Davos uncovered: What really goes on at the Alpine power-fest

Partying, schmoozing, skiing - not to mention putting the world to rights. The great Davos talking shop is like no other conference on earth. But how did it acquire such lustre? And where exactly do you land your helicopter? Jeremy Warner joins the global power-brokers on their favourite winter break

For nearly all of the winter, Davos is just another Swiss ski resort, albeit quite a chic one. Once known mainly for the sanatoriums that treated well-heeled sufferers of tuberculosis and other lung disorders, it also enjoys some literary status as the backdrop for Thomas Mann's classic novel, The Magic Mountain.

But for five days a year, Davos becomes something else entirely - nothing less than the epicentre of global power. The world's business and political élite descend on the town to attend a conference that, for the quality of the contacts it offers and the ideas it airs, makes it unsurpassed on the international calendar. Then there are the parties and dinners, not to mention the opportunity to work off the night before with a morning on the slopes. The World Economic Forum is the greatest talking shop on earth - and at $50,000 (£25,000) a pop, it has to be.

The growth of the event since it was founded in 1971 as the brainchild of a Swiss economics professor, Klaus Schwab, is extraordinary. From small, quite private beginnings as a way of bringing business and political leaders together to establish common ground and objectives, the 2007 WEF that starts today is a full-blown media circus that companies and countries alike unashamedly use as a marketing opportunity.

Looked at dispassionately, nobody would have believed that the WEF's eclectic mix of business, political, social, environmental and religious talking points could possibly work. Why would a business leader, except perhaps out of curiosity, be interested in water shortages in rural India, for example? Yet the opportunity to bask in the reflected glory of the event's key speakers, to think great thoughts, and to believe, rightly or wrongly, that if you make it as far as the WEF you have entered the hallowed ground of the world's most exclusive club, works like no other.

Where else can you expect to see Bill Gates, Bono and Tony Blair on the same platform to give their own particular take on the problems of the world? If you don't fancy it, you can always attend a session on the latest science around cancer, or on the business response to the growing number of heatwaves.

Even the conference's pioneering format of plenary and break-out sessions, mad and chaotic in some respects, now writes the script for every self-respecting business conference in the world.

Yet perhaps Professor Schwab's greatest masterstroke has been to ride the globalisation agenda. He didn't invent it, yet the WEF, perhaps more so than any other organisation, has helped to define it. One of its leading institutions, the World Trade Organisation, also sprang from an idea born in Davos on the need for a global policeman to ensure fair play in the development of trade between nations.

The buoyancy of the mood of the WEF that starts today has perhaps never been more noticeable. The world economy is heading for its fifth successive year of rip-roaring, above-trend growth. Confidence has rarely been higher, nor, despite the challenges of global warming and international terror, has delegates' outlook been more positive.

The merits and purpose of these meetings are perhaps open to debate. Beyond being a networking opportunity of unparalleled cachet, it is arguable whether they achieve very much, although some important initiatives in international cooperation are said to have had their origins in Davos.

Yet no other conference manages to bring together the same intoxicating list of celebrity and power from the world of business, politics, religion, media and academia. It also succeeds like no other in establishing at least a modicum of understanding between the global political and business divide. Having set the world to rights in the thin Alpine air, most business leaders will simply return to the grubby reality of massaging the bottom line - but something somewhere will have sunk in and helped to improve the dynamics of change.

This year's meeting is bigger than ever, with nearly 2,500 attendees, including around 800 of the world's leading chief executives. The event is co-chaired by Lord Browne of Madingley, the chief executive of BP, Eric Schmidt, chairman of Google, Neville Isdell, chairman of Coca-Cola, and to reflect the growing importance of the emerging economies of Asia, Sunil Mittal, one of India's leading entrepreneurs and industrialists. The likes of Tony Blair and US presidential hopeful John McCain are but two of the political draws in a guest list that also includes Bono, the Irish rock star-turned-activist, and Bob Greifeld, the Nasdaq chairman who is vying to pull off the takeover of the London Stock Exchange.

The theme reflects the zeitgeist, "the shifting power equation". And up for discussion is not only the way economic and political power is beginning to seep away from the developed West, but also the manner in which communications technology is empowering the people, and in the process undermining traditional political and media élites.

To the dismay of the largely middle-aged businessmen from 90 different countries who make up the participants, there's little in the way of a Hollywood presence this year. Angelina Jolie and Sharon Stone, past participants, are absent from what is the 37th get-together of the global great and good. That leaves more time, perhaps, for the serious stuff of how to keep the world economy rolling along at its present heady pace, and perhaps more important still, how to achieve that growth in a sustainable way.

