- Last Updated: January 28. 2009 12:30AM UAE / January 27. 2009 8:30PM GMT
Staff adjust a logo in the Congress Centre ahead of the World Economic Forum in Davos. Denis Balibouse / Reuters
DAVOS, SWITZERLAND // Government and business titans from the UAE join record numbers of their global counterparts in the exclusive Alpine retreat of Davos this morning to address the world’s worst economic crisis in decades.
Delegates from the Emirates such as Mohammed Abdullah al Gargawi, Minister of Cabinet Affairs and the chairman of Dubai Holding, feature on a VIP participant list that includes the Russian prime minister, Vladimir Putin, and the Chinese premier, Wen Jiabao.
The first annual World Economic Forum (WEF) meeting since global markets plunged into financial meltdown will see more than 40 heads of state and government brush shoulders with banking and business chiefs in the charming Swiss ski resort.
More than 2,500 participants from 96 countries are congregating under the gloomy banner of “Shaping the Post-Crisis World” in a forum that was characterised in previous years by laissez-faire capitalists sipping champagne at fancy receptions.
This year’s event will see the marked absence of bankers from Lehman Brothers and other victims of what some analysts describe as the worst economic crisis since the Great Depression of the 1930s.
They have been replaced, by and large, with politicians such as the British prime minister, Gordon Brown, and Sheikha Lubna Al Qasimi, Minister of Foreign Trade, echoing a power shift away from the free market as governments struggle to bail out sinking economies.
Sessions bearing titles such as “What Went Wrong?”, “Hard Lessons about Global Imbalances” and “No Way Back” set a sombre tone for a forum that Klaus Schwab, its founder and chairman, hopes will challenge the “self indulgence” of recent years.
“The pendulum has swung and power has moved back to governments,” said Mr Schwab, the German-born economics professor who founded the forum in 1971 and has been its impresario ever since. “This is the biggest economic crisis since Davos began.”
The WEF, set up as a business and academic think-tank with the motto “entrepreneurship in the global public interest”, has snowballed into a huge event for its coterie of A-list invitees, while drawing ire from anti-capitalist activists.
This year, however, ethically aware celebrities who captured the limelight in previous years such as the actress, Angelina Jolie, and the U2 front-man, Bono, have not made their annual pilgrimage.
The spotlight now shines on government and business chiefs as they debate reforming the world’s financial architecture and relaunching the global economy in advance of a Group of 20 summit of leading and emerging economies in April, and a meeting in July of the Group of 8 leading industrialised nations plus Russia.
More than a dozen trade ministers will meet on the sidelines of the five-day Davos forum to discuss the long-running Doha-round talks to open up commerce, bolster international co-operation and ward off protectionism.
Delegates from the UAE – expected to include the chairman of Dubai World, Sultan Ahmed bin Sulayem, and Mohamed Ali Alabbar, his counterpart at the property developer, Emaar – will advance the nation’s business interests in response to financial uncertainties back home.
Economic boom in the Emirates, the world’s fifth-largest oil exporter, came to an end late last year as crude prices collapsed by more than US$100 a barrel, regional credit markets froze and Dubai’s previously spectacular building boom started to unravel.
The recent announcements of layoffs by Istithmar World, the investment arm of Dubai World, and the property developer, Nakheel, ended all doubt that the Emirates could remain immune to a wide-reaching global economic slump.
For Eckart Woertz, the economic programme manager at the Dubai-based Gulf Research Center, Davos provides UAE executives with an opportunity to strike deals and showcase themselves as “role-model Arab” businesspeople to a global audience.
“It’s a place to be seen and a place to network – a very typical UAE thing to do,” said Mr Woertz, the author of a report on the impact of the financial crisis on Gulf economies. “In the UAE, they are dependent on attracting business from the people showing up there, particularly businesses from Dubai.”
A session on Friday will see Abdulaziz al Ghurair, the Federal National Council speaker, join regional finance chiefs in debating “The Gulf’s New Economic Agenda” and examine how petrodollar reserves can bolster floundering economies.
For Vladimir Kvint, the economist and author of The Global Emerging Market: Strategic Management and Economics, this year’s forum represents a “new global economic paradigm” in which emerging markets in places such as the Gulf and China will challenge the West’s financial hegemony.
“If businesspeople from the UAE want to interact with decision makers, develop contacts and get an understanding of where the world is going, Davos is a good place to go,” Mr Kvint told The National.
The forum will also see the Arab League secretary general, Amr Moussa, and others tackle an economic slump across the wider Middle East, only weeks after delegates to Kuwait’s finance summit estimated Arab losses already amounted to $2.5 trillion (Dh9.18tn).
The value of Arab overseas investments, estimated at close to $2.5tn, have dropped by about 40 per cent in the current financial crisis, while Arab stock markets haemorrhaged $600 billion of their capitalisation last year, according to the league.
The wealth gap between rich and poor is also growing, experts say, with Qatar’s per capita income of $72,300 being 80 times higher than the $900 in Yemen, respectively the richest and poorest Arab nations.