Page last updated at 23:57 GMT, Wednesday, 28 January 2009

It's Davos but not as we know it

By Tim Weber
Business editor, BBC News website, in Davos

A Super Puma helicopter from the Swiss army leaves the roof of the Davos
Fewer attendees are arriving by helicopter this year.

Davos is still Davos, but not as we know it. The schmoozefest has turned into a gloomfest.

There is that word again: gloom.

You may accuse me of overusing it during the past two days. Problem is, nearly all the business leaders and politicians here are using the word - or variations of it - as well. Again and again.

No wonder the swagger of bankers and hedge fund managers is gone. In fact, it is difficult to find bankers here. Most of Wall Street's top bosses have decided to stay in New York in their offices.

The people that have come to Davos fall into two categories: they are either humbled or deeply concerned.

There hasn't been a session that didn't have a downbeat tone about it. And with old certainties gone - for example the assumption that free markets can fix everything - the discussions at times seem to be without direction.

Loss of trust is at fairly disastrous levels, we are told

The most depressing session of the day was also one of the most oversubscribed events in Davos history (with the obvious exception of the lunch with Angelina Jolie).

A working dinner looking at why investment bank Lehman Brothers failed and how bad the financial crisis really is, was booked out within minutes, and had a waiting list of more than 150 people.

It was a fascinating evening, intellectually stimulating, but after the first two apocalyptic assessments of the extent of the crisis I wondered whether the organisers would be handing out razor blades at the exit.

Keeping up appearances

Davos has always been about keeping up appearances. But the style has changed.

Crowds at Davos
Davos has been a more subdued affair this time around.

A couple of years ago, venture capital bosses did not think twice about impressing their guests with expensive vintage wines.

This year, showing off is ever so politically incorrect.

One chief executive mused that while "out of principle" he wouldn't use a helicopter to fly from Zurich airport to Davos, now it wouldn't play well with his shareholders either.

Little wonder that the party spirit has disappeared.

There are still receptions, but they are fewer, more private and much more subdued affairs. Local papers claim that spending on parties has dropped 30%.

A dearth of celebrities

Finally, the celebrity count has fallen to nearly zero.

There is no Angelina Jolie, no Brad Pitt, no Sharon Stone or Richard Gere or Michael Douglas or Emma Thompson.

Only Bollywood legend Amitabh Bachchan and Chinese martial arts movie star Jet Li provide some glamour.

Even Bono is giving it a miss. The rockstar is a Davos regular, using the World Economic Forum to push his campaign against poverty in developing countries.

This year, however, he decided to stay in his recording studio.

He probably realised that even he would find it difficult to be heard. Because this year only one topic dominates all discussions: the economic crisis.

Depressingly, this very crisis will probably hit poor countries particularly hard should trade barriers rise and foreign direct investment fall (except the poorest nations, whose capital markets are not integrated globally).

Even the political stars here have lost some of their shine.

Half a year ago, both China's Premier Wen Jiabao and Russia's Prime Minister Vladimir Putin were rulers of economic powerhouses.

The dramatic fall in demand for Chinese goods and the collapse in the oil price have put an end to that.

Irrational despair?

From time to time, there is resistance. There are companies that do well, and their bosses are not too reluctant to say so.

Some participants try to spot some good news, but usually fail.

And a few arch capitalists also keep trying to raise the free market banner.

Only a few industries are at fault in this crisis, insists the boss of a global law firm.

Despite all their flaws, capitalism and entrepreneurialism are still the best methods to create wealth and lift people out of poverty, say a private equity manager and the boss of a sprawling European holding company.

But the Davos herd is moving in a different direction, and bullish bosses are pilloried by their peers.

To quote one of the participants: the irrational exuberance of past years has been replaced by irrational despair.



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