‘India is important to show you can reach 8 pc economic growth, because you are a democracy’

• And you don’t mind the World Economic Forum being described as a United Nations of ideas?

No, because if you want to improve the world — and that’s our motto and our mission — then you have to start with ideas, with solutions. I always say we need first to define together the problem, then we have to define the objective, how we solve the problem, and finally we have to join in action together. So, there are three different steps which we usually apply to our activities. Ideas are very important and I am very proud that the forum has generated many new ideas in the world.

• As you go from, say, Davos in January to Jordan in May, then Africa, China, Russia, India, what common strands do you see in these meetings, in terms of ideas?

First, I think every government today is interested in integrating the country, the economy, into the global sphere. That’s what really counts because there is now the recognition that if you are an open economy, if you are in interaction with the rest of the world, you can make the best of yourselves, in order to address the issues you have on a local, a national level. So there is great interest in engaging with our different activities.

• And what are the common concerns that you hear as you move from capital to capital?

I would say the most important common concern is, on the one hand, how can we stay competitive in a world which is driven by technological progress — and, as you know, the World Economic Forum is today the leading institution in assessing competitiveness. But the second pillar is, how can we make sure that our competitiveness is combined with social responsibility. We cannot create economies where you have only a few who profit from them; we have to create economies that are inclusive. That is, today, the major challenge in the world: how to create economic progress and social development at the same time. I personally feel the two are not in contradiction. Much to the contrary, we need economic progress, we need entrepreneurs, in order to really stimulate social progress.

• But, Klaus, there are those who feel that globalisation is all about a search for global profits, that it’s not about global sharing or global concern or global empowerment, but about picking up profits, which only some can do in the western world.

What you’re saying here, Shekhar, addresses only one dimension — and I would say one felt by only a minority of people. Globalisation means first growing together. It’s not only its business dimension. If you look at communications, at travel, at food, it’s everywhere. Now, business has profited from globalisation because it offered new opportunities, it created millions and millions of new jobs. What we have to do is something like when you had the Industrial Revolution. At that time you had long working hours and so on. What we have to do is tame globalisation so that you reduce, as much as possible, its negative impact.

• Would you give me some examples of globalisation’s negative effects, the ones that need to be tamed?

Well, globalisation could lead to exploitation. You have companies looking for the cheapest labour, for the best opportunity. That’s natural because you are under competitive pressure. But what we are saying is that we have to create the rules for globalisation. Globalisation needs rules.

• And who would make those rules and who will make sure they are observed?

That’s the big problem we have in the world. We have a lack of global governance. If we look the UN, at the G-8, at international organisations, they are not enough. We need more institutions to develop global rules. But, I would add, those global rules should not only be developed by governments, but by civil society. We are living in an empowered world today and business has a role to play.

• Klaus, you have two PhDs — in engineering and economics, I believe — and then you studied administration at the Kennedy School. Take us back a little in time. How did the idea of the World Economic Forum come up? It is one of the great entrepreneurial ideas of these times. How did it happen?

I felt what we need in the world is not confrontation. I grew up in Germany just after World War II. I had lived through the war as a small child and I always wondered why people fight one another. We have common problems, let’s sit together. Cooperation instead of confrontation, that was always my motto. I felt, when I had the opportunity, that I should create a platform where people can interact and can really address their joint issues, joint problems, and can find solutions.

• A lot of the criticism that globalisation has come in for has been rooted in anti-Americanism, particularly after 9/11 and George Bush’s statement, “You’re either with us or you’re against us.” This convergence, this identification of globalisation with a kind of crass Americanism, has been a problem, hasn’t it?

Well, first, the United States is a great nation; it has given a lot to the world. I am also very pleased with the improvement of India and America’s relations. But if you are against something, you have to emotionalise. And globalisation is something very abstract. Everyone interprets it differently. So there’s anti-capitalism and, of course, why not anti-Americanism as well? It’s so easy, if you’re looking to stimulate negative feelings. I feel, however, that we live in a world where we are all autonomous; we should choose our own lifestyle.

• But has anti-Americanism made your life difficult? Or, tougher, has George Bush made your life difficult?

Not at all. We are here in order to explain. We have had great delegations at our events from the United States; in 2006, we shall have a very comprehensive delegation. We are here to explain. You may not be in agreement with someone, but the World Economic Forum is a platform where you come, you explain, you listen and, possibly, you understand better.

• A United Nations of ideas where nobody has the veto?

And where everybody has goodwill. That’s also important. I’m very often asked what is the difference between the World Social Forum and the World Economic Forum. The World Economic Forum is independent, neutral; we feel there should be interaction. We do not want to sell a specific philosophy. We say we fight for a better world, but we don’t say we fight for a different world.

• I think many would dispute that. They would say you are selling a global capitalist philosophy.

Which is completely false. If you look at what we are doing now, millions of people on the ground are profiting in some way from what we do.

• You know, Thomas Friedman was on this show and there is no greater supporter, or dreamer, of globalisation than he, except perhaps you. He said that for globalisation to succeed, America needs to be at its best.

