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When demonstrators packed the streets of Seattle last December to scuttle the World Trade Organization meeting and shout about their dissatisfaction with economic globalization, some journalists described them as "politically correct" activists. Reporters and pundits contended that the protestors offered simplistic and one-sided solutions lacking any objectivity. Two months later, scores of these same media commentators showed up in Davos, in the Swiss alps, to cover the annual summit of the World Economic Forum, a gathering of many of the most important corporate and government leaders in the world. I joined them to watch top media chieftains interact with the overlords of the global economy-only to discover, ironically, that there was a PC quality to the media's cheerleading at Davos.
In this case, "P" stood not for "political" but for "participate"-and "promote": many media people were invited to Davos as insiders, not outsiders; to join, not to watch. The agenda of globalization requires public acceptance of that model as the only viable strategy for economic growth. That was the message that Bill Clinton brought to Davos. The architects of the new global economic order need to market this message; that's the role they've assigned to the media. Media outlets have become willing promoters of globalization and consistent attackers of its noisy critics. The media not only spin global news to hype market values but are themselves purveyors of products, which they bring to the world market. They sell as they tell. In Davos, many media companies had displays to demonstrate their wares and push propaganda via their information technology and specialized services.
As for the "C" in "PC," I was struck by how the media landscape was literally, physically divided along class lines. The working press-the grunts who file daily copy-were stuck in the dungeon-like basement of the high-tech Congress Center, with its plethora of conference rooms, meeting halls and executive lounges looming above. They were crammed into small, smoky rooms in the area typically used, in Swiss buildings, for fallout shelters. You had to squeeze your way between the rows of computer screens and reporters babbling in a cacophony of different tongues. There, behind bombproof doors, many media drones seemed tethered to their computers, pounding away to meet deadline cycles. It's important to note that all of these working class journos had badges restricting their access to certain Forum events. Thus, much of the copy they wrote was based on reams of handouts, session summaries and the snatches of the proceedings they watched on live, closed-circuit TV. The whole building was quickly awash in tons of background documents and company promo packets. The airlines would later rack up a fortune in excess baggage charges for overweight luggage, stuffed with forests' worth of Davos documents. I nearly suffered a hernia hauling all my booty home.
A level up, some of the better-known media brands, such as CNN, CNBC and Reuters, had their own suites and mini-studios, designed to shuttle interviewees in and out for quick Q&As and pithy soundbites. A state-of-the-art, user-friendly computer conferencing system with scores of available terminals made requesting appointments from the high and mighty easy and efficient-for the media's high and mighty. Outside crews from lesser media outlets were escorted in for limited shooting on the conference floor.
Further up the media food chain, and not confined to offices or routines, "name" correspondents were given privileged "all access" white badges and full conference status. The editors and star columnists were labeled "media leaders" and invited to join key panels to share their punditry with the crowds. Usually, these were globalization gurus such as the MIT economist Paul Krugman and Thomas Friedman of The New York Times op-ed page. The more skeptical among us were kept in the seats, not on the stage. We could ask questions but not offer perspectives.
Finally, at the apex of the heap, were the big media bosses and new media honchos who were there to do much more than report on the schmoozing. They wheeled and dealed in separate meetings in nearby well-guarded hotels and special offices. I met Microsoft chief Bill Gates; Howard Stringer, the newly knighted head of Sony; Michael Bloomberg of Bloomberg Media; Rob Glazer of Real Networks; Shelby Coffey of CNN; and Robert Bartlet, the ultra-conservative commissar of The Wall Street Journal's editorial page. I missed AOL's Steve Case, News Corp's Rupert Murdoch, Barry Diller of USA Networks, and other top players who were on hand to promote their companies and explore new business alliances.
Significantly, and not surprisingly, there was no discussion, at any level of the media pyramid, of the media's role and responsibility in covering economic issues-nor did any media company take part in the many discussions of corporate social responsibility. As well, none of the handful of well-known critics of globalization from non-governmental organizations, who were invited to add spice and conscience to this year's debates, challenged media practices or the largely uncritical coverage of the event. They, like the policy makers they came to criticize, were happy to get their 15 seconds in the media sun.