For the world economy, the rise of China and India are providing a useful counterweight to the slowdown in the United States. Yet their growth is also provoking a rising tide of protectionism in the developed world that poses extreme dangers for the future.

For the delegates, who include familiar Davos veterans such as Bill Gates, of Microsoft, the media baron Rupert Murdoch and, for the first time, his son, James, Schwab has devised an exhausting programme that starts with breakfasts at 7am and doesn't wrap up until the midnight fireside chats with Nobel Prize-winners and Capitol Hill luminaries.

The programmed events, moreover, are the tip of the iceberg. There is a bewildering array of private parties and functions, of closed-door meetings and separate conventions. The big investment banks and business services companies come complete with back-up staff of secretaries, organisers, and public relations officers, some of them taking out entire floors in Davos's five-star hotels to accommodate their marketing and brand-building presences. It is only possible to speculate on the business deals and alliances that are hatched here.

One British CEO says he comes because he can see more of his clients and suppliers in three days than would be possible in three months of international travel and meetings. It is a claim that provides the best antidote to those already complaining loudly about the carbon footprint Davos creates by flying in so many luminaries from around the world, some helicoptered the last 50 miles to the resort and then driven around for the visit in top-of-the-range 4x4s.

CEOs attending for the first time, such as Royal & SunAlliance's Andy Haste, or AstraZeneca's David Brennan, can dip into sessions spanning topics from "Energy 2007: advancing the US Energy Agenda", which promises to draw up a checklist of "politically feasible" measures that the US government should undertake to cut back on energy consumption, to "Emerging market multinational companies: the new challengers", which will highlight how companies such as India's Mittal Steel are buying up the West. Should your average CEO have more pastoral needs, there are sessions that ask why brains sleep and whether leaders sleep less, and others that tackle depression and wonder whether CEOs are disproportionately affected by it.

Of perhaps more interest for the record 800 business leaders who have made the trek deep into Heidi country, is the opportunity Davos affords for informal networking and general schmoozing. Cynthia Carroll, the new chief executive of Anglo American, got her job after a chance encounter at last year's meeting with the mining finance group's chairman, Sir Mark Moody-Stuart. Gordon Brown, David Cameron, and the London mayor, Ken Livingstone, will all be hoping for a similar sprinkling of Davos magic as they wander the labyrinthine conference centre over the course of the next few days.

Sir Martin Sorrell, the head of advertising giant WPP, admits that the primary purpose of Davos for him is to cosy up to his clients, the great bulk of whom will be represented at chief executive level here. Who knows what Greifeld of Nasdaq might manage to cook up regarding his at-present stalled bid for the London Stock Exchange, or what two minutes in the lift between the two rival bidders for the Indian telecoms group Hutchison Essar - Vodafone's Arun Sarin and Mukesh Ambani, chairman of Reliance Industries - might yield?

Meanwhile, the welter of charities and lobby groups that were flattered into attending in the aftermath of the world trade talks debacle in Seattle eight years ago, will be hoping that the opportunity to press the flesh with the grand mufti of business and politics will help to further their campaigns.

The 30-plus contingent of trade ministers, not to mention the seven European commissioners, five US cabinet members, and no less than four British Cabinet members, can expect to find themselves mobbed at every turn.

Not that any form of mob will be even remotely tolerated at an event that proceeds with archetypal Swiss efficiency. Thanks to the 24 heads of state who will pop in at some point - including the German Chancellor, Angela Merkel, and Palestine's Mahmoud Abbas - Davos has already been cordoned off like an Alpine Guantanamo.

What's likely to be the key theme of Davos this year? For business it must remain the remarkable resilience of the world economy, which despite everything that can be thrown at it, continues to surge ahead. The present growth phase promises to break all previous ones. Yet though Davos bills itself as an agenda-setting event, it tends only to reflect the world as it is rather than what it will become.

The last time the mood at Davos was as upbeat as this was in January 2000. With the delusions of the dot.com bubble still in full swing, business leaders began truly to believe that it really was possible to cure the world of all known ills and confidently predicted an age of never-ending prosperity. Within months, the bubble had burst and a serious business downturn had set in. Soon after came 9/11, the Enron scandal and the invasion of Iraq. Events have a habit of spoiling the party. But for now, Davos is in full swing.

