Klaus Schwab, founder and Executive Chairman of the World Economic Forum (Image: AP/Markus Schreiber)

It’s Davos time again, with the world’s premier neoliberal circlejerk kicking off today Swiss-time at the so-called “World Economic Forum”.

Australian taxpayers are shelling out tens (if not hundreds) of thousands of dollars to send Mathias Cormann, Simon Birmingham and Steve Ciobo and assorted support staff to the gathering. Why this farce is taken at all seriously has never been explained — The Guardian even has a liveblog about it, although admittedly The Guardian would liveblog the opening of an envelope.

Actual dissent in the media is rare, even as the gulf between the glitterati on the Swiss slopes and the occupants of planet Earth becomes ever more apparent; Judith Sloan rightly delivered a serve to the “Davos club of elites” and its “fawning cheer squad of reporters” today.

It doesn’t take much to expose the hypocrisy and cynicism of the WEF, and the lack of a reason why taxpayers are shelling out for ministers to attend, but too few journalists make the effort. Take the notorious “Global Competitiveness Report”, one of a series of facile “competitiveness index” reports from think tanks desperate for media attention. The WEF’s most recent one, from October, follows the pattern of recent years in lauding the Gulf theocracies. Saudi Arabia, the WEF claims:

… has weathered well the turmoil of the recent years… The ambitious set of reforms included in its Vision 2030, once implemented, will increase private sector dynamism and innovation capability in the country, currently among its relative weaknesses… its future workforce is set to be one of the most educated globally.

The Saudis, who sent a death squad to murder a media critic and dismember his corpse as part of a global program to silence of liquidate dissent, lifted two places to lift into the top 40 economies, courtesy of improvements in its “institutions”. The WEF attributed the boost in Saudi Arabia’s 2018 ranking to better freedom of the press (!), handling of organised crime, judicial independence, efficiency of legal framework in settling disputes, incidence of corruption and reliability of police services (unfortunately, not reliability of murdering people without being detected).

Indeed, Saudi Arabia ranks ahead of Australia on many of those indicators.

Or there’s the WEF’s recent Global Risks Report. The Financial Times’ Alphaville blog has done a great takedown of the report’s “methodology”. But better yet, the report highlights the utter hypocrisy of the WEF. The three biggest risks in terms of likelihood identified in the report are extreme weather events, failure of climate change mitigation and adaptation and natural disasters. The second biggest risk after weapons of mass destruction is failure of climate change mitigation and adaptation, followed by four other related environmental risks.

So let’s look at the WEF’s membership: Saudi Aramco, second biggest greenhouse emitter on the planet, is a member (indeed, a “Strategic Partner”). Pemex, seventh biggest, is a member. Shell, ninth. BP, 11th. Chevron (another “Strategic Partner”), 12th. Total, 19th. Rio Tinto, 24th. On it goes.

But when it comes to tax, the WEF goes beyond hypocrisy. Last year, it produced a report on taxation as part of a “Global Value Chain Policy Series”. The report was signed off by a representative of KPMG, which makes billions from its facilitation of corporate tax avoidance. The report demanded a “balanced approach” when it came to trying to tax profit-shifting multinationals.

By focusing exclusively on the potential tax avoidance or abuse that can, in theory, be facilitated in the context of [multinational]-controlled [global value chains], countries may erect tax barriers to international trade and international investment. Anti-BEPS (base erosion and profit shifting) measures can effectively turn into anti-FDI(foreign direct investment) and anti-trade measures. The authors have noted the risks of overimplementation of anti-BEPS measures, particularly in the context of developing countries…

It also warns of a “a tsunami of litigation with highly uncertain prospects. This may be a risky venture for tax administrations to embark upon.” A report warning countries not to try to stop multinationals ripping them off because it might affect trade and investment, and companies will litigate against them as much as possible, is the true message of Davos and the WEF: let an out-of-control neoliberal environment continue, or else.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey

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