January 23, 2008
Klaus Schwab

Ipek Cem met with World Economic Forum founder and Chairman Klaus Schwab before this year's meetings in Davos. They discussed a variety of issues including the challenges to the global economy, the environment and emerging markets such as China, India, Russia and Turkey.

Ipek Cem: My guest today is Dr Klaus Schwab, founder and Chairman of the World Economic Forum. Welcome to Global Leaders.


Klaus Schwab: I am very pleased to be with you, Mrs Cem.


Ipek Cem: When we were last together it was in the World Economic Forum meetings in Istanbul, and we were very much focused on Turkey. Now we are sitting here in Geneva, and we are in the eve of the Davos annual meetings. And we see from Turkey that our country will be very much involved in this year's meetings, so I wanted to find out from you, what is the progress of relations with Turkey and the Forum?


Klaus Schwab: Our relationship with Turkey dates back over 30 years. Actually I was always fascinated by Turkey, and it was the first country where the Forum was active in outside the core of what was the six European countries, the inner core of the European Community. Now, during the last 30 years, we had many activities. We wanted to draw attention to Turkey, and it was actually, I have to say, in the 70s and 80s, it was not very easy because Turkey was still considered to be a country with a lot of problems. Now, we want to highlight Turkey, because highlighting Turkey is very appropriate, in many aspects. But Turkey has shown, particularly during the last years, it has a great potential to become one of the many powers, if I may say so, in the global context.


Ipek Cem: Actually, when we first heard of Davos, it was from the Davos Declaration between the then Prime Minister Özal and the Greek Prime Minister Papandreou, so Turkey goes way back in terms of the number of years of involvement.


Klaus Schwab: That's right, and I am particularly proud at that time I was working very closely together with Prime Minister Özal and Prime Minister Papandreou, and I think Davos was the ideal platform to help... to recreate better relations between the two countries.


Ipek Cem: We see more and more of a focus on emerging markets: large countries, such as China, such as India, such as Russia, and now we feel that this year's meetings will also highlight Turkey with especially the Gala Evening being dedicated to Turkey. What are your feelings about that?


Klaus Schwab: What we are seeing, in general, is a transition in the world from a unipolar, or even bipolar, unipolar now to a multipolar system. And of course in this multipolar system, India and China are the big powers which immediately come to your mind. But actually what we are witnessing is a wave of countries who have great potential, who are large countries, who will play in this multipolar world a very particular and very important role. And we feel that Turkey is one of those countries.


Ipek Cem: We talk about the BRICS, and now there is the idea to get Turkey involved in such a concept. Do you think Turkey is ready for this ... for "prime time", let's say?


Klaus Schwab: I think it is, and actually I recall at our meeting, last time, in Istanbul, in 2006, we spoke about TBRICS I coined this expression to show it is not only Brazil, Russia, India, and China, but we should also look at Turkey. Now Turkey is... comes to mind, and it's justified to talk about Turkey: because it has a large population; it has very sophisticated business leaders; it has good educational systems – at least in some parts of the country; it is a young population; and it has a very optimal, strategic location, being a bridge between the Middle East and Europe: belonging to Europe BUT reaching out to the Middle East, Russia, Mediterranean, so I see Turkey, particularly now after it has solved some of its long-lasting issues, like inflation and so on, I see it as a big potential for the world.


Ipek Cem: We know, in Turkey, now that four major Turkish business groups are very much involved in this year's meetings, and also other Turkish companies are involved, and you expect a significant turnout from Turkey. When a country gets so involved, how is the initiative formed? Is it the World Economic Forum going to government officials, to business people, saying, "It's time for you"? Or was this an initiative taken by the Turks?


Klaus Schwab: No. When we look at the participation, I think it is a very substantial one, but in Davos we have over 30 heads of state, heads of government. Davos really brings together the world. Davos becomes a global village. But there are certain countries which deserve to be particularly placed in the centre, and I think Turkey is such a country which deserves particular attention. And it deserves attention not only in economic terms. I think we should look at Turkey's culture and see the total context of Turkey, and that is the reason why we have invited Turkey... not only to be present in a substantial political and business way, but also being the host of our major event in Davos.