From Blair to Gates: who's who at Davos 2007

Tony Blair, UK Prime Minister

With the countdown underway to Blair's departure, he will not be the draw he once was. The four days' glad-handing business leaders will no doubt be good training for the post-Downing Street lecture circuit.

Bono

Davos is the perfect stage for the U2 frontman turned conscience of rock to harangue world leaders about making poverty history. Only Nelson Mandela trumps him as the man most politicians and businessmen need to photographed with so that people don't think they're evil.

Sergey Brin, Google co-founder

The search engine has eclipsed Microsoft as the world's hottest IT firm, but those seeking industry insight could be disappointed. Last year Brin did his best to turn the Google event into a bad dinner party by lecturing thirsty guests on the Middle East.

Gordon Brown, UK Chancellor of the Exchequer

After his unexpectedly busy trip to India last week, Davos offers the prime minister-in-waiting another big opportunity to present himself as a global statesman.

Lord Browne of Madingley, BP chief executive

This will be a swansong for the long-serving oil man and Davos fixture who steps down later this year. In a conference dominated by climate change, he'll be claiming credit as one of the first top businessmen to take the green lobby seriously.

Paulo Coelho, author

The doyen of new-age literature is here to explore how business is about telling a story to employees and customers - and presumably to prove that politicians and chief executives are really all frustrated novelists.

Bill Gates, Microsoft chairman

At this coming together of the haves, the world's only A-list geek is the have-most. He's here to talk philanthropy. If delegates try pestering him about software, they'll probably be told to try turning the computer off and on again.

John McCain, US senator

McCain is a seasoned summit pro, but this is the chance conference goers will have to swap business cards with the man tipped to be president in 2008. This time next year he'll be in New Hampshire trying to win the Republican nomination.

Angela Merkel, German Chancellor

It'll be hard for her to top last year when the newly elected Merkel was dubbed "Queen of Davos", but with Germany holding the presidency of both the G8 club of rich countries and the EU this year, she'll be turning heads once again.

Rupert Murdoch, chairman and chief executive, News Corporation

Now that Davos is more media circus than exclusive hideaway, Murdoch gets top billing. All 2,400 delegates know he has the power to make or break their reputations. Son James, the Sky TV boss, will also be there.

Susan Schwab, US trade representative

Normally overshadowed by her infamous neo-con colleagues in President Bush's cabinet, the gatekeeper to the US economy (no relation to the Forum's founder) will find herself the centre of attention.

Barbara Stocking, Oxfam GB director

Organisers claim it was in this Swiss retreat where corporations and campaigners were first brought under one roof and the vogue for "corporate social responsibility" was born. Corporate titans now ignore big charities, such as Oxfam, at their peril.

Susie Mesure

High times: memorable Davos moments

1990

The Berlin Wall may have fallen some weeks before the World Economic Forum met at Davos in January 1990, but Germany was still divided. And, having shattered the most obvious symbol of the Cold War, Helmut Kohl and his East German counterpart, Hans Modrow, met at Davos to take the first steps to reunifying Germany. It is a testimony to the significance of the annual Swiss jamboree that although Modrow was due to make an appearance with Kohl in West Germany to discuss reunification in February, the pair chose to start "informal negotiations" one month earlier, in the Alps.

1992

Nelson Mandela's release from prison in 1990 is rightly regarded as the defining moment in South Africa's rejection of apartheid, but his meeting with President FW de Klerk and the Zulu leader Mangosuthu Buthelezi at Davos in 1992 was enormously significant in its own right. At an electric event at the Swiss conference, the three leaders appeared, and stayed, on a stage together for the first time ever. De Klerk called Buthelezi and Mandela his "compatriots", and said that they were working together to overcome "the antagonisms of the past". In addition to the symbolic achievement, Mandela and de Klerk also started the painful process of reworking the South African constitution.

1994

Shimon Peres, then Israeli Foreign minister, left for Switzerland to meet with Yasser Arafat, chairman of the Palestine Liberation Organisation, with a word of warning. "Although I am an optimist," he said, "I cannot promise that an accord will be reached in Davos." But two days in the Alps seemed to do the trick. Arafat and Peres called a press conference where they held hands and announced a draft agreement that implemented the Gaza-Jericho peace accords. Peres had agreed (in theory) to start the withdrawal of Israelis from the Gaza Strip and Jericho. It seemed to be a landmark moment, and marked a rare moment of détente between Israel and Palestine.

