Is Davos Relevant?

Davos is the annual World Economic Forum where world leaders analyze the current economic situation and formulates strategies to improve the state of the world.

This year we have seen Jamie Dimon, chief executive of JP Morgan, lashing out at critics of the financial system and the French Predident Nicolas Sarkozy speaking against the excesses of financial capitalism. We have also seen David Cameron defending his tough recovery plan.

Apart from being a platform where world leaders express their opinion about the current economic climate, is anything new coming up from these high profile conferences? Do the Davos’ agreements and resolutions have any impact in the markets or in our domestic economy? How do these policies affect the average person if at all?

Last year one of the key points of the meeting was redesigning financial regulations; nevertheless we have not yet seen any concrete action to avoid another banking crisis.

It seems that Davos is a wishing list for world leaders. Some of last year's resolutions were:

• Redesign the world’s 20th century institutions to meet 21st century demands.
• Draft new rules for the governance of globalization.
• Develop new metrics that integrate social goals and values.
• Drive the world’s responses to the most pressing global risks through values and the protection of people’s rights to address systemic problems.
• Outline global goals and guidelines for moving forward in addressing global risks, while respecting a person’s individual pathway.

This year's meeting focused on global threats, from political turmoil to scarce resources, and the health of the euro. There are good intentions; nevertheless, the results are still uncertain.

For some analysts the most important aspect of Davos is the networking to make powerful people think about relevant topics. That is why we saw Bill and Melinda Gates making efforts to join forces to eradicate polio. Without these types of forums it would be more difficult to fulfil these goals.

Stephen Roach,Chairman of Morgan Stanley Asia, thinks that “the forum involves a fairly representative group of key decision makers from around the world”. He acknowledges that the meeting will not make a substantive difference but believes the in-depth hand-wringing about the state of the world is relevant to develop further strategies and policies.