This is not to deny that critical and reflective reports on the Forum did emerge in some outlets. The Wall Street Journal's news pages exposed the business-related conflicts of interest of Forum founder Klaus Schwab, while the International Herald Tribune reported thoroughly on NGO concerns and gave op-ed space to globalization critics like AFL-CIO President John Sweeney and Malaysian environmentalist Martin Kohr. London Observer's editor Will Sutton slammed the lack of critical voices in the conference, noting that "the voices arguing that corporations need to behave...socially responsibly, and with an eye on environmental sustainability, are the weakest in the 11 years I have been coming here. In over 70 sessions on business there are no more than half a dozen in and around this territory-and they tend to be undersubscribed. The 'hard' conversations are about how to maximize shareholder value and how to be a winner in the new economy." Nonetheless, there were many experienced and thoughtful writers on hand who deserve credit for competent and balanced takes.
Overall, however, the Forum did a good job of comforting-some might say co-opting-reporters. I'll admit to enjoying media dinners (paid for by Coca-Cola) and a special program for the "Club of Media Leaders" featuring briefings by His Majesty King Abdullah of Jordan and the billionaire King of New Media, Bill Gates. It was hard not to feel a sense of importance and entitlement when supping with kings and king-servers. These "briefings" were largely superficial. Gates, for example, sang the praises of Microsoft's 2000 product line, sounding like a salesman, not a visionary. There was an unmistakably American spin on all of this, too, evident in the cozy meals arranged with U.S. trade-negotiator Charlene Barshefsky and Treasury Secretary Larry Summers.
American officials dominated the Forum, perhaps reflecting the still ballooning U.S. economy. President Clinton flew in, along with Secretary of State Madeleine Albright, Energy Secretary Bill Richardson, and National Economic Advisor Gene Sperling. While other countries dispatched Presidents and Ministers to lobby the corporate elite, none sent more big guns than Washington did. This year, Davos was USA all the way.
While CEOs and monarchs wined and dined with the press, activists got nowhere near this high-toned brand of access to the media-though top U.S. financier George Soros, who has warned of a "capitalist threat" as dangerous as yesteryear's communist threat, did get his own meet-the-press luncheon. A watchdog group, Public Eye on Davos, condemned the focus of the Forum and sponsored a debate between NGO leaders and Forum officials, which I moderated. It was poorly covered-perhaps because it was held at a nearby asthma clinic, which would have required journalists to leave the warm cocoon of the Conference Center.
TV crews did hustle into the streets when a smaller than expected anti-globalization demonstration finally materialized. The protest was quickly contained by the Swiss police, who physically limited media access. I was in the right place at the right time, which gave me a front-row seat when a handful of stick-wielding, slogan-shouting anarchists trashed the windows of a local McDonald's. Unfortunately, the fast-charging demonstrators-with their German signs calling for victory for Mexico's Zapatista rebels and freedom for American death-row inmate Mumia Abu-Jamal-made little effort, unlike their Seattle counterparts, to communicate their ideas to the press, or even to translate them for non-German speakers. Confused and incoherent, the messages and concerns of the protestors were reduced to a side bar in most articles. Some TV units did get pictures of the melee, which included snowballs hurled at tear gas-toting police (two of whom were assaulted by the protestors).
Often, media coverage snidely denigrated globalization critics. Here's Diane Francis of Canada's National Post on John Sweeney. "While some CEOs try to skimp, union chiefs live like kings. Take John Sweeney, head of the 13 million-member AFL-CIO union giant in the United States." After criticizing Globalization, "he left for his spacious Davos apartment digs. No spartan ski lodgings for this self-appointed champion of the working class around the globe." Self-appointed? Of all the critics in Davos, Sweeney was one of the few who was elected. He doesn't deserve this type of cheap shot in a town where most corporate CEOs were housed in far fancier luxury suites.
To their credit, many of the journalists and editorialists I met at the Forum had thoughtful and critical insights to share about their own media experiences, though it is doubtful many of these critiques will make it into print. One of these conversations-an informal discussion about media corruption worldwide among an international group of journalists-will be the subject of an upcoming "Dissector" column
For now, I am still digesting the dialogues and diatribes I attended at Davos. Then, too, I've resolved to work hard at losing calories from all those freebie, sauce-rich Swiss meals as I sort through my piles of Davos detritus and watch the follow-up globalization infomercials.
Danny Schechter, "The News Dissector," is the Founder and Executive Editor of the Media Channel and author of News Dissector (Electron Press, February).
AS THE MEDIA WATCH THE WORLD, WE WATCH THE MEDIA.
The Media Channel is a not-for-profit project of OneWorld Online and The Global Center, and is produced by Globalvision New Media.
Danny Schechter Executive Editor,The Media Channel http://www.mediachannel.org VP, Globalvision Inc. 1600 Broadway #700 New York, New York l0019 PHONE:212-246-0202 X3006 FAX: 212 246-2677 BOOK: http://www.globalvision.org/moreuwatch
Knowledge is power and the World Economic Forum held here annually provides participants with a wealth of information. Here are some of the more fascinating facts I picked up from the dozens of sessions I attended. They are in no particular order:
- Only 23% of U.S. Congressmen have passports.