Ipek Cem: There will be over 2000 people from all over the world this year, and you have coined the term, "The power of collaborative imagination" as the main theme for Davos. It is kind of a very idealistic way of looking at the world. How feasible do you think collaboration is?


Klaus Schwab: What we witness in the world is that countries become more and more nationalistic again... more egoistic again... now the challenges we are confronted with, in the world, like global warming, fight against terrorism, infectious diseases, poverty, and so on, they are all global challenges, and require global cooperation. Now, we have to look at new forms of cooperation, and our belief is that it is not only business, or governments who have to cooperate, we need a platform where everybody's involved: business, governments, international organisations, civil society, academia, and that's the World Economic Forum: The World Economic Forum is a framework to integrate everybody in a collaborative way: to address the challenges on the global agenda.


Ipek Cem: In the Co-Chairs list, I saw such names as Dr Henry Kissinger, Tony Blair, and many other well-known names from the world. Who do you think will be some of the people who will leave their mark this year? Is it possible to say?


Klaus Schwab: No. Davos is... how shall I say... is known for the surprises. You look... What we are doing at the beginning of the year is to look at all the global issues, and to invite everybody who is relevant. What comes out, we do not predetermine. So we will see what the particular surprise will be. Who will get special attention, for example in 2007 it was climate change. (Yes) In 2007 it was China. We will see what is happening in 2008. My assumption is that the Turkish presence will get great attention, and my assumption is also that water shortage, and the management of water will be a very important theme. And I know it is a particularly important theme also for Turkey.


Ipek Cem: Since 1971, you have been holding the Annual Meetings. In the beginning they had more of a European and business context. And then it took on an international theme, and during these times there have been accomplishments whether you predicted or not. There have been rapprochements or certain announcements whether it was with Gorbachev, over the years with Africa, with many different themes. What would you say were the highlights that made you say, "I am so glad I did this thing... This and this happened"?


Klaus Schwab: It's not so much the specific highlight. Of course I could mention many, like our role in South Africa. We already referred to the Turkish-Greek relationship. I think we were very instrumental to make business much more responsible in environmental terms. But what is, for me, important is to have... that we have created a platform which today is accepted by everybody. A platform which integrates all of the stakeholders of society, really to address the global challenges, because governments alone, today, cannot really resolve the problems. Business cannot do it. NGOs cannot do it. So what we need is a very comprehensive, global platform which brings everybody together, and brings them together under the mission of the World Economic Forum to improve the state of the world.


Ipek Cem: How do you try to also get critics involved, because there are critics of the Forum, and you even mention on your website it is sometimes seen as a, maybe rich men's club, or maybe too much business oriented. How do you try to involve the critics of the Forum so they can be part of the discussion?


Klaus Schwab: Now the Forum is really for global decision makers and of course those global decision makers have power.


Ipek Cem: That's true.


Klaus Schwab: But we want to influence them in a positive way. We want to make sure they are really aware of all the global issues, and they react in the global interest. Now, how do we involve, let's say the people on the street? We have, in Davos, integrated into the discussions very critical people. We have all the heads of the important global NGOs. Amnesty International, Save the Children, Greenpeace, and so on. So the critical voice is built in. But in addition, we have started cooperation with YouTube, and we have opened the discussions to Davos to everybody who wants to listen on the internet, or to see what's happening. But not only to see, but to make, also, comments.


Ipek Cem: Actually, I was on YouTube on that site, on that particular page looking at the Davos question. "How to improve the world?", and I was looking at some of the responses.


Klaus Schwab: We had 750,000 people who reacted to the Davos question on YouTube.


Ipek Cem: And how will you publicise some of the comments? During the Davos meeting I think you will make a special effort for that.


Klaus Schwab: Yes, we will do so. To have the input from everybody into the discussion, deliberations of Davos.


Ipek Cem: When you look at the world today there are clearly problems that need global solutions, but at the same time we may not have the kind of wars like World War One or World War Two, but we have serious regional conflicts, and serious conflicts all around the world, that kind of people get accustomed to like Iraq, or what's happening in Pakistan, Afghanistan, or the Israeli-Palestinian issue. How... and these are very difficult issues... How to approach these kind of regional conflicts with the network that you create. Can your network, can your meetings impact these kind of very difficult questions?


