*{DEFINING AND ADVANCING THE GLOBAL AGENDA: THE ROLE OF THE WORLD ECONOMIC FORUM [http://www.weforum.org/pdf/AnnualMeeting/AMreport2001.pdf]

BY KLAUS SCHWAB

This commentary was contributed to the Straits Times prior to the Annual Meeting 2001.}

Three years ago, when a number of businesses based in Bangkok failed to meet their loan repayments the pain was felt not only in Jakarta, Hong Kong and Seoul, but also in New York, Moscow and Frankfurt. At the level of individual workers – where the global economy meets daily reality – jobs were lost by people for whom Thailand was previously just a dateline on the evening news.

In the modern world we have become interconnected in ways we could never have anticipated or imagined. And today, as perhaps never before, there is a common global agenda that requires integrated problem-solving and forward-looking management by all stakeholders in the world economy.

High on this agenda is, of course, the debate about the benefits of globalization itself. Does globalization benefit the few or the many? My assessment, based on 30 years of close involvement with the rhythm and flow of globalization, is that the benefits of this globalized world do, in fact, benefit “the many.” But at the same time, we must do more to bring these benefits to those who have been left behind or left out of the dynamic and growing global economy.

The pros and cons of globalization will be discussed in some detail at the World Economic Forum’s Annual Meeting in Davos this week. In my view, powerful economic forces have driven and will continue to drive the globalization process. But the real issue, I believe, is how the global economy – and its key stakeholder groups – will manage the “downsides” of this process. Will we find ways to work together to maximize the benefits of globalization while mitigating its negative consequences, or will we act unilaterally and allow the victims of globalization to pay the price for the prosperity and progress of others?

Clearly, we must improve the opportunities for growth in the developing world so citizens in Africa, Latin America and elsewhere will have a chance to replicate the successes of the most dynamic economies in Asia. Most economists would agree that to do this we must lower the barriers that limit trade. But multinational corporations also have a critically important role to play. They must adopt a new role as global citizens and assume the responsibilities that role entails. International expansion must mean more than just new factories in new time zones.

This emerging sense of corporate responsibility must also include adoption of clearly defined standards on the environment, and on labour practices. A sustainable environment and fair labour practices are in the interests of investor-businesses and host nations – indeed, of people everywhere.

Security and peacekeeping also play a critical role in the development of an integrated global economy. While the business community would seem to have no direct role in security matters, business does have an important part to play in post-conflict economic development. International investors can bring jobs and stability, and provide the capital to facilitate reconstruction.

The business community can also help developing nations overcome economic disadvantages by sharing information technology and modern advances in science and engineering. Much of Africa and parts of Latin America, the Caribbean, and Asia missed the industrial revolution and have struggled for decades to raise living standards. The global economy cannot afford to allow these nations to miss the IT revolution as well.

Another important item on the global agenda is the issue of health and nutrition, and here again, the business community plays a significant role. By introducing and maintaining basic health and nutritional standards for workers, investor-companies serve their own business interests and improve the quality of life in host nations.

The work of promoting a common understanding on the issue of human rights is essential if future conflicts between and among nations are to be avoided. Democracy too is almost a prerequisite for sustained economic growth and development, and the dissemination of democratic principles remains a key challenge for the international community and a major item on the global agenda.

And finally, the world as a whole must find new ways to safeguard cultural identity in an increasingly homogenized world. farmers in France produce hundreds of kinds of cheese. In a globalized future, would the French – or any of us – be happy if international conglomerates reduced that number to four, or five? If globalization is to succeed we will need to find new ways to assign value to the currently intangible elements that define “quality of life” for people around the world.

Do we have the necessary infrastructure to deal with these complex global issues? I would suggest we do not. In today’s world, the sources of power are much more decentralized and disaggregated. Private capital, community organizations and individuals empowered by the Internet now have the ability to instantly impact public opinion and breaking news around the world.

Who then is the trustee of the global agenda? International organizations like the United Nations have waged a noble battle to unify global concerns, but they are limited by the fact that they are state-based and lack representation from civil and commercial society. States themselves also have limited power in this postmillennial era. While they are still the dominant players in matters of international security, they are largely “pulse-takers” when it comes to the flow of foreign direct investment.

Similarly business, while a powerful driver of innovation and investment, has traditionally lacked a common platform and the sense of cohesion necessary to constructively address complex international issues. Yet if harnessed properly, multinational corporations have the ability to significantly impact the major items on the global agenda: growth, social and environmental sustainability, economic disparities, health, human rights, cultural identity and world peace.

Civil society is now also an international player. Greenpeace and the World Wildlife Fund take a global view of the environment. Labour movements in the developed world are concerned with conditions for workers worldwide which, down the line, can affect the way consumers feel about a particular brand of sneakers or a line of clothing. Yet civil society often struggles to find its “place at the table” and to be treated as an equal partner in the global dialogue. 

So how can the issues and the players be brought together to develop an integrated approach to the global agenda?

This is where institutions like the World Economic Forum can make an important contribution. By bringing together the key players in the international economy – business leaders, government leaders and representatives of civil society – the Forum is able to address the major issues on the global agenda in a collaborative and creative way. We believe that only by facilitating dialogue and discussion about the difficult issues confronting humankind can we hope to define a global agenda that reflects the real needs and aspirations of all of the people on this planet. And we believe that only by working cooperatively to advance this agenda can we create a global economy where development benefits both the “haves” and the “have-nots.”

We are living in a new era, with new challenges. Only by working together can we improve the state of the world.