By Paul Kennedy

There was a time when going to the World Economic Forum in Davos, Switzerland, was a real treat, and highly exciting. This was not just because mere academics like myself had a chance to hobnob with the world's leading bankers, business chiefs and heads of state, but also -- and most of all -- because of the almost annual political surprises that the WEF's canny maestro, Professor Klaus Schwab, seemed able to pull off. Who could not be excited by the news that the astonishing Soviet reformer, Mikhail Gorbachev, had come to the Forum; that de Klerk and Mandela were negotiating an end to apartheid in South Africa; that Yasser Arafat was in town for private discussions on a Palestinian-Israeli peace settlement? Who could not be stunned by the eloquence of Bill Clinton and Tony Blair, when they pleaded not only for global thinking but for global action?

Then the glamour faded somewhat as the annual themes became more economic, more high-tech, and less to do with the real international scene. The temporary excitement over the brave new world of and the Internet, chiefly generated by those Silicon Valley entrepreneurs who stood to benefit, looked silly during the near-collapse of certain companies a few years later. The world's only superpower, the United States, paid less and less attention to Davos, and the hasty relocation of the WEF meeting to New York City in response to the 9/11 attacks was an organizational disaster -- never have a serious conference in midtown Manhattan!

But the Forum gallantly moved on from that debacle, finding ever-newer themes -- the rise of Asia, the globalization of the firm, then the world financial crisis of 2008. Occasionally the optimism of the well-heeled conference participants was disturbed -- by, for example, the public debate with the angry "anti"-WEF representatives at their parallel meeting of the world's non-privileged in Porto Alegre in southern Brazil. The benign, global-thinking Davos panelists were shocked -- shocked! -- by the vehemence of the attacks upon all that they stood for.

And now we come to this January's meeting of the World Economic Forum. The themes were muted, and mixed, and not unimportant: reforming the banking system, adjusting trade imbalances, getting to grips with government debt, and stopping the European Union from falling apart. All this has been lovingly recorded by the world's media, especially the business press, with only a few of the smarter correspondents, like Gideon Rachman of the Financial Times, giving a sense last week that they might be in the wrong place at the wrong time.

Meanwhile, 800 miles to the south, the top blew off the tight, repressive political gasket that el-Abidine Ben Ali's regime had imposed upon Tunisia over the past quarter-century. The Arab populace had taken to the streets, angry and disorganized, eager to pull down the old order but with little idea of where they were going, like the early French revolutionaries in 1789. Within days, rumbles were heard in Algeria, then crowds took to the streets in massive numbers in Yemen, and thus another autocratic Arab regime is unraveling. And now, bang in the middle of the multitudinous Davos panels, the exclusive soirees, the Saturday-night black-tie dance party, and the Sunday morn on the piste, the most important pivotal state in the Middle East, Egypt, explodes before our eyes. Perhaps Hosni Mubarak's large and outwardly impressive army (well provided for in its armored personnel carriers and other weaponry by the Americans and the French) will crush the revolutionaries, but things will never be the same. For years, decades, scholars have been warning that the whole of North Africa was a political tinderbox, and judging from WikiLeaks documents, so had seasoned American diplomats. But was anybody listening? Was a topic like "The Collapse of the Arab World" on the Davos agenda?

One has a sense that the world's leading CEOs, bankers, hedge-fund managers and so-called "risk assessment" firms now live in their own, exclusive ancien regime environment, and that all that they can think of doing in a crisis like this is to move their money into Swiss francs, gold, U.S. Treasuries and oil futures, as happened on Friday.

But why particularly blame international bankers for their shortsightedness when it seems clear that the American government itself has been caught off-balance by the riots in Cairo and other parts of the Arab world? For the past 15 or more years, Washington appears to have lost sight of the fact that peace and stability in Egypt and its neighboring countries are infinitely more important than whatever happens in Afghanistan, and even Iraq. Cairo is the capital to one of the pivotal states of the world; Kabul is not. So, for almost a decade now, American armed forces have been pushed in the wrong direction, into the snowy mountains of the Hindu Kush, and away from the places that matter: the eastern Mediterranean and the western Pacific. Eisenhower would be amazed. Current observers of America's growing incapacity for grand strategical thinking should not be.

Idealists and human-rights organizations in the North, for whom hard-nosed, Bismarckian thinking would be regarded as a form of intellectual mutiny, will call upon us to rejoice at the toppling of autocratic Arab regimes and the coming of popular democracy. The chances of persuading them to a more sober view of things are about as lousy as the chances of persuading Davos Man that the world's future is not ever more rosy. But if "democracy" in the Arab world simply means the old, inadequate one-man-one-vote formula (in some places, women may indeed not get the vote), then the Mediterranean and Middle Eastern world is in deep trouble. For the "man on the street" in places like Yemen, Egypt and Tunisia, so far as one can judge from the courageous reporters of Reuters, CNN, the BBC and others, is deeply anti-American and uncontrollably anti-Jewish. (Little wonder that a concerned Israeli government has been taking all sorts of quiet, prudential measures regarding Egypt in the past few days.)

As happens so often, our political cartoonists seem to get it right before our internationalists, our bankers and the White House. Scott Stantis' cartoon of January 29 shows an angry mob demonstrating outside an American embassy, while inside the compound the ambassador says, "How thrilling! A popular uprising in a Muslim country unseating a despot!! What could possibly go wrong? ..." A sign on the front door says: "U.S. Embassy; Iran 1979." The Egyptian riots may not have the same miserable result as Iran's lurch from the intolerances of the Shah to the intolerances of the ayatollahs, but one should not place a lot of money upon the peaceful advancement of North Africa and Arabia. Just look at the massive slide in the value of Egyptian government bonds in the markets last week. The world's bankers have got something right -- after the fact, that is. One wonders whether any of those super-smart money managers, now sitting in the Hotel Belvedere in Davos, have ever thought of hedging against the continual rural unrest in China turning into something much more serious?

The world is a confusing, tricky place, and guessing at where it is going is a risky business. Overall, though, I feel that large parts of our planet are a lot more stressed, riven by discord and closer to implosion than the banking and investment world assumes. So, even if one is not going up the Magic Mountain to a WEF gathering, it makes quite a lot of sense these days to consider moving into Swiss francs.

(Paul Kennedy is Dilworth Professor of History and director of International Security Studies at Yale University; and the author/editor of 19 books, including "The Rise and Fall of the Great Powers.")


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