09/02/2012 - From Davos to Almaty: a dead-end road

BY CHARLES VAN DER LEEUW
SPECIAL TO TCA

ALMATY -- Countries surrounding the Caspian Sea have excelled in absence, with the exception of Azerbaijan’s head of state Ilham Aliyev, at the plush premises in the Swiss mountains where the great pretenders of the world gathered once more this year, squandering taxpayers’ and shareholders’ money respectively. Turmoil surrounding the euro-zone and futile-looking arm-twisting exercises between those who pretended to be able to keep it afloat and others who dreamed aloud of seeing it going under confined representatives from usual darlings at such meetings, the so-called emerging economies, to the position of backbenchers.

Davos’ World Economic Forum (WEF) was never meant to get decisions made. Though mass media are swarming all over the place and are treated on richly-garnered briefings with the aim to flatter their hosts’ egos, the “real business” is being discussed behind closed doors, with attendants once more bathing in luxury. And of course, where such egos gather, comedians never fail to show up either – including the one that brings the Caspian region to mind, namely Prince Andrew. Sacked or not, the hapless long-time inheritor of the equally hapless Richard III conversed with Ilham Aliyev as though nothing had come to pass.

“Fresh questions were being raised about the Prince's attendance at the World Economic Forum in Davos, Switzerland, where he is staying in a luxury ski chalet - at the expense of the taxpayer, it has emerged,” the daily Mail reported. “His controversial remarks were made at a private cocktail party at the conference, attended by international political and business leaders.” The paper quoted the slippery royalty as “joking”: “The message to get across here tonight is that Britain is open for business – unlike one or two other countries I could mention.” To warm applause, he added: “And what is more, we have our own currency!”

In case Mr. Aliyev thought he could strike tangible business, he wasted time on useless royalty but put his hopes on the wrong people altogether. Other Central-Asian countries’ heads of state stuck to their business at home and either sent junior cabinet members to the party or, like Kazakhstan, all but completely ignored it. It makes one wonder why mass media pay such attention, though often rightfully critical, to it.

“Forget the reviled ‘1 per cent’,” The Independent (the English one, that is) wrote in an ironical-looking comment on the eve of the gathering. “From next Wednesday, corporate titans, senior bankers, wealthy entrepreneurs and top politicians from almost 100 countries will converge, once more, on a ski resort in Switzerland, a short hike up the valley from Klosters. As always, Davos has attracted a stunning list of delegates. From the political world, Angela Merkel, David Cameron, Ed Miliband, Tim Geithner and Zhou Xiaochuan, the governor of China's central bank, will all turn up to take in the Alpine air. The international governance crowd will be there too, from Christine Lagarde to Ban Ki Moon to Tony Blair and Gordon Brown.”

“The WEF's organisers choose nebulous ‘themes’ for the annual meetings that might have been plucked at random from a dictionary of management jargon,” The Independent’s article opines. “In 2011 it was ‘Shared norms for the new reality’. This year it is ‘The great transformation: shaping new models’. One would not be surprised if next year's forum were to be devoted to ‘The great shared norm: shaping new realities’.” To illustrate the hollow rhetoric the self-styled economic gurus (also always present) indulge in, the paper added a quote by Nouriel Roubini, “nicknamed Dr Doom” as proclaiming: “The euro zone is a slow-motion train wreck.” “Roubini sees Greece leaving the euro within a year, possibly followed by Portugal,” the article reads. “He told delegates there is a 50 percent chance of the bloc breaking up completely in the next 3-5 years.”

So where does the entire circus leave Central Asia at last? The answer can only be: where it always was to begin with. “Today, none of these countries to Turkey’s east appear on anyone’s emerging list,” a column Turkey’s English-language newspaper published during the Davos party – but not from the spot – was to read. “Yes, they have many problems including sectarian unrest, strongman rule and testy neighbors. Sure, we know them as resource economies for their oil and gas, of which most have large amounts. But Kazakhstan and Turkmenistan have vast areas suitable for expansion of agriculture in a hungry world. Uzbekistan is a major producer of gold. [… ] Even poor Afghanistan, should it ever claim a modicum of peace and stability, has mineral reserves calculated to be worth $3 trillion, yet only China has taken heed.”

If there is after all anything to learn from Davos, it must be that the cash needed to develop that wealth simply stays elsewhere. “Away from the media glare, a secret steering group of top European and U.S. policymakers, the ECB's Draghi and IMF Managing Director Christine Lagarde discussed how to strengthen financial defences to protect the euro zone,” Swiss television reported. “The group, including finance ministers of France, Germany and the United States, discussed a plan to assemble a combined war chest of 1.5 trillion euro by the time of the International Monetary Fund's spring meeting in April, one participant said.” Meanwhile, back home, the Kazakh government last week announced that it would need to borrow up to 2.2 billion dollars to keep its industrialisation programme at pace. Where they could eventually raise that money remained unclear – but certainly not in Davos.