We all need to be at our best. I’ll come back to the point you made about anti-globalisation and anti-capitalism. What we are trying to do is to develop a new philosophy where corporations know that to be engaged in creating a world that is socially and environmentally sustainable is in their own long-term, best interest.

• And you think you are succeeding?

Well, I sometimes say I am a bit like a preacher. People go out and do what they do. I am not responsible for what they are doing. But if I have transformed the opinions and the ideas of some in my community, I am happy.

• I sometimes wonder: you have heads of state, CEOs, NGOs, people from all walks of life come together at Davos and such meetings, and there they seem to agree. Then they go back and do their own thing, whether at the IAEA, or the WTO or the G-8. Do you sometimes think you would rather be running a World Political Forum as well?

I think you have to recognise your limits. What we are doing is to prepare decisions. But, in the end, the decisions have to be implemented by the leaders themselves. We do not have control. We can push, we can raise our hand and say, “That’s not how it should be done.” But at the end, it’s the individual’s responsibility.

• I believe you are going to be a grandfather soon. Tell me the two World Economic Forum stories that you will tell your grandchild.

Well, people usually assume that the World Economic Forum is a creature of only the last few years because that’s when we have become well known. Actually, here in India, we have been meeting for the last 21 years. At the very beginning of the Forum, thirty years ago, I told my secretary to call Giscard D’Estaing — he was my friend and was the brother of the French president, Valery Giscard D’Estaing. Suddenly, I get a call and a voice tells me: “I am connecting you with the president of France.” I heard Giscard D’Estaing’s voice and I wanted to talk to his brother. I was so perplexed, I hung up the phone. We were already fairly well accepted at the time, so even the French president took a call from a not very well known group.

• And you were so startled you put the phone down?

Exactly. I spoke later to the president and he said, “You are probably the only person in the world to have hung up on a French president.” But to be more serious, there was, for instance, a time when war was in the process of breaking out between Greece and Turkey. We put the two prime ministers together, I did a lot of shuttle diplomacy, and they signed a non-aggression agreement. Or the time, even before the release of Nelson Mandela, when we brought together all the key South African decision makers. Those are very special moments.

• It’s also because of how informal it is at Davos. People who come there can’t help running into each other.

And you have a different philosophy. If you meet without a tie, not like us today…

• But you wear a tie all the time. I have to do it because the summit’s on.

I know, but it’s very much a question of your attitude. What we do in Davos is to remind people that today you have to have different levels of identity. You cannot just say, “I have an anti-globalising attitude.” You need a local identity because you are rooted locally; you need a national identity because that’s where your pride comes from; but you also need a global identity because we are each dependent on the other. So we have to solve issues together.

• And, unlike Mr Chavez, we don’t have so much oil and so few people.

That’s right. But you have human resources. At the end, it’s about human resources.

• And I’m sure there’s an India story you’ll also tell your grandchild. You first came here in 1983. I’m sure you’ve seen change.

I think the change has been tremendous, and I think it’s been mainly in mindsets. If I were to describe it in terms of colours, when I came here in the early ’80s and ’90s, everything was in black and grey. Now it’s all very bright. I think there is an optimism, a we-can-do-it attitude.

• Klaus, I know you don’t like comparisons, so I won’t ask you to make an India-China comparison.

But you may. I have an answer and an opinion about it.

• Sure. But let me start by asking what are the lessons that India can learn from China and what are the lessons that China can learn from India. Let’s be even-handed. Or, rather, let me be even-handed.

I wouldn’t necessarily put it in this framework. I would say that, twenty years ago, China and India had the same GDP, the same economic status, the same per capita income, more or less. Now, it’s twice in China. What has happened is that China embarked on a sustainable growth curve of more than 9 per cent over the last twenty years. India has to catch up. But, if we look at the long term, India has a number of factors which will make sure that at the moment when China is levelling out on the growth curve, India will continue to have a dynamic growth. Demographics — a young generation, a creative generation — and democracy, which, I think, helps to make things much more sustainable, more balanced.

• The other way of putting that question is: can India catch up, in spite of its politics, and can China maintain this because of its politics?

We’ll have to look at the history books in twenty or thirty years. I am very confident that China can continue for many, many years to grow at the present rate. But I am also convinced that India can do it and can achieve 8 per cent and beyond. And I think it’s very, very important, it’s very important to show the world. We have now a discussion in the world which in some way creates a polarisation between democracy and economic efficiency. I think, for me, the example of India is so important to show the world that you can reach 8 per cent and beyond economic growth, you can solve your social issues despite, or because, you are a democracy. And a well-functioning democracy.

• So maybe a simplistic way of putting it is that India needs to learn some economic pragmatism from China and China needs to look at some lessons in democracy?

I think what I try to refrain from doing, because I know so many countries, is to give lessons. I think every country has to go its own way, in terms of the aspirations of its own people and in terms of its own resource composition. I am confident for both countries, India and China, and I am sure that both will be (among) the three or four top economic and political powers fifty years from now.

• Well, Klaus, you’ve done a great job of promoting these ideas in India, and one evidence of that is the Great India show that’s coming up this year at Davos. I believe India is one of the themes there. So, congratulations, and keep on doing better and better, keep on coming back, keep on reinventing yourself and the World Economic Forum as time passes.

Thank you. I will.