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Well-guarded elite ponders world's division

By William Drozdiak
Wednesday, January 31, 2001; 12:00 AM

DAVOS, Switzerland, Jan. 30 -- -- For the past six days, the world's political, academic and business luminaries who gathered in this Swiss mountain resort struggled -- between bites of lobster tail and sips of Louis Roederer champagne -- to comprehend the reasons behind growing populist backlash against globalization.

At seminars and panel discussions held in a fortress-like conference center surrounded by armed guards and barbed wire, they were confronted by a staccato burst of statistics depicting the monstrous inequalities of our age: that more than a billion people live on less than $1 a day, that half of humanity has never made or received a phone call and that Manhattan has more Internet connections than all of Africa.

But as they descended today from the snowy alpine peaks, there was an air of disappointment among many of the 2,000 participants who were brought together by the World Economic Forum to ponder how to "Bridge the Divides."

"When people talk about globalization, what we see is a world that is divided into two," said Thabo Mbeki, South Africa's president. "There is a structural fault of poverty: on one side, there are the powerful and the wealthy, and on the other side, there are the powerless and the poor."

The exhilarating promises of globalization -- of new technologies, the elevation of living standards through free trade and the global web of mutual interests that was supposed to render wars obsolete -- have given way to fresh suspicions about the need to shatter traditions and break down the last barriers to the flow of capital, people and ideas.

Given the growing hostility to globalization, Mexico's new reformist president, Vicente Fox, said the world's industrial democracies need to acknowledge that the present methods of reaching out to the illiterate and the impoverished are simply not working. Instead of bridging the divide, he said, the chasm between rich and poor is only getting worse.

"Attempts to sugarcoat the present form of globalization with compensatory policies are not nearly enough in the very divided and unequal societies that now occupy so much of the globe," Fox said. "We now see throughout the world a rejection of the crass materialism and an intense, restless desire for spiritual rebirth."

Unlike the World Trade Organization meeting in Seattle in late 1999 and the gathering of the International Monetary Fund and World Bank in Prague last year, the Davos conference did not erupt in violent protests -- largely because Swiss armed guards prevented demonstrators from breaching the mountain passes.

"I think the participants never felt as safe as they did this year," said Klaus Schwab, the World Economic Forum president who has organized the annual meetings for the past three decades. But many participants felt distinctly uneasy about contemplating how to achieve goals of peace, freedom and prosperity while shielded by such overwhelming security measures.

"The excessive precautions were a victory for those who wanted to disrupt Davos," said George Soros, the billionaire financier whose prowess at playing the capital markets has troubled governments from Britain to Malaysia. "I do think these people have something to protest about. The global capital system creates a very uneven playing field."

Some of those who attended the conference this year said they were so repelled by the irony of discussing how to enlighten the world in what amounted to a state of siege that they could not envision coming back under the same conditions.

Most of the business executives who come to Davos are primarily interested in sniffing around for new deals, sizing up their competitors and taking the pulse of the global economy. This year, with the U.S. economy sharply slowing, many Asian and European business leaders have been much more concerned about the potential effect on their own bottom lines than with devoting much serious thought to improving the world.

"I think the majority of these chief executive officers here are more interested in the cooling of the American economy than in the warming of the planet," said Thilo Bode, executive director of the environmental group Greenpeace International.

But some corporate titans insisted it would be foolhardy to focus strictly on profits and not use their influence and financial clout to improve living standards in the world.

"This is not just philanthropy," said Carly Fiorina, president and chief executive of Hewlett-Packard Co., who is leading a drive to expand computer literacy across the Third World. "Companies like ours need to spend as much time right now worrying about where our markets will be in five to 10 years as we spend worrying where the next technologies will come from."

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