Getting Serious

On Saturday, peaceful Switzerland bared its teeth. In the biggest security alert the Alpine nation has ever seen, riot police sealed off all approaches to Davos, the genteel ski resort that hosts the annual network-athon of CEOs, heads of state and other VIPs known as the World Economic Forum. Anticapitalist activists, including militant anarchists, had promised via the Internet to "wipe out" the meeting. The authorities took them seriously. Declaring any demonstration illegal, they transformed placid Davos into an armed camp, turning back hundreds of would-be protesters at Swiss borders. Some of those stranded in Zurich set fire to cars there, prompting police to respond with tear gas and rubber pellets. Even the 200 demonstrators who somehow made it to Davos didn't get very far. When they came within a kilometer of the forum, riot police opened fire with water cannons. Drenched, the crowd didn't linger long.

Some 6,700 miles away, a much larger group of protesters gathered in southern Brazil for a formal anti-Davos gathering, dubbed the World Social Forum. In Porto Alegre, 10,000 delegates and spectators attended lectures and workshops on the evils of globalization and how to bridge the growing chasm between rich and poor. The forum was more peaceful than angry, with protesters lugging backpacks and sleeping bags, handing out pamphlets and arguing about socialism. Just to the north, 18 busloads of demonstrators stormed a farm owned by the American giant Monsanto to protest the company's experimentation with genetically modified foods. They camped out in the fields and, before a bank of TV cameras, ripped soybeans out of the ground. French activist Jose Bove (following story), in town for the gathering, proclaimed the act "one more blow in the urgent fight against multinational corporations."

Neither protest was in danger of becoming "another Seattle." But the Brazilian outcry shows not only that resentment of "the global economy" is growing but that it has gained new outposts. Indeed, the world has changed dramatically since the World Trade Organization's Seattle summit at the end of 1999. Back then the gurus of globalization were preaching their mantra of free trade, free markets and ever larger corporate mergers. Soaring markets seemed to prove them right; there was much talk of permanent, painless growth.

But the collapse of the WTO talks in Seattle amid violent protests showed things weren't so simple. Then came the Nasdaq crash, followed by the slowdown of the U.S. economy. Countries all over the world worried that the downturn in the world's largest economy would soon spread. Crises like Kosovo and Chechnya--combined with more fears of global warming and Europe's mad-cow-disease panic--only exacerbated the sinking feeling that the markets couldn't solve it all. How much the protests contributed to the changes is debatable, but the world has a very different agenda today.

There are few places where this shifting ground is more apparent than Davos. A few years ago, alpha executives compared the size of their mergers. This year, under the conference title "Bridging the Digital Divide," those same leaders are discussing problems like poverty, disease and climate change. At the opening plenary last Thursday, ministers from Brazil, India and Thailand gave 600 VIPs an earful on the industrialized world's sins: from agricultural subsidies that hurt poor farmers to IMF diktats that dry up badly needed credit. Forum organizer Klaus Schwab says he wants the power elite to spend more time thinking about how to improve the state of the world. "Business has to make a special effort to establish a world where everybody can live a dignified existence," he told the delegates last week.

Schwab's ambition is noble. But when 1,000 CEOs worry about the state of the world, they're going to think about the state of their businesses first. Topic A, therefore, was what Federal Reserve chairman Alan Greenspan last week called the "very dramatic slowdown" in the American economy. "Everyone gets hurt when the 800-pound gorilla on the block slows down," warned Princeton economist Alan Blinder. Already, American imports from the rest of the world have dropped far below their highs last fall, threatening to spread the slowdown. At Davos on Saturday, IMF deputy chief Stanley Fisher reduced his estimate for global growth this year, from 4.2 to 3.5 percent. In the real world that could mean many millions of jobs lost globally.

There were plenty of nongovernmental organizations on hand to help keep the forum on message. The Geneva-based World Wildlife Fund was one of a growing number that accepted invitations to work inside the Davos meeting to lobby for their cause. "Some of the protesters outside are demonstrating for very good reasons, but to my mind it's much more effective to work within," said WWF chairman Claude Martin, a first-time attendee. At a workshop on climate change, Martin and other environmentalists met with executives from British Petroleum and other fossil-fuel producers to hammer out a common agenda against global warming. Philip Jennings, head of the Switzerland-based Union Network International, sent many of his rank and file to Seattle in 1999 to protest the WTO. But in Davos he's inside, lobbying for labor standards and networking with other NGOs.

Skeptics say Davos's uplifting speeches may mollify the public, but that the same old corporate dealmaking still goes on behind closed doors. "Right now I'm just a token voice giving an alternative view on a panel full of CEOs," says Martin Khor, head of the Third World Network, a developing-world lobby based in Malaysia. "They'll say one thing here and then go home and lobby for the opposite." Still, Davos is starting to produce more than soaring rhetoric. This year the organizers launched two new indices to monitor countries' records on corruption and the environment.The health minister of Rwanda announced last week that his country had clinched a deal with Western pharmaceutical companies to get discounted AIDS drugs. And one of the most noticeable developments at Davos is the growing spotlight on philanthropy. This year, Bill Gates--who donated $750 million for a child-vaccination program last year--gave another $100 million for research on an AIDS vaccine.

Still, Davos's critics are not so easily won over. Third World Network's Khor believes issues like trade and financial markets are too important to be discussed in a closed corporate club. "For people in the developing world, decisions made here can mean life or death, not just whether there'll be a hard or soft landing," he says. "These negotiations should take place in a public institution like the U.N." Peter Bosshard, an activist who helped organize a counterconference in Davos last week, says WEF members include some of the world's worst corporate offenders when it comes to supporting military regimes or suppressing indigenous people. One of the masked militants who made it to Davos put it more bluntly: "The people at the WEF are capitalists, and I hate capitalism."

Opponents like that make tough negotiating partners. But despite the water cannons, they're not going away. In the end, it may be more constructive for the decision makers and their critics--in Davos and elsewhere--to sit down and try to hammer out an agenda both sides can live with. The sooner they getto work, the better.