Attendees at the 2012 World Economic Forum in Davos primarily discussed the future of capitalism and a coming “great transformation.” Guests at Viktor Pinchuk’s “Ukrainian dinner” were told, unconvincingly, that Kyiv is on the right track.
Every year in late January, many if not all of mankind’s problems are supposed to be easily settled in the Swiss resort town of Davos. What else should be expected of 2,600 delegates from across the world, including 40 heads of state, 18 governors of national banks, 69 billionaires and others – entrepreneurs, financiers, CEOs, scientists, officials and observers?
This year, protestors calling themselves "Occupy Davos" built igloos and erected a banner that read: “Don’t let them decide for you!” Of course, a different slogan may have been more appropriate, because no official decisions are normally taken in Davos. Still, though the forum is not geared toward any official policy, observers believe it sets the tone for the world economy for the entire year. This year's 42nd gathering was preceded by more gloomy news from the International Monetary Fund, which worsened its forecast for the world economy in 2012. Not surprisingly, the participants primarily talked about the future of capitalism without delving into specifics.
“THE TRAITORS OF THE PRIVILEGED CLASS” ARE TOO FEW
This time Klaus Schwab, founder of the annual World Economic Forum in Davos, called on his guests to consider a “great transformation” that would affect the deepest foundations of capitalism. Many participants agreed: the convulsions of the global economy since the 2007-2008 crisis have revealed that the problems are systemic. But Davos confirmed that every leader is, in fact, under the pressure of today’s rather than tomorrow's problems.
German chancellor Angela Merkel, who delivered the opening address at the forum, naturally focused on the crisis of the common European currency. She emphasized that Europe needed to become “more European,” i.e., EU structures should be consolidated in the name of overcoming the crisis. Her pleas to countries to maintain financial discipline were met with a new wave of criticism.
American financier and billionaire George Soros accused Germany of essentially demanding from its economically weaker EU partners to pay off debts in “foreign currency.” German’s desire to maintain the euro as de facto the former German mark threatens the euro zone with deflation and economic downfall, he said. Soros can afford sharp criticism. He proudly calls himself the “traitor of his class,” because he says that the rich in most countries of the world pay too little in taxes. Soros also noted in an interview prior to the forum that the income gap in the USA is too large and has widened dramatically in the past 25 years of economic growth; as a result, the condition of the middle class did not really improve over this period.
Bank of England Governor Mervin King also said at the forum that such sentiments are widespread and emphasized that it was unfair that rich bankers largely caused the destructive first wave of the global financial crisis, but the price was paid by the masses of ordinary taxpayers.
Just a handful of regular Davos participants set personal examples for billionaires to follow. One of them is Bill Gates, who donates his billions to healthcare, education and fighting poverty in the poorest countries of the world. Few people dare completely deny that the main slogans of the Occupy Davos movement, which castigates the rule of the privileged 1% of the population, are true.
Most participants pay around USD 20,000 for their ticket to the forum which enables them to listen to a lecture or two but chiefly gives them an almost unique opportunity to make personal acquaintances and build connections.
Those who listened to the lectures heard from the IMF Managing Director Christine Lagarde that concerns were not simply about the crisis of the eurozone; she noted that the crisis could spill over to the rest of world. She said that the IMF saw a serious of forecasts and calculations according to which no country could afford to stand aside and it was in the interests of everyone to put an end to this crisis.
However, many guests gave the impression that they were tired of hearing about European problems, which had been making headlines for several months running, and most seemed to feel that old Europe, as always, will somehow get by even if it does not solve all of its problems.
The participants were told to seek more optimism at events where the prospects of China, India and other exotic countries were discussed. In particular, Azerbaijan, which is an exotic country to many, did not betray in any way that it reduced its oil production in the past year. The guests who attended Azerbaijani events, where the wife of President Ilham Aliyev played an active part, received souvenir packages complete with miniature carpets.
