Until Next Year

It's probably a stretch to use fashion as a metaphor for events in Davos. But what decision-makers and power-brokers wore-and didn't wear-might function as one indicator of the mood at a meeting that ended with ski races and funicular rides in the Swiss resort town yesterday.

What organizers didn't want participants to wear this year were ties. The idea, they said, was to create a less formal, roll-up-your-sleeves-and-get-to-work atmosphere A large TIES FORBIDDEN sign greeted participants at the entrance to the congress center; men who violated it were told they had to contribute five Swiss francs (a little more than $4) to UNICEF. Many, including WEF founder CEO Klaus Schwab, found it too hard to appear without their corporate armor-and paid some 10,000 francs (more than $8,000) as a result.

Others tried to get into the spirit of things. Some self-consciously appeared in casual weekend gear; others just kept the suits but wore open-necked shirts. The result was a curious melange of styles that were as varied as the threads of this year's meeting.

As expected, there was no single dominant theme in Davos 2004. Unlike last year, when the threat of war in Iraq dominated discussion and pitted Americans against non-Americans, this year's meeting sprawled out to cover myriad themes. Indeed, there was not even unanimity over what should top the global agenda for the year ahead. Top U.S. administration officials, including Vice President Dick Cheney and Attorney General John Ashcroft, made it clear that their priority was the war on terror--and winning allies to help fight it. Others, especially Europeans, complained that this was an American obsession and that it was time to move on to other issues.

For those more interested in business than politics, there was plenty of substance. Overall, the mood on the global economy was fairly upbeat, in spite of worries that the upturn may not survive past the U.S. election--when the jolt of electricity from tax cuts and fiscal spending will end. The meeting's first session on the economy set the tone for the week by highlighting the two opposing views. Merrill Lynch International chairman Jacob Frankel argued that we're entering a "synchronized global recovery led by the United States." Morgan Stanley global economist Stephen Roach shot him down with worries about the imbalances of the current account deficit and his belief that the U.S. economy is "running on fumes."

For companies, the good times seemed to depend on which market or industry they represented. John Tyson, CEO of Tyson Foods, saw momentum building as people started to travel again and companies could consider raising prices after a stagnant two to three years. But as Ian Davis of McKinsey & Co. noted, half of the CEOs in Davos boasted of full order books, while the rest were asking: just who is getting all this recovery? "I personally think we're in a very strong recovery around the world, but it is polarized," said Davis. Europe, despite the historic enlargement that will bring 10 new countries into the European Union this year, seemed to be largely off the radar screen as conversations focused on whether the United States will again be an engine of global growth, whether the dollar might tumble another 20 percent, and whether China might be overheating.

European politics also drew little attention as political debates centered on the Middle East, nuclear proliferation and the quest to develop democracies in the Muslim world. Pakistan's President Pervez Musharraf; Iran's President Mohammad Khatami and Turkey's Prime Minister Recep Tayyip Erdogan were strong drawcards, and each brought a positive geopolitical message. In Musharraf's case, it was the move toward peace between India and Pakistan. For Erdogan, there was a meeting with U.N. Secretary General Kofi Annan about resolving the Greek-Turkish dispute over Cyprus (and a reward for Turkey's pro-Washington stance in the form of U.S. Vice President Dick Cheney's strong endorsement of Ankara's efforts to join the European Union). Khatami's message was somewhat more complex. While the Bush administration likes to argue that Iran's recent signing of a protocol allowing the International Atomic Energy Agency (IAEA) to make snap inspections was because of the threat of U.S. force, Europe believes that it was the careful diplomacy of Britain, Germany and France that led to Tehran's decision last month. But whatever one's views over the carrot or stick approach, Khatami's decision was universally praised. Perhaps more significant were the Iranian president's hints that he seemed to be ready for dialogue with the United States. "My impressions of Musharraf and Khatami were very positive," Mahnaz Ispahani, a senior fellow at the U.S. Council on Foreign Relations, told NEWSWEEK. "I hope that this coming year we will really focus on the Indian-Pakistan rapprochement, because this is so linked to the problem of terrorism."

Outside of the debates, Davos also offered up its usual quota of networking, unpublicized bilateral meetings and a round of parties so endless that participants needed full PDA power to monitor where they were supposed to be when--and how to get there on time in the face of a shuttle bus shortage, airport-style security and traffic jams that brought the Promenade to a standstill. The mood was lighter too. Saturday night's traditional soiree, downscaled last year in a nod to the gloomy political and economic climate, was back last week--complete with (penalty-free) black tie. It was an elaborate evening of magic shows, music, henna tattoos and a vibrant celebration of South Africa's first decade of democracy. But while many men seemed happy to don their tuxes, it was the women's turn for sartorial uncertainty. Should they wear the glamorous ball gowns of the '90s? Sedate suits? Business casual? The final result was another melange of outfits without any overriding theme. Fashion may be frivolous, but even in Davos it can make a point.