WEF: What It Is And What It Does

The World Economic Forum (WEF) on Africa, taking place this month (May) in Addis Ababa is one of several regional forums that are held annually throughout the world. The regional WEFs are different from the main annual meeting held at Davos in Switzerland in that the focus is on issues particular to the region – […]


The World Economic Forum (WEF) on Africa, taking place this month (May) in Addis Ababa is one of several regional forums that are held annually throughout the world.

The regional WEFs are different from the main annual meeting held at Davos in Switzerland in that the focus is on issues particular to the region – whether this be Africa, or Latin America or East Asia.

The annual meeting at Davos is much wider in scope as it examines global economic, political and social issues. This is a gathering of some of the most powerful individuals in politics and business. Heads of government, ministers, business and civic leaders discuss issues partly behind closed doors and partly on public platforms.

The presence of so many highly influential people gathered in one place acts like a magnet to scores of other campaigning groups: often thousands of activists throng the area around the conference halls and, given the presence of an army of television, print and radio journalists, fight to get publicity for their particular campaigns.
But what is the World Economic Forum and how has it become so influential?

The idea that was to eventually lead to the establishment of WEF was first conceived in 1971 when the European Commission invited 440 heads of European businesses to a meeting in Davos, a Swiss resort town, to study ways and means by which European firms could catch up with managerial and other advances made by US companies. Klaus Schwab, a professor of business policy at the University of Geneva chaired the meeting. This first meeting was such a success that the business chiefs present decided to hold similar meetings at regular intervals. To gain a measure of freedom from the European Commission, Schwab founded the European Management Symposium (EMS), a non-profit organisation based in Geneva. The idea was to invite European business leaders to Davos each January to discuss matters of mutual benefit. One of the most influential new ideas he introduced was that corporations could only be truly successful if they took a holistic view of their activities – including the interests of their employees, the communities in which they operated and the aims of the government.

The idea was revolutionary at the time but it has now become widely accepted world-wide and has evolved into ‘corporate social responsibility’.

It became increasingly evident that a holistic approach to business could not possibly exclude politics or unfolding global events as these had enormous implications on the conduct of business.

The early 1970s were turbulent years – the collapse of the fixed exchange rate mechanism created dangerous uncertainty in global markets and rising tensions in the Middle East threatened to unleash a new era of global conflict.

In an attempt to create a neutral space where leaders could discuss vital issues openly and candidly and out of the public or media gaze, the EMS first invited political leaders to their meeting in 1974.

Start of a new era

One thing led to another. The inclusion of political leaders widened the scope of discussion and again it became clear that to be effective, the symposium would have to expand beyond its European confines. In 1976, the symposium effectively became global by inviting its first delegation from a non-European country, Mexico.

Nevertheless, the symposium was essentially an organisation for businesses. Schwab decided to give a structure to it by inviting some of the world’s largest corporations to become members. Membership was, and continues to be, by invitation only.

This period also coincided with the phenomenon we call ‘globalisation’, which was brought about by advances in technology that reduced the cost and time of travel and freight, leading to greater growth of world trade. Television and radio also brought the far-flung world to people’s living rooms and it became clear that whatever happened in a distant land had an impact on your lifestyle.

Schwab realised that his symposium could provide the missing link in an increasingly fractious world – it could work to connect previously disconnected people and provide a safe platform for the airing of views. The symposium organised the first Arab-European Business Cooperation Symposium, which attracted over 1,500 participants, including 400 from the Arab world. In 1979, the symposium moved outside Europe for the first time when it organised a roundtable in Washington DC.

The same year, the symposium invited China’s economic development commission to the discussions at a time when that country was largely hidden behind its ‘bamboo curtain’. China has participated in every event since then. The following year, the symposium held its first meeting in China.

The symposium continued to play its role as a global facilitator by inviting, for example, Indian leader Rajiv Gandhi in 1984 and Soviet premier Nikolai Ryzhkov in 1986 to meet Western business and political leaders. These meetings helped to reduce feelings of mutual suspicion that were rampant at the time and showed that different peoples had more in common than was believed.

Birth of World Economic Forum

By 1987 the symposium had acquired so much influence and credibility worldwide that it was decided to change its name to the World Economic Forum (WEF). It also became more ambitious in scope and sought to provide a platform to resolve international conflicts through personal meetings and candid dialogue.

As a consequence, North and South Korea held their first ministerial level meeting, West German Chancellor Helmut Kohl and East German Prime Minister Hans Modrow met to discuss German reunification and in 1992, South African President FW de Klerk met Nelson Mandela and Chief Mangosuthu Buthelezi in Davos. Mandela made his first speech on South Africa’s economic future under a future ANC government. This speech went a very long way to allay fears of a turn to communism and nationalisation of businesses under black rule – something that the white Apartheid administration had warned would follow democracy in South Africa. It also convinced the business community that a free South Africa would be much better for business than it was under the Apartheid regime. Corporations in turn pressured their governments to help speed up the transition.

Since then, Africa has been at the heart of many of the Forum’s initiatives which call upon their corporate members to form partnerships to help solve some of the continent’s most intractable problems such as diseases, access to clean water, poverty reduction and better governance.

Although the organisation has adapted to the changing global and political environments, it has remained true to its first principles: it is “committed to improving the state of the world”. A simple, if daunting, ambition. The Forum, it should be remembered, is a private organisation to which business and other leaders come willingly to discuss issues of mutual benefit in a cooperative rather than a confrontational manner – as is usually the case at the UN.

For Africa as a whole, the Forum has been of immense benefit and Africa, in turn, has embraced the annual meetings with enthusiasm. Perhaps more significantly, the discussions at the Forum tend to produce concrete, practical outcomes rather than the mere venting of a lot of hot air as so many other conferences produce.

As Africa settles into new paradigm of accelerated growth, it will need to forge strong and enduring partnerships with global business and learn from the experiences of others who have walked the same path. It needs to do this in a space devoid of political grandstanding and empty gestures. The Forum provides this space but how well the continent uses it will depend on the delegates invited to participate. Africa’s private sector, both large corporations and small and medium-sized companies, is key. They are the real agents of change, although they need the state to provide the suitable environment and policies to make Africa’s transformation complete.

Subscribe for full access

You've reached the maximum number of free articles for this month.

Digital Monthly

£8.00 / month

Receive full unlimited access to our articles, opinions, podcasts and more.

Digital Yearly

£70.00 / year

Receive full unlimited access to our articles, opinions, podcasts and more.