Klaus Schwab: One problem we have in the world, and it's a key problem, is that we have so many challenges, so many risks. The Forum is doing, as you know, a lot of other things, not just Davos. So we have the research work where we publish... Every year we define what are the key risks for the world. We have identified over 30 risks. So our role is to create awareness: to shake up the public. Don't forget! Don't be indifferent. What's happening in Palestine, and between Palestine and Israel, is shaping future generations. What's happening in Iraq... What's happening everywhere in the world. So the role which we have is to make sure that global attention remains focused on those very crucial issues. And in certain cases we can also make proposals, how to solve those issues.


Ipek Cem: What are some of those major risks that you would like to mention, among the 30 that you see as the most threatening to world peace and prosperity.


Klaus Schwab: You have, of course, more political risks, and then you have risks in the more economic, and the more ecologically... Let me just pick out three, from each of those areas. From Economic point of view I think we are facing the threat and the risk of a true generalised global recession, (yes) because there are so many imbalances inside the financial system. We have to make sure that we address those imbalances. The gap between the poor and the rich, and so on, and so on. That's economically interesting. Now from an ecological point of view, it's climate change, but it is not only climate change. It's food security. It's energy security. Its climate changes. It's water. All those subjects are inter-related, so we have to show, in Davos, the complexity of the challenge we have in terms of safeguarding our environment. Now in the more political area, I think the situation in the Middle East, and we will have in Davos 2008 all the major players. Not only Palestine, Israel, but also Iraq, Iran, so all the neighbour countries of Turkey will be represented - and of course Afghanistan, Pakistan. This is, at the moment, probably the number one global challenge.


Ipek Cem: Is there a UN kind of feeling during the meetings? I mean it in the context of when you get so many decision makers together, clearly they are also meeting amongst each other. Privately or in groups during the meetings in their off time, maybe in the evening. Do these meetings take place in a planned manner, or do they happen colloquially, are they prearrange?


Klaus Schwab: I think they are partially prearranged. I mean certain governments who come to Davos have very clear objectives, and they have the necessary bilaterals to reach those objective. But let's not forget. There is one big difference between Davos and all other meetings. The big difference is that in Davos you have a comprehensive approach, which means it is not just related to one issue: trade or environment. You look at all those issues in a comprehensive interdisciplinary way. There is another, even more important difference. People in Davos come as individuals; they come to listen, and afterwards they leave Davos being better informed. They come to Davos not to defend, primarily, a national agenda, they come to Davos really to look at the world as a whole. And I think this is unique. You don't have it anywhere else in the world, because usually you go to a meeting to defend you own interests. Here you come as a global citizen.


Ipek Cem: When you look at political decision making, business strategy, policy making, and then you look at the leaders, and leadership changes in corporations, and heads of state change, parties, governments change. How do you sustain continuity of relationships between the Forum and a certain country or the business community when such change occurs? Sometimes it's more dramatic change.


Klaus Schwab: First, the World Economic Forum is recognised for being neutral, independent. We don't favour one particular party, or one particular person. We are completely independent, and I think that's perhaps the best tradition of Switzerland as a neutral, impartial party. And I think that is very important because we have built up trust by everybody that we act in a non-interested way. Now, on the other hand, I think governments and business have recognised that the Forum is an indispensable partner today, because we provide this framework which you do not find otherwise. You have the UN, you have many other organisations, but they are all limited. It's only in the World Economic Forum where you have a strategic approach involving all stakeholders. So we never have problems if there is a change, usually even the successor party, or person, would come to us and say we would like to continue the relationship.


Ipek Cem: You also have a mechanism called Young Global Leaders, and I found...


Klaus Schwab: Which is very important for us.


Ipek Cem: Yes. I found this quite fascinating, and I actually have met some of the Young Global Leaders. How does this work? How is the election process? And how do they collaborate among themselves?


