"Rossiiskaya Gazeta": "DAVOS AS A PREMONITION"
Davos Forum not expected to provide final anti-crisis plan
The World Economic Forum opened in Davos yesterday. Its main subject matter is the coordination of efforts in tackling the world financial crisis.
Analysts believe, however, that no recovery formulas will be accepted in Davos and that the forum will just provide an opportunity for interim discussions prior to the forthcoming meeting of G7 finance ministers and the G20 summit. These forums will take place in February and April, respectively, and are likely to provide more concrete solutions.
The Russian delegation is led by Prime Minister Putin, who is the opening speaker this year. Last year, the forum was opened by U.S. Secretary of State Condoleezza Rice. Mr Putin will present Russia's anti-crisis strategy. Russia's Prime Minister has visited the forum only once before - in 2002. After that, the country's delegations were headed by Deputy Prime Ministers and Ministers. In 2007, then First Deputy Prime Minister Dmitry Medvedev attended the forum.
Despite the unprecedented number of bureaucrats attending the Davos forum this year (over 40 heads of state and government from 96 countries and a total of 2,500 participants), some of the leading business figures are absent. The reason is the crisis. Many businessmen are reluctant to leave their businesses even for a few days; others are trying to economize. The US is particularly underrepresented. Among those who did not travel to Davos are Secretary of State Hillary Clinton, California Governor Arnold Schwarzenegger, the new Treasury Secretary, and the Head of Citi Group. The latter has never missed a forum.
Davos is considered the world's venue for discussion; however, many analysts believe that the forum's authority has been undermined. Last year, for example, the US delegation was assuring participants that things were "fine" in America. At the time, experts did not question the accuracy of the information and, as a result, misestimated the impending crisis.
Nevertheless, the forum will try to shape new world architecture, and China, whose Premier Wen Jiabao is among the participants, will be the driving force of the effort. The Chinese leader will meet with the Russian Prime Minister and with EU leaders who will attempt to revive the idea of an EU-China summit.
Some believe that friendly relations with China will allow their countries to benefit from any new emerging world architecture. It appears that Russia is in a better position to find a common language with China. There are no unsolvable issues between our countries, while the EU, for example, has initiated several anti-China schemes, to protect European manufacturers from cheap Chinese exports. Yesterday, it was announced that the Russian and Chinese Prime Ministers would discuss measures to counter the economic crisis and to strengthen bilateral cooperation. Also, a source in the Russian delegation, cited by news agencies, said that "the parties will discuss the possibility of expanding national currency settlements now practiced in border regions and of increased cooperation in the insurance and securities markets."
Therefore, the Davos forum is destined to be a background gathering for other more important meetings, which will consider the same goal of reforming the current world order. In mid February, the G7 finance ministers' meeting will be held in Rome, followed by the London summit of G20 in April. It is expected that the G7 meeting will elaborate urgent anti-crisis measures, while the G20 summit will focus on restoring the trust in financial institutions.
While Mr. Kudrin called G20 the most serious institution for elaborating anti-crisis measures, some analysts believe that these summits are trying to preserve the old world order rather than shape a new one. This is evident from the four goals proclaimed by the summit participants. It is not clear yet whether the participants are going to save the IMF, which has been discredited by its failure to foresee the crisis (the IMF is now experiencing a shortage of funds to provide assistance for developing countries suffering from the crisis. Some countries, including Russia, are refusing IMF services. Moscow is planning to obtain foreign loans, but is not going to deal with the Fund).
Therefore, on the one hand the old institutions are trying to rescue themselves, which we may witness in Davos; and on the other hand something is "brewing" behind the scenes. We have mentioned Chinese-Russian coordination; similarly, the Latin American countries are planning to call on the "old countries" to take real measures toward tackling the crisis and respecting "justice." Russia will most certainly support their efforts, as even before the crisis Moscow called for a comprehensive reform of the world order.
Verbatim
The forum participants have begun assessing the current economic situation. "The gradual rouble devaluation is the correct strategy. It allows consumers and companies to evaluate the situation and to make appropriate decisions. The rouble's weakening will significantly improve the situation for our exporters and increase the liquidity level in the country, which is important for the banking sector. The rouble's gradual devaluation will definitely help overcome the crisis. I believe that it will contribute to economic recovery," VTB bank President Andrei Kostin said.