A PODIUM FOR VIKTOR YANUKOVYCH
There is virtually no point for political leaders to attend the Davos Forum unless they are scheduled to meet important people or speak before serious audiences and make programmatic statements or offer new ideas. Evidently, this is what the Presidential Administration in Kyiv thought, because it dared take Yanukovych to Switzerland, clearly hoping for high-profile meetings that would boost his image. At the same time, the PACE was considering a tough resolution on Ukraine. But Bankova Street once again overestimated its capabilities and underestimated the West. The Ukrainian leader listened to the discussion of energy issues at the World Economic Forum and had several brief encounters, particularly with the presidents of Azerbaijan and Poland. And nothing more.
The rostrum, or rather podium, for the president in Davos was once again secured by Ukrainian billionaire Viktor Pinchuk. However, Yanukovych seemed to barely even get a taste of the canapés, borshch and cherry varenyky that nearly 300 guests were treated to at Morosani Hotel.
Yanukovych had a chance to declare his “view on the future” of Ukraine. However, many guests were more concerned about current Ukrainian reality. Earlier, during the Ukrainian Dinner sponsored by Pinchuk’s foundation, one guest wondered out loud: “I am curious to know whether anyone will dare mention Yuliya Tymoshenko.” But the question of her imprisonment was raised almost immediately and remained on the agenda until the end of the event.
Ex-President Alexander Kwasniewski of Poland, whom Pinchuk has consistently invited to moderate his recent projects, began dinner talking directly to Yanukovych who was the honored guest at the event. The Ukrainian president gave an extended answer to his initial question about the future of Ukraine. He complained, among other things, of the high price that Kyiv has to pay for Russian gas and called it “punishment” and “a threat to national security.” He also said that “equal conditions are being created” for all Ukrainian parties to participate in the next election. At this juncture, after emphasizing the need to develop the economy and strategic relations with Russia, Ukrainian presidents traditionally mention Ukraine's European aspirations. But this year, this is where Kwasniewski saw an opportunity to talk about Tymoshenko. “If Ukraine wants to rise to European standards, it should be emphasized that according to European standards, a prime minister should not be criminally persecuted for political decisions taken in office. Even if the decisions were wrong!” he said.
Yanukovych grabbed the opportunity to show his surprisingly deep knowledge of Ukrainian laws and agreed that the Tymoshenko case is “controversial.” (Compared to his recent statements about the case, these words were little short of a sensation.) He mentioned the articles that contradict European norms. “And these articles have been there since Khrushchev,” Kwasniewski said as he unexpectedly pressed on with the topic.
Yanukovych agreed but went into a long explanation, saying that there is a problem with laws under which Tymoshenko was imprisoned, but the investigation into other “crimes that were previously not investigated” is continuing.
“Mister Yanukovych! Stop this chaos in the country! Release Yulia Tymoshenko! You have the necessary leverage!” Arseniy Yatseniuk said as he theatrically appealed to the president. But Yanukovych was already gone from the hall and did not hear one of the few phrases that brought applause from the audience. Most attendees realized that the Tymoshenko case indicates the discrepancy between the Ukrainian government’s actions and slogans.
“The Yulia Tymoshenko case is just one of the numerous bad examples,” Swedish Foreign Minister Carl Bildt said from the rostrum. He spoke about problems with Soviet laws in a capitalist system and even “the degradation of the existing justice system in Ukraine.”
There was no one in Davos to defend the Ukrainian authorities. Vladyslav Kaskiv, Head of the State Agency for Investments and Management of National Projects, spoke about plans to build “the world’s most liberal economy” in Ukraine, but his assertions that the forthcoming election will be fair were not convincing. In contrast, Bildt hastened to note that it will be impossible to build a liberal economy in a politically non-liberal country. He also emphasized that the parliamentary election will be a decisive test for the Ukrainian authorities. If it is not fair and honest and Ukraine does not return to the path of European integration, there is a threat that it will stay on its downward trajectory, he added.
Encouraging comments from the Turkish Minister for European Affairs, who said that his country also went through all kinds of hardships, drowned in a chorus of voices expressing concern over the way the political situation is developing in Ukraine. Turkey, which has been “approaching” the EU for nearly 50 years now, is hardly the best example for Ukrainians to follow.
In a recent poll, Razumkov Center, a sociology group, has found that 73% of Ukrainians fully or partly agree with the statement that political parties which spend a long time in power always have tainted reputation. So they only believe new political forces and their leaders