Klaus Schwab: We first... the Young Global Leaders when we talk about stakeholders of global society, are essential, because half of the world's population is probably below 25 – 30 years old. So when we talk about the big issues in our world we have to integrate the voices of the future. The young people, the young leaders. Now, what we are doing is every year to identify the most successful, the most relevant  250 people, globally. Young global leaders, leaders below 40 years old. And we developed a big list, we have about 3000 every year, and then we ask the world's top media leaders, in every country, to make the final choice.


Ipek Cem: And the election is made from which countries? All countries... is there...?


Klaus Schwab: All countries... but we have media leaders in practically in each country. And now those.. once they are elected, we engage those people in our activities, but they have their own initiatives, and very important initiatives in the environmental fields... usually in the social field, not in the business or political field. Practically always in the social area.


Ipek Cem: We've talked, previously in our meetings, about Turkey and European Union enlargement. And you are a witness of the European enlargement being a European, and having followed this all your life, practically. How do you think the Turkish accession process to Europe is going?


Klaus Schwab: I think that there is a lot of misunderstanding, and we have to work hard to remove the barriers which we find inside the present European Union, but also inside Turkey. I think the two, Turkey and Europe, belong together. I feel that we can grow together, but a lot of work will have to be done to create a better understanding of the advantages and also better understanding of the common cultural, historical roots, even if we have different religions.


Ipek Cem: Some countries like Austria, like France - more recently - are voicing openly their concern for Turkey becoming a full member, and clearly laying out for a different kind of relationship between European Union and Turkey. Do you believe this is impacting European Union policy or is more national, or individual opinions?


Klaus Schwab: You know, those countries of course have to take into account popular feelings, or unfortunately also popular resentments. I think it's the task of those governments not just to go with those popular feelings and resentments, but to make sure that the population is sufficiently educated and sufficiently informed about the advantages and, of course, obstacles to Turkey joining the European Union.


Ipek Cem: When I looked at the programme of the World Economic Forum for 2008, I also know that between October 22 and 24, you have a Eurasia conference scheduled in Turkey. And this is more of an international conference than perhaps the one in 2006. What prompted this topic, and the choice of Istanbul?


Klaus Schwab: I am quite optimistic that in the near future we will have a better integration again of Iraq, possibly of Iran, but also if you look at the central Asian countries, into the world context... and here of course Turkey as a neighbour... as a cultural neighbour, also, plays a major role. So we feel, when we look at Turkey, this year, later this year, it should be not done only in the narrow context of  Turkey. It should look at Turkey as a power, as an integrator of a regional... a region... which for the world plays a very determining role.


Ipek Cem: The World Economic Forum has been a very visible and very strong institution, spanning almost four decades, now. When an institution is so successful and so well-known, and of course there are critics as well, what is next for the World Economic Forum?


Klaus Schwab: We have some fascinating plans.


Ipek Cem: Yes. What are they?


Klaus Schwab: No. I can't share with you, because we will present it in Davos. You know about Facebook, which is a new phenomenon, which helps we talked at the beginning of the interview about collaboration, and I think we have, today, we have new methods, new means, virtual means. We have the internet to... and the internet should be used to force cooperation, not only as an instrument to get information, but to create cooperation. Facebook is such an instrument. So what we are doing is we are creating a virtual community of global decision makers to be integrated into a... what we call... "welcome": World Electronic Community. So what we are doing is setting up a virtual Davos, if I may say so, where all the problems which we deal with in Davos are continued to be... where all those problems are followed up, where we can create taskforces in advance. So there will be much more depth, much more involvement, of more people, and so on. So we want to be unique, new instrument for global cooperation in the future. And I am very confident that we will revolutionise international relations with such a system.


Ipek Cem: That sounds very interesting. Will this be operational this year?


Klaus Schwab: We will have what you call in the jargon, we will have a Beta version in Davos.


Ipek Cem: On that note, I want to thank you very much for this candid interview.


Klaus Schwab: Thank you Mrs Cem. Thank you very much.


This transcript was typed from a transcription unit recording and not copied from an original script. Because of the possibility of mis-hearing and the difficulty, in some cases, of identifying individual speakers, NTV networks and Ipek Cem cannot vouch for its accuracy.