Report from Davos

With apologies for the group email... I thought this was interesting enough
to pass along. These are the notes from a friend of a friend who writes for
Newsday.

Adam XXXXXXXXX
Director, XXXXXXXXXXXX Environment Division

XXXX Xth Street, Suite XXX
San Rafael, CA 94901
Main Office:415-454-XXXX
Direct:415-257-XXXX
Cell: 415-305-XXXX


Hi Guys.

OK, hard to believe, but true. Yours truely has been hobnobbing with the
ruling class.

I spent a week in Davos, Switzerland at the World Economic Forum. I was
awarded a special pass which allowed me full access to not only the
entire official meeting, but also private dinners with the likes the
head of the Saudi Secret Police, presidents of various and sundry
countries, your Fortune 500 CEOS and the leaders of the most important
NGOs in the world. This was not typical press access. It was full-on,
unfettered, class A hobnobbing.

Davos, I discovered, is a breathtakingly beautiful spot, unlike anything
I'd ever experienced. Nestled high in the Swiss Alps, it's a three hours
train ride from Zurich that finds you climbing steadily through
snow-laden mountains that bring to mind Heidi and Audrey Hepburn (as in
the opening scenes of "Charade"). The EXTREMELY powerful arrive by
helicopter. The moderately powerful take the first class train. The NGOs
and we mere mortals reach heaven via coach train or a conference bus.
Once in Europe's bit of heaven conferees are scattered in hotels that
range from B&B to ultra luxury 5-stars, all of which are located along
one of only three streets that bisect the idyllic village of some 13,000
permanent residents.

Local Davos folks are fanatic about skiing, and the slopes are literally
a 5-15 minute bus ride away, depending on which astounding downhill you
care to try. I don't know how, so rather than come home in a full body
cast I merely watched.

This sweet little chalet village was during the WEF packed with about
3000 delegates and press, some 1000 Swiss police, another 400 Swiss
soldiers, numerous tanks and armored personnel carriers, gigantic rolls
of coiled barbed wire that gracefully cascaded down snow-covered
hillsides, missile launchers and assorted other tools of the national
security trade. The security precautions did not, of course, stop there.
Every single person who planned to enter the conference site had special
electronic badges which, upon being swiped across a reading pad,
produced a computer screen filled color portrait of the attendee, along
with his/her vital statistics. These were swiped and scrutinized by
soldiers and police every few minutes -- any time one passed through a
door, basically. The whole system was connected to handheld wireless
communication devices made by HP, which were issued to all VIPs. I got
one. Very cool, except when they crashed. Which, of course, they did
frequently. These devices supplied every imagineable piece of
information one could want about the conference, your fellow delegates,
Davos, the world news, etc. And they were emailing devices --- all
emails being monitored, of course, by Swiss cops.

Antiglobalization folks didn't stand a chance. Nor did Al Qaeda. After
all, if someone managed to take out Davos during WEF week the world
would basically lose a fair chunk of its ruling and governing class
POOF, just like that. So security was the name of the game. Metal
detectors, X-ray machines, shivering soldiers standing in blizzards,
etc.

Overall, here is what I learned about the state of our world:

- I was in a dinner with heads of Saudi and German FBI, plus the
foreign minister of Afghanistan. They all said that at its peak al Qaeda
had 70,000 members. Only 10% of them were trained in terrorism -- the
rest were military recruits. Of that 7000, they say all but about 200
are dead or in jail.

- But Al Qaeda, they say, is like a brand which has been heavily
franchised. And nobody knows how many unofficial franchises have been
spawned since 9/11.

- The global economy is in very very very very bad shape. Last year
when WEF met here in New York all I heard was, "Yeah, it's bad, but
recovery is right around the corner". This year "recovery" was a word
never uttered. Fear was palpable -- fear of enormous fiscal hysteria.
The watchwords were "deflation", "long term stagnation" and "collapse of
the dollar". All of this is without war.

- If the U.S. unilaterally goes to war, and it is anything short of a
quick surgical strike (lasting less than 30 days), the economists were
all predicting extreme economic gloom: falling dollar value, rising spot
market oil prices, the Fed pushing interest rates down towards zero with
resulting increase in national debt, severe trouble in all countries
whose currency is guaranteed agains the dollar (which is just about
everybody except the EU), a near cessation of all development and
humanitarian programs for poor countries. Very few economists or
ministers of finance predicted the world getting out of that economic
funk for minimally five-10 years, once the downward spiral ensues.

- Not surprisingly, the business community was in no mood to hear about
a war in Iraq. Except for diehard American Republicans, a few Brit
Tories and some Middle East folks the WEF was in a foul, angry
anti-American mood. Last year the WEF was a lovefest for America. This
year the mood was so ugly that it reminded me of what it felt like to be
an American overseas in the Reagan years. The rich -- whether they are
French or Chinese or just about anybody -- are livid about the Iraq
crisis primarily because they believe it will sink their financial
fortunes.

- Plenty are also infuriated because they disagree on policy grounds. I
learned a great deal. It goes FAR beyond the sorts of questions one
hears raised by demonstrators and in UN debates. For example:

- If Al Qaeda is down to merely 200 terrorists cadres and a
handful of wannabe franchises, what's all the fuss?

- The Middle East situation has never been worse. All hope for a
settlement between Israel and Palestine seems to have evaporated. The
energy should be focused on placing painful financial pressure on all
sides in that fight, forcing them to the negotiating table. Otherwise,
the ME may well explode. The war in Iraq is at best a distraction from
that core issue, at worst may aggravate it. Jordan's Queen Rania spoke
of the "desperate search for hope".

