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Davos World Economic Forum: Pricey Corporate Trade Association Loses Its Camouflage

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Introduction

The World Economic Forum (WEF) is bringing its annual meeting from its traditional venue in Davos, Switzerland, to New York City between January 31 and February 4, 2002. The WEF was founded in 1971 by Klaus M. Schwab, a Swiss business professor, to teach European and American business management techniques. World Economic Forum 1998/1999 Annual Report at 4. Over the next three decades, Schwab transformed the WEF into an elite, invitation-only corporate trade association with a membership of the world s largest corporations In the process, he rewarded his own family foundation, the Schwab Foundation for Economic and Social Development, handsomely. The WEF invites selected world leaders, journalists, academics and others to join the WEF corporate members them at an exclusive annual session of private meetings and events held in the isolated alpine village of Davos as well as a series of regional meetings and in assorted on-going working groups and projects.

Though WEF's membership list is similar to that of the International Chamber of Commerce (ICC) and a former top WEF staffer is now ICC's Director unlike the Chamber, the WEF has worked hard to avoid being viewed as a corporate trade association. Rather the WEF has built an image as a venue for great debates and discussions on the issues of importance to the world with diverse participants from throughout the globe and all sectors of society. In fact, the WEF is anything but a global organization; its board members and the attendance at its annual meeting are overwhelmingly from Europe, the U.S. and Japan. The WEF has evolved into a venue where elite businessmen can hobnob with world leaders and government officials, both to craft business deals and curry favors from politicians.

This analysis by Public Citizen of press accounts, public WEF material, international corporate disclosure documents and internal WEF documents we have obtained shows:

Corporate Trade Association Marketing Itself as Neutral Party While the WEF promotes itself as a lofty venue for dialogue and debate, in fact its membership is comprised of 1,000 large, mainly U.S., European and Japanese corporations. Only companies with annual revenues over $1 billion are invited and as with all trade associations, hefty fees and dues are charged. Review of WEF documents show that while the annual forum is touted for its panels and presentations, the real work occurs in a series of shadowy industry sectoral meetings and in private sessions where corporate chieftains can meet with the many heads of state (18 presidents and 9 prime ministers expected in 2002) and other government leaders invited to attend the Forum without the knowledge of the press, public or even parliamentarians. Although the membership of the WEF is similar to the International Chamber of Commerce, WEF markets itself to give a patina of legitimacy to what is simply another special interest trade association.

WEF's Actual Composition Contrasts with "Global" Image. WEF's 2002 attendance list and updated WEF board reports show that the actual make-up of WEF membership, attendance and board members tell a different story than the image of inclusiveness the WEF projects. Rather than being a world organization either in its board or attendees, WEF largely represents a tiny portion of the world the European, American and Japanese business community and only a subgroup who can afford the enormous membership fees. This reality explains the premium placed by the WEF on paving the way for increased corporate-backed trade liberalization as well as national level deregulation, an agenda that is ardently supported by the giant corporations that comprise the WEF s membership. As Time Europe reported in 2000: "Davos is probably the closest thing globalization has to a world headquarters." Recognition of the WEF s true nature explains why as public opposition to status quo globalization has grown, the WEF has been dragged from relative obscurity to being a focus of public scrutiny.

WEF's Failed Attempt to Use NGOs to Create Legitimacy The WEF launched an embarrassing, failed public relations experiment following the Seattle WTO Ministerial s collapse in which it sought to build an image of balance and legitimacy by inviting more non-governmental organizations (NGOs) and critics of corporate globalization to speak as fellows at the WEF. The study reveals an exchange of letters at last year's Davos summit between the NGOs and Schwab which was instigated by Amnesty International's global director regarding the aggressive security sweeps that led to the arrests of hundreds of people. Most of the organizations which signed the letter, especially those from the developing world, were not invited to participate again in 2002. At least one prominent group, Greenpeace, which was not uninvited has publicly rejected WEF's invitation for 2002 to protest the insincere treatment of NGOs and the environmental agenda by WEF.

 Deals Between Schwab Foundation and WEF Members The holdings of the WEF president's private foundation have benefitted from the cozy business contacts with WEF members, WEF partners and the WEF itself including tangled investments, board memberships and contract awards. WEF President Klaus Schwab sits on the board of Swiss bank holding company Vontobel, which underwrote the initial public offering of Swiss software company Think Tools, where Schwab also was on the board of directors. A considerable portion of Think Tools business is related to the WEF and Vontobel. Virtually all of Think Tools clients were WEF members in 2000. For example, in December 2000, Think Tools announced a joint venture with consultant A.T. Kearney, one of the WEF s partners. Think Tools contracted to provide Internet banking software for Vontobel, which was terminated for substantial losses in 2001. Think Tools developed the software for WEF's Global Agenda project, which was launched in late 2000 and helped develop content for the Global Agenda in 2001. On August 31, 2001, in its most recent filing, Think Tools disclosed that the Schwab Foundation-held World Communications Development held 139,051 shares of Think Tools, or 5.79% of the software company.

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