- Last year, this high-level think-tank for public and private leaders held several dozen sessions on the marvelous Asian economic miracle. This year, a dozen dealt with damage control and fallout as a result of the Asian crisis.
- Sixty per cent of U.S. mothers with children under three years of age work outside the home.
- Eighty per cent of Americans get 10% of their news from television.
- There are now 43 million Americans without health care.
- One-third of U.S. children are illegitimate, with some inner city rates as high as 70%.
- Forty per cent of U.S. exports last year were sold in emerging markets. White House figures show that up to 20,000 jobs result for every US$1 billion in exports.
- The U.S. has created 14 million jobs in four years, one third from exports, said Stuart Eizenstadt, U.S. undersecretary of state for economic, business and agricultural affairs. "And jobs related to exports pay 15% more," he added.
- The European Union has not created one net job in a decade.
- Only 5% of the residents of the European Union live on farms, but 50% of Brussel's budget is earmarked for steep, unsustainable agricultural subsidies.
- Even the biggest skeptics from Europe and Asia grudgingly admit the "Anglo-Saxon model" of economic activity has overtaken their much-vaunted paradigms. For instance, the Thatcher Revolution (which emulated U.S. free enterprise) is being imitated now by Germany and should be copied by the rest of Europe. In the 1970s, Britain's economy lost 13 million person-days a year to strikes. In 1997, only 257,000 person-days were lost to stoppages. Research and development spending is up by 50% from before Margaret Thatcher took power, unemployment is only 5% compared with Europe's average of more than double that and foreign direct investment represents 33% of all investment, up from 25% just a decade ago.
- The central banks of South Korea and Thailand were guilty of speculating in derivatives, which helped bring about their currency collapses.
- The U.S. has only 4.5% unemployment and 60% participation rates, while France has 12.5% unemployment and only 48% worker participation.
- Japanese savings total US$14 trillion, bigger than the gross national products of Europe and the U.S. combined. This pool of capital has the worst return - only 2.5% - over two decades compared with the 19% increase in the Standard & Poor's 500 index.
- In a decade, 45% of Japan's voters will be retired.
- U.S. businesses have spent US$250 billion to clean up the environment in a decade.
- Los Angeles has dramatically cleaned up its air pollution problem. The City of Angels had 162 first-level (keep the kids in the house) smog-alert days 20 years ago. A decade ago, it had 66 such danger days and in 1997 only one. These results were achieved despite the fact there are three times as many vehicles on the road as 20 years ago.
- The U.S. spends US$25 billion subsidizing the use of fossil fuels.
- About 75% of carbon emissions are from rich countries.
- Since the Rio de Janeiro Earth Summit in 1992, only three of the dozens of signator countries have complied with their promises.
- Unless major reforms are undertaken to correct the current international system of foreign exchange, it will collapse by 2007, said arbitrage billionaire George Soros in a luncheon session here. He advocates a global central bank to supervise national central banks as well as private banking around the world.
Without imposing global standards, more shenanigans of the type that led to collapses in Mexico, South Korea, Indonesia, Malaysia and Thailand will plague the economy and disrupt economic, trade and political stability.
Prime Minister Mendsayhany Enhsayhan addressed the Mongolian-Hungarian business round-table held in Budapest on 29th January 1998. Next day he left for Davos, Switzerland, for the World Economic Forum.
BBC MONITORING SERVICE: ASIA-PACIFIC 04Feb98
For six days, chauffeur-driven limousines, some of them armor-plated, whizzed between Zurich Airport and this tiny alpine resort, bringing the rich and powerful together to talk about nothing less than transforming the world. It was a gathering of billionaires, millionaires and men and women who are not necessarily rich but control the destinies of hundreds of millions of people.
For the six days, which ended Tuesday, this was in a sense the center of the world, an unrivaled assemblage of money, political power and brain power. The setting for the 28th annual World Economic Forum, in a cavernous Congress Center set amid spectacular scenery in the snow-covered Swiss Alps, was sumptuous, but there were few ostentatious displays of wealth. The world's richest man, Microsoft's Bill Gates, showed up in scuffed brown loafers that badly needed a shine and an unfashionable green shirt, green tie and sports jacket.
The fabulously wealthy, from global corporations with combined annual sales of $5 trillion, spent part of their time talking about poverty. Thus, for all the money and glamour represented, this was hardly an alpine version of a Cannes Film Festival. It was businesslike, it went off with Swiss efficiency and it involved a lot of hard work.