- Serious Islamic leaders (e.g. the King of Jordan, the Prime
Minster of Malaysia, the Grand Mufti of Bosnia) believe that the Islamic
world must recapture the glory days of 12-13th C Islam. That means
finding tolerance and building great education institutions and places
of learning. The King was passionate on the subject. It also means
freedom of movement and speech within and among the Islamic nations.
And, most importantly to the WEF, it means flourishing free trade and
support for entrepeneurs with minimal state regulation. (However, there
were also several Middle East respresentatives who argued precisely the
opposite. They believe bringing down Saddam Hussein and then pushing the
Israel/Palestine issue could actually result in a Golden Age for Arab
Islam.)

- US unilateralism is seen as arrogant, bullyish. If the U.S.
cannot behave in partnership with its allies -- especially the Europeans
-- it risks not only political alliance but BUSINESS, as well. Company
leaders argued that they would rather not have to deal with US
government attitudes about all sorts of multilateral treaties (climate
change, intellectual property, rights of children, etc.) -- it's easier
to just do business in countries whose governments agree with yours. And
it's cheaper, in the long run, because the regulatory envornments match.
War against Iraq is seen as just another example of the unilateralism.

- For a minority of the participants there was another layer of
AntiAmericanism that focused on moralisms and religion. I often heard
delegates complain that the US "opposes the rights of children", because
we block all treaties and UN efforts that would support sex education
and condom access for children and teens. They spoke of sex education as
a "right". Similarly, there was a decidedly mixed feeling about
Ashcroft, who addressed the conference. I attended a small lunch with
Ashcroft, and observed Ralph Reed and other prominent Christian
fundamentalists working the room and bowing their heads before eating.
The rest of the world's elite finds this American Christian behavior at
least as uncomfortable as it does Moslem or Hindu fundamentalist
behavior. They find it awkward every time a US representative refers to
"faith-based" programs. It's different from how it makes non-Christian
Americans feel -- these folks experience it as downright embarrassing.

- When Colin Powell gave the speech of his life, trying to win
over the nonAmerican delegates, the sharpest attack on his comments came
not from Amnesty International or some Islamic representative -- it came
from the head of the largest bank in the Netherlands!

I learned that the only economy about which there is much enthusiasm is
China, which was responsible for 77% of the global GDP growth in 2002.
But the honcho of the Bank of China, Zhu Min, said that fantastic growth
could slow to a crawl if China cannot solve its rural/urban problem.
Currently 400 million Chinese are urbanites, and their average income is
16 times that of the 900 million rural residents. Zhu argued China must
urbanize nearly a billion people in ten years!

I learned that the US economy is the primary drag on the global economy,
and only a handful of nations have sufficient internal growth to thrive
when the US is stagnating.

The WEF was overwhelmed by talk of security, with fears of terrorism,
computer and copyright theft, assassination and global instability
dominating almost every discussion.

I learned from American security and military speakers that, "We need
to attack Iraq not to punish it for what it might have, but
preemptively, as part of a global war. Iraq is just one piece of a
campaign that will last years, taking out states, cleansing the planet."

The mood was very grim. Almost no parties, little fun. If it hadn't been
for the South Africans -- party animals every one of them -- I'd never
have danced. Thankfully, the South Africans staged a helluva party, with
Jimmy Dludlu's band rocking until 3am and Stellenbosch wines pouring
freely, glass after glass after glass....

These WEF folks are freaked out. They see very bad economics ahead, war,
and more terrorism. About 10% of the sessions were about terrorism, and
it's heavy stuff. One session costed out what another 9/11-type attack
would do to global markets, predicting a far, far worse impact due to
the "second hit" effect -- a second hit that would prove all the world's
post-9/11 security efforts had failed. Another costed out in detail what
this, or that, war scenario
Would do to spot oil prices. Russian speakers argued that "failed
nations" were spawning terrorists --- code for saying, "we hate
Chechnya". Entire sessions were devoted to arguing which poses the
greater asymmetric threat: nuclear, chemical or biological weapons.

Finally, who are these guys? I actually enjoyed a lot of my
conversations, and found many of the leaders and rich quite charming and
remarkably candid. Some dressed elegantly, no matter how bitter cold and
snowy it was, but most seemed quite happy in ski clothes or casual
attire. Women wearing pants was perfectly acceptable, and the elite is
sufficiently
Multicultural that even the suit and tie lacks a sense of dominance.
Watching Bill Clinton address the conference while sitting in the hotel
room of the President of Mozambique -- we were viewing it on closed
circuit TV -- I got juicy blow-by-blow analysis of US foreign policy
from a remarkably candid head of state. A day spent with Bill Gates
turned out to be fascinating and fun. I found the CEO of Heinekin
hilarious, and George Soros proved quite earnest about confronting AIDS.
Vicente Fox -- who I had breakfast with -- proved sexy and smart like a
--- well, a fox. David Stern (Chair of the NBA) ran up and gave me a
hug.

The world isn't run by a clever cabal. It's run by about 5,000
bickering, sometimes charming, usually arrogant, mostly male people who
are accustomed to living in either phenomenal wealth, or great personal
power. A few have both. Many of them turn out to be remarkably naive --
especially about science and technology. All of them are financially
wise, though their ranks have thinned due to unwise tech-stock
investing. They pay close heed to politics, though most would be happy
if the global political system behaved far more rationally -- better for
the bottom line. They work very hard, attending sessions from dawn to
nearly midnight, but expect the standards of intelligence and analysis
to be the best available in the entire world. They are impatient. They
have a hard time reconciling long term issues (global wearming, AIDS
pandemic, resource scarcity) with their daily bottomline foci. They are
comfortable working across languages, cultures and gender, though white
caucasian males still outnumber all other categories. They adore hi-tech
gadgets and are glued to their cell phones.

Welcome to Earth: meet the leaders.

Ciao,
Laurie

Daily Rotten will keep you posted as events warrant.