2005

The star-wattage on display at Davos 2005 was blinding. Angelina Jolie melted the hearts of CEOs and world leaders. Bono drummed up some righteous anger. Richard Gere did whatever it is Richard Gere does. But Sharon Stone stole the show. As the Tanzanian President, Benjamin Mkapa, appealed for money to fund mosquito nets, the actress stood up. "I'm Sharon Stone," she said. "I would like to offer you $10,000 to help you buy some nets today. Would anyone else like to be on a team with me and stand up and offer some money?" US Senator Bill Frist, chairing the meeting, asked Stone to sit down. But he was drowned out by the sound of businessmen pledging money with her. Five minutes later, Frist said, "Sharon, you got $1m already." It was impressive, but not quite all it seemed. Although Stone handed over her money at once, only a quarter of the other pledges have been delivered.

Ed Caesar

See and be seen: the key hang-outs

Hotel Steigenberger Belvedere (above) By comparison with this five-star hotel, little of importance goes on anywhere else in Davos. Everyone who is anyone, from Tony Blair down, stays. The biggest parties and deals take place here.

McDonald's The burger outlet may be down in the socially frowned-upon Dorf end of Davos (as oppose to Platz) but it's worth a visit for the chance of bumping into Bill Gates, who used to choose his hotel based on its proximity to the Golden Arches. (And its Wi-fi.)

Parsenn The biggest mountain of the five that surround Davos, the Parsenn is the place to head for a chance to spot chief executive officers and world leaders on the slopes. Don't miss the so-called Hillary Clinton piste, famed because she was helicoptered to the top of the fenced-off slope in 1999.

Hotel Schatzalp If you fancy the chance of spotting world leaders off duty, then try this former sanatorium and somewhat faded Art Nouveau beauty, which perches 300 metres above the town. Does a mean hot chocolate.

Hotel Europe For a less pompous night-cap, try the piano bar of this Davos Platz institution, where Barry the cabaret singer will belt out Manilow and Queen covers while you finish putting the world to rights. It's said that Barry has met more global leaders than even Klaus Schwab, WEF's founding father.

Freitag InnOn the main Promenade drag, this is a godsend for CEOs desperate for a souvenir for stroppy teenagers. The hot messenger bags are designed in Zurich and made from recycled truck tarpaulins, car seat belts and bicycle inner tubes. Better than a Milka bar any day.

Susie Mesure

Get with the programme: what's happening when

TODAY: The main event of day one is at 5.45pm in Davos's main Congress Hall where Klaus Schwab (right), the father of the World Economic Forum, will introduce Angela Merkel, the German Chancellor, to give the opening address. Then it's over to the "Power Six", the co-chairmen who will steer the meeting through the next four days before the action moves to the Hotel Seehof for a dinner with Sir Nicholas Stern on the subject of climate change. The serious party scene then kicks off with the FOCUS nightcap, hosted by one of Germany's leading news magazines. Loud music and heavy drinking guaranteed, fluent German not essential.

TOMORROW: After a heavy morning dedicated to solving the world's energy needs, working out what North Korea's endgame is, and agreeing a global act to cap carbon emissions, delegates in need of some light relief should head to the Hotel Belvedere, where Anatoly Karpov, the chess grandmaster, will take on 25 opponents simultaneously. The evening's top do is also at the Belvedere; everyone will be clamouring for an invite to Nasdaq's private drinks reception.

FRIDAY: Expect the best-attended official event to be the Second Life debate at the Congress Hall when musician Peter Gabriel and others will be interviewed about the website that has swept the world. Delegates might like to grab a siesta before a night of partying that kicks off with an Essence of India cocktail reception, hosted by Infosys Technologies, one of India's biggest companies. There are more drinks dos to choose from: Citigroup, Accenture, Goldman Sachs, Merrill Lynch, and McKinsey. Over at the Kirchner Museum, Google will be hosting its own party.

SATURDAY: No lie-ins allowed for the last day. It kicks off with a power breakfast with Bill Gates, who will be talking to Tom Friedman, the author ofThe World is Flat. Then it's off to the all-day Reuters Mountain Retreat, which features a power lunch in an Alpine hut and a ski race involving the likes of Niall FitzGerald, the media group's chairman, Peter Gabriel, and Charlie Rose, America's answer to David and Jonathan Dimbleby combined. Proceedings draw to a close at a gala black-tie soirée, with food and entertainment provided by the Malay government.

Susie Mesure