Discussions began with early-morning breakfasts and went on into late-night dinner sessions, with 2,000 participants brainstorming the political, economic and social issues that will dominate as the world enters the 21st Century. It was not all work, of course. Many took to the ski slopes from time to time, and there was a black-tie Saturday night gala that featured a Swiss band dressed like the Blues Brothers. Tables groaned under mountains of food, including, naturally, every conceivable variety of Swiss chocolate.
But even spouses who accompanied most of the business moguls frequently eschewed the attractions of the ski slopes and showed up for seminars that tackled just about every conceivable topic of importance facing the world. The emphasis was on the Asian financial crisis, for which no one had a ready solution. But there was also talk of the impact of the coming European single currency on the world economy, of business ethics, robotics, biotechnology, the computer revolution, globalization, America's dominant role in the world and what that means to the rest of humanity and the question of whether 21st Century society will be more uncivil than that of today.
Amid the wealth and power that was on display, participants were occasionally reminded in their discussions of the global afflictions of poverty: Eighty percent of the world's people have no access to a telephone. Half the people on the planet do not have electricity.
U.S. Treasury Undersecretary Larry Summers, while participating in a somewhat self-congratulatory panel on America's accomplishments, also reminded his audience of the dark side of American life: A New York City child has less chance of surviving to age 5, and learning to read, than one born in Shanghai, he said. Two percent of American males between 15 and 50 are in prison. While it was an international affair, the star performers were unquestionably American: Hillary Rodham Clinton with her chastisement of American business leadership for failing to support President Clinton's policies, and House Speaker Newt Gingrich, who drew a huge ovation with perhaps the most eloquent statement any American official has yet made of the U.S. case for taking military action against Saddam Hussein's Iraq.
Gingrich outlined forcefully the threat of Iraqi chemical and biological weapons to the rest of the world and suggested that nations that fail to back the U.S. have adopted the mindset of 1935, when many leaders thought appeasement of Hitler's Germany would prevent war.
A University of California professor in the audience was moved to ask Gingrich how anyone so forceful and brilliant in exposition managed to be such a hated figure to so many people. Was it that he spoke in grammatical sentences, or was it something else? It was the one question for which Gingrich lacked a compelling answer.
But while the Americans shone, the Russians and Chinese came here acutely aware that a period of trouble lies ahead for them. The shock waves of the Asian crisis are rumbling through their countries, and the consequences in coming months could be painful.
The Russians quarreled among themselves about what it all means, and drew little support from other quarters. Prime Minister Viktor Chernomyrdin tried to focus on recent modest successes in the economy - 0.4 percent growth last year, after several years of decline, for example - but he was forced to acknowledge that structural changes needed to put Russia on a sound footing will take a further 10 to 15 years.
He also admitted Russia "is being throttled by its tax system" and failures in tax collection. A new tax code will reduce the number of taxes from 220 to 60, but even that figure should be halved, he said. He boldly predicted that Russia will be an "engine of growth" for the world economy in the next century. But his remarks came amid a backdrop of a flight of capital from Russia and a decline in foreign investment that may be accentuated by the Asian financial crisis.
Chernomyrdin also found Grigory Yavlinsky, leader of the opposition liberal Yabloko bloc in the Russian Duma, and international financier George Soros snapping at his heels.
Yavlinsky said the 0.4 percent growth figure is "fiction" because it does not take account of various negative trends or the fact that the underground economy accounts for 25 percent of total economic activity.
"Russia will either pull itself together and develop a full market economy, or it will collapse and become a semi-criminal oligarchy based on monopolies," Yavlinsky said.
Soros said the Russian government appeared to be adopting policies that would encourage insider dealing and robber capitalism, threatening the stability of the ruble and of bonds and stocks. Russia, he said, is exposed to the shocks coming from Asia and is in a "very precarious position." "The only hope for Russia is to create conditions favorable to foreign investment," he said. Chinese Deputy Premier Li Lanqing, an architect of his country's economic reform, came to Davos all smiles, with a message that reassured investors. He promised there would be no devaluation of the Chinese yuan in response to the Asian financial crisis, noting that devaluation would simply inspire China's neighbors to engage in further competitive devaluations that would help no one. But, he conceded, the Asian crisis has put pressure on China, and Beijing is responding by undertaking a three-year, $750 billion program to develop the country's infrastructure, particularly in farming, that will create millions of jobs and require further foreign investment.
