Ski Resort Shapes Global Harmony

Paul Wood

Tuesday, Feb. 3, 1998 | 9:49 a.m.

DAVOS, SWITZERLAND -- 'Something happened here at Davos that probably only at Davos could happen," said United States Ambassador to the United Nations Bill Richardson.

He was referring to a rare handshake Sunday with Iran's Foreign Minister Kamal Kharrazi, at a closed panel. Mr. Richardson admits it's a small step, but is encouraged by the sign of a thaw in icy US-Iranian relations.

This sleepy Swiss ski resort once a year plays host to a remarkable gathering of the world's political, business, and academic elite at the World Economic Forum (WEF). The informal setting has proved fertile ground for the early stages of numerous world-shaking agreements.

First lady Hillary Rodham Clinton also was here, giving an address last night on "individual and collective priorities for the 21st century."

Other guests include German Chancellor Helmut Kohl, US House Speaker Newt Gingrich, Microsoft's Bill Gates, and the head of the French central bank.

As many as 1,000 chief executives from some of the world's biggest companies have paid more than $25,000 each for the chance to meet the host of presidents, prime ministers, and Cabinet-level officials at the forum.

"I spent seven months trying to fix a meeting with an Asian finance minister I needed to see," says one blue-chip company boss. "I just walk right up to him here, and in 10 minutes we fix our problem."

The managing director of the WEF is Claude Smadja, a Swiss. He says Davos is different from other big summits because it allows the world's elites to address issues in "a very focused way."

Mr. Smadja says, "The people who come here are part of a club, a very exclusive, high-level club. We have this ability in Davos always to be one step ahead of the curve - to spot issues as they begin to emerge."

This year, the formal agenda is dominated by the economic meltdown in Asia - an event that critics say the conference did little to predict. There is also much discussion of the European Union's (EU) ambitious plans to create a single currency next year. But with so many of the globe's decisionmakers in one place, real business has always been done on the margins of the gathering.

For instance, "Davos was a major step in the process of reconciliation in South Africa," says Smadja. "We were the only one on earth able to put on the same podium all the key players just after Nelson Mandela came out of jail" in 1990.

And Smadja adds that the agreement between Palestinian leader Yasser Arafat and the late Israeli Prime Minister Shimon Peres, which unlocked the 1993 Oslo peace process, was made at Davos.

"After the agreement was announced, there was this very moving moment when the two men walked into the hall, hand in hand, which was a very symbolic gesture," he says.

The forum is also known for big business deals. Says Smadja, "Davos is much more than just an exchange of ideas. It is truly the global business summit. Decisionmakers - political or business - won't just talk. They always have the agenda in mind. What happens in Davos helps them advance their agenda."

This year has seen a flow of announcements on Iraq. United Nations Secretary-General Kofi Annan used the conference to plead for more time for a diplomatic solution before military action is taken. Despite Russian Prime Minister Viktor Chernomyrdin's forceful warning against bombing, US Ambassador Richardson said, "Diplomacy is on its last legs."

And with almost the entire European Commission, which runs the EU, and most European heads of state in Davos, serious bargaining is being done on the future of the euro, as the planned single currency is known.

American leadership in the world is also on the formal conference agenda. Off the agenda, many participants are asking if President Clinton's personal problems have crippled US foreign policy. Most believe they have not.

Diplomats here say the misconduct allegations arose in part because of the US leader's success with the economy and foreign policy, inviting a bored media to focus on his personal life. They believe that may change when real problems - such as the Asian financial meltdown - recapture the limelight.

More than anything else, Davos is about a celebration of global capitalism. But Thai Prime Minister Chuan Leekpai used the forum to urge major industrial countries to make more political effort to resolve the Asian crisis. Otherwise, he warned they face the possibility of a worldwide recession, one he said would raise fundamental questions about the process of economic liberalization and globalization itself.