Fostering small mutual admiration club groupthink, the World Economic Forum's Davos meetings could be doing more bad than good.

While being one of the 24 Executive Directors of the World Bank, 2002-2004, I told the other 23 ED’s “If by lottery we substitute with a plumber or a certified nurse anyone of you, I guarantee we will have a much wiser board”. And of course, they did not like that too much. And of course I did not include myself among the substitutable... my ego does not allow such nonsense J

And now, when there is to be a change of the CEO, of the World Economic Forum’s Davos meetings… a gathering of experts… I wonder if it is not high time to guarantee in Davos the presence of a more diversified gathering.

Indeed what a wonderful PhD thesis it could be, to have somebody study what really game-changing or game-savings have come out of all those yearly meetings in Davos… As I see it, by fostering groupthink and small mutual admiration club mentality, Davos could have done more bad than good.

For instance having invited a couple of aspiring entrepreneurs to Davos would have allowed these to cry out:

“What the hell are bank regulators thinking of by making it even more difficult for us considered risky to access bank credit than what we already have to face? For God’s sake, the risky have never ever caused a major bank crisis, that dishonor belongs entirely to those erroneously considered very safe”.

“Why do regulators for the risk weighted bank capital requirements, assign risk weights of 0% to the sovereign and 100% to us unrated citizens? Don’t they understand that implies government bureaucrats know better what to do with credit for which repayment they’re not personally responsible for, than us private entrepreneurs?

Diversity

My letters to FT on Davos

The World or Mother Earth lacks representation

Wolfgang Münchau in “This gentlemen’s agreement fails Europe too”, Financial Times July 9, makes a good case for why Europe by splitting up the European representation in international institutions such as the International Monetary Fund (he argues that it is to preserve many plum jobs) ends up in fact with having no real representation at all.

I understand and agree with his point of view especially since it goes hand in hand with my opinion that since all the votes, and all the Executive Directors, and the Presidents, and so many of its staff are assigned on pure local considerations, it is the “international world”, the global order, or mother-earth itself, whatever you want to call it, that ends up being the most under represented party in these global institutions.

If we are going to be able to manage the global challenges it is urgent we look for means to break away from our parochial local chains. What about splitting at least 50% of the chairs at the Board among varied constituencies such as migrant workers, multinationals, media, educators, environmentalists, NGO’s, accountants, farmers, manufacturers, entrepreneurs, service providers like nurses or plumbers, and so on? Just beware, diversity is much more about life experiences and mindsets than about gender or race.

The only constituency that has currently a representation in IMF, in fact a 100% representation, is the constituency of central bankers and this need to be changed. Europe, if you must insist on naming the next managing director in the IMF then at least do the world the favour of appointing some finance knowledgeable person that has never worked for any central bank. That would provide us with much more needed diversity than just appointing another central banker based on the local consideration that he is from Asia, Africa or Latin America.

And this is no joke, incestuous groupthink is about the most dangerous limiting factor when it comes to impede clear thinking and effective actions.

The Basel Committee is just a mutual admiration club of firefighters trying to avoid bank crisis at any cost - even at the cost of growth.

A fairly reasonable petition to the European Executive Directors of the World Bank