While some experts questioned whether China could afford this, Li said the money would come from increased tax revenues, austerity in government spending in other areas, the issuance of government and corporate bonds and offering some enterprises on the stock market. He also promised more preferential measures for foreign investment.
Li forecast growth for China of 8 percent per annum for the next three years, and 7 percent in the early years of the 21st Century - forecasts that he said have not been altered by the Asian turmoil. While there was no Chinese Yavlinsky on hand to challenge any of this, there were background rumblings that China still does not give investors enough of a return on their money.
The head of Independent Strategy Ltd., a London-based investment research consultancy, also poured cold water on Li's optimistic assumptions about China's currency. David Roche wrote in The International Herald Tribune that China will be forced to devalue the yuan by 30 to 40 percent within 18 months, and when it does the peg of the Hong Kong dollar to the U.S. dollar at a fixed exchange rate will be doomed.
Roche also cast strong doubt on China's published figures for industrial production, and predicted the Hong Kong dollar will depreciate at least 25 percent against the U.S. dollar. Exports, the backbone of the economy, are about to collapse, he said.
Nearly everyone agreed the unrivaled position of the U.S. is secure for the foreseeable future, but not all were in accord on what this means for the rest of the world.
Dominique Moisi of the French Institute for International Relations said the dominant question going into the 21st Century would be "how to manage the centrality of the U.S." He suggested that many people outside the U.S. find it unnerving that Americans are more preoccupied with alleged sexual affairs in the White House than with the great issues of the world, ranging from the Middle East peace process to financial turmoil in Asia to massacres in Algeria. Richard Haas of the Brookings Institution worried about "powerful strains of neo-isolationism" in America.
Discussions at Davos about the European single currency, the euro, focused in part on whether it will become a serious challenger to the dollar's role as the world's leading reserve currency. The consensus seemed to be that it will - but only in the long run.
At present the dollar accounts for 60 percent of invoicing of world trade, and the currencies of the 15 nations of the European Union for about one-third. Eighty-five percent of global foreign exchange transactions have the dollar as one of their counterparts.
Summers assured participants the U.S. has nothing to fear from the euro. "A strong, prosperous, integrated Europe is a better partner for us, and a better market for our products," he said.
Jacques Santer, president of the European Commission, urged an action plan for completing the formation of the European single market so this will coincide with introduction of the euro on Jan. 1. He said liberalization of the telecommunications, electricity and gas sectors is needed, among other things, to create an integrated single market.
Shimon Peres, the former Israeli prime minister, came to Davos looking for money for Palestinians - and apparently found it. Peres, who now heads a Peace Center named for himself, wants to create infrastructure projects in the Israeli-occupied territories that will enable Palestinians to begin building their economic future without waiting for the outcome of peace talks. He described his goal as "privatizing peace." As an example, he suggested an airport be built on the Israel-Gaza Strip border that could be jointly used by Israel and a nascent Palestinian state. He said he had extracted promises from five of the biggest corporations in the world - some European, some American - to invest "where they normally wouldn't invest." These companies, which he declined to name, have annual sales of $200 billion, he said. But he acknowledged the success of his plan rests on the Palestinians having sufficient land to establish a viable state of their own, something that is still in doubt.
"It is in the interest of Israel to have a viable Palestinian state," he said."The choice is to create a binational state or a binational tragedy." -
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US First Lady Hillary Clinton smiles as she goes skiing on the Weissfluhjoch mountain near Davos February 3. Clinton was amongst around 2,000 leading politicians, bankers, financiers and company executives to take part in the World Economic Forum´s annual meeting.
DAVOS, Switzerland - LEAD: Two thousand of the world's most influential people applauded Hillary Rodham Clinton on Monday evening as she told them they must do more to share wealth and power with "the billions of men, women and children who are effectively without a voice."
The first lady's vigorous 15-minute speech to the World Economic Forum was delivered without notes.
It was judged by many here as eloquent evidence that the Clinton administration remains in charge in Washington and fully engaged in international affairs.
"Hats off to her. She's the best ambassador the United States could have," said Sheila Mathrani, correspondent for an Indian business newspaper, the Economic Times. "What a woman." "The charges against her husband are disgusting," added French Ambassador-at-Large Jean-Daniel Tordjmann.
President Clinton has been under fire since allegations surfaced recently that he had a sexual relationship with a former White House intern, Monica S. Lewinsky. Independent Counsel Kenneth W. Starr has launched an investigation of the charges.
The economic forum is an annual event that attracts leading figures from government, business, the media, academia and other fields from around the globe to this ski resort nestled high in the Alps of eastern Switzerland.
LOS ANGELES TIMES 03Feb98 P13