New Engineer: The World Economic Forum

Citation: This article was published as Sharon Beder, 'Economic Development "with a human face"', Engineers Australia, October 2000, p. 39.

This is a final version submitted for publication. Minor editorial changes may have subsequently been made.

When the World Economic Forum (WEF) held its 2000 Asia-Pacific Summit in Melbourne in September thousands of people protested. These people had concerns about globalisation, which the WEF promotes, but also about the anti-democratic nature of meetings such as this, where business people and politicians get together to decide the future of the world.

The WEF is a private club of top level business people who periodically to network, have private discussions, share information and ideas, form alliances, and influence policy-makers. They also meet to set the economic and political agenda worldwide. The WEF claims, on its home page, that its annual meeting in the Swiss ski resort of Davos "is now considered the global summit which defines the political, economic and business agenda for the year."

The WEF derives its political influence from the financial power of its members. It exercises this influence through bringing the world’s top business people and policy makers together at its meetings. Lord Mayor of Melbourne, Peter Costigan, argues that "The most accurate description of its nature is that it is the world’s most significant talkfest, with more economic and social influence than the United Nations and International Monetary Fund combined."

The WEF has a thousand foundation members, who are CEOs of the world’s largest corporations. Membership is by invitation only and is restricted to corporations that have over $1billion in sales and banks that control over $1billion in capital. Membership costs thousands of dollars and attendance at the Davos meeting is another $20,000.

The CEOs of twenty one Australian organisations are members, including BHP, John Fairfax Holdings, Lend Lease, National Australia Bank, Publishing and Broadcasting (PBL), Telstra and WMC. The September meeting of the WEF was organised in conjunction with the Business Council of Australia, which represents many large corporations operating in Australia.

Government leaders are invited to WEF meetings enabling business leaders to have high level access to government ministers, prime ministers and presidents. The WEF claims to be the "leading interface for business/government interaction". The WEF also claims to have had considerable influence in promoting the free trade agenda globally. For example, it was responsible for the launch of the Uruguay Round of GATT talks in 1982 which led to the formation of the World Trade Organisation (see Probe January 2000).

The WEF claims on its web pages: "Over the past 27 years, the World Economic Forum has evolved into a major force for economic integration at the corporate as well as the national economic levels. It has played a key role in identifying new trends in the economic, political, social and cultural domains, and in shaping strategies and actions for corporations and countries to integrate these changes and maximize their potentials."

While continuing to promote free trade and globalisation the WEF has become aware of the rising public opposition to it and so it now stresses the need for economic development "with a human face", not because members are concerned about the plight of the poor and dispossessed but because the political instability that might arise is bad for business. Klaus Schwab, who has presided over the WEF through the decades, has claimed that the lack of social cohesion produced by community opposition to globalisation and corporate activities creates vulnerabilities for the corporate sector.

Those attending the Davos meeting in February 2000, "agreed that globalisation has an image problem". The WEF wants to ensure that "the concerns and questions of an anxious public" are answered convincingly. Those concerns come from people in affluent countries who are concerned that free trade and economic rationalism is destroying the social system and imposing a dog-eat-dog market system in its place; people in Asia who are bitter about the impacts of a financial crisis which they blame on the workings of the financial markets; and people in Latin America who believe that market economic systems concentrate wealth and increase mass poverty.

Protestors in Melbourne were not just protesting free trade and globalisation, however, but also the undemocratic influence on political decision-making that such meetings facilitate. Protestors accuse the WEF of being an elite club that subverts democracy by holding meetings and discussions that the public has no access to but which are highly influential in setting the global agenda and promoting globalisation.