biggest

followers and supporters of the Forum. He organized a successful high-level

conference in the New York City in September 2005 called the “Clinton Global

Initiative.” Speakers included UK Prime Minister Tony Blair, Jordan’s King

Abdullah, News Corp. CEO Rupert Murdoch, Nigerian President Olusegun Obasanjo,

and General Electric CEO Jeff Immelt. Clinton said the conference was patterned on

the World Economic Forum’s annual meeting, but Clinton also expressed his

expectation that the participants that they should be prepared to make specific efforts

to act on the themes of poverty alleviation, reducing environmental pollution and

easing religious conflict.185 The strategy documents showed that the Forum recognized

these imitations both as compliments to the successful approach the Forum has

developed and also as challenges to its evolution and development in order to keep the

best status. A deeper implication of the imitation suggests that a new model of global

governance may be “emerging in which organizations such as the World Economic

Forum will play a pivotal role as catalysts bringing together global, regional and local

stakeholders of different types to shape agendas and solve problems.”186

The long-lasting influence of the World Economic Forum is as a consequence of the

combination of the force from multi-stakeholder theory and critics from anti-

globalization movements. We should take a critical view on the development of the

Forum. On one side, multi-stakeholder approach is a kind of positive factor which

promotes the development of the Forum. On the other side, the emergence of anti-

globalization turns into a kind of negative factor which constrains the development of

the Forum and brings critics from the public which tries to slow down the speed of the

development of the Forum, the Forum learned from those critics and improve its

agenda and discourse swiftly. As a result, the force from the negative side -- critics

from anti-globalization is failed to restrain. On the contrary, it becomes the factor

184 “Forbes Conferences 2006,” http://www.forbesconferences.com, accessed May 12, 2014.185 Clinton Global Initiative 2006, http://www.clintonglobalinitiative.org, accessed May 10, 2014.186 Pigman, The World Economic Forum: A Multi-stakeholder Approach to Global Governance, 151.

54

which stimulates the grow of the Forum.

Since the Forum has been established for 43 years, the stakeholder approach adopted

by the founder Klaus Schwab has never failed to attract more and more global elites

to participate in the Davos annual meetings and other meetings of the Forum. As the

pillar theoretical support of the Forum, the stakeholder theory has its own

preeminence and assist the Forum to keep and to expand a long-lasting influence to

the whole world. The Forum is highlighting its agenda-shaping role and aspirations.

Guided by the stakeholder theory, the World Economic Forum took every chance to

expand its impact as it never stops learning from others' experience in business,

economy, politics and society. Besides the annual meetings take place in Davos every

winter, the Forum also organizes regional summits and other forms of meetings,

covering a broadening global events and hot topics. China has an emerging role in

global economy especially after the financial crisis, therefore, the Forum took China

into its global agenda. Under the guidance of stakeholder theory, the Forum was

initiated as a discussion venue for the European managers, as globalization develops,

the forum expanded its topic from European management to global concerns, the

components of stakeholders also expands from business fields to economic, political

and societal fields.

In the 21st century, when divergences existed in supporters of globalization and those

who opposed it, it was easy enough for both sides to hug the history of the Forum’s

evolution that put the Forum in the rival of how the global economy would grow.187

But til 2006 those who still hug either side “might be seen to be clinging to images

that are at best historical and at worst simply dated.”188 The protests against the Forum

and globalization, and the attacks of 9/11, all have informed the public that the

concept of neoliberal globalization is inevitable and invincible, which perhaps have

already reached its peak in the 1990s. Crucially, the stakeholder approach of global

187 Pigman, ibid.188 Pigman, ibid.: 152.

55

governance adopted by the Forum is one of the core forces challenging the concept of

markets and companies ruling freely over other social forces. The Forum argued that

“entrepreneurship in the global public interest” has always been its core mission.189

Whether they succeeded in dealing with many of the critics is another question. But

those who raised critics towards the Forum have realized that the most effective

method to articulate their goals and agenda is to do so by the Forum itself, many

companies and individuals who have pursued benefit from global markets have

realized that taking consideration of other types of stakeholders into the Forum is

indispensable to create the value that they pursue.190

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