Economics upstages diplomatic drama
By Gideon Rachman in Davos
FT
January 31 2009 02:00
The organisers of the World Economic Forum like people to get along.
The forum specialises in getting rivals and enemies to share platforms
in Davos: Palestinians and Israelis, Indians and Pakistanis, Americans
and Iranians.
But this week, the Davos consensus broke down in spectacular fashion.
Recep Tayip Erdogan, the Turkish prime minister, stormed out of a
session with Shimon Peres, the Israeli president. Angered both by
events in Gaza – and by what he saw as unfair handling of the
discussion he was taking part in – Mr Erdogan vowed never to return to
the forum.
The cosy Davos world has already been profoundly shaken by the global
financial crisis. The Erdogan walk-out also pointed to the threat posed
to the consensual tradition of Davos by developments in international
politics.
For some years, Turkey has been a poster child for the politics of
reconciliation that are promoted by the forum. It is a secular Muslim
state that is also democratic, a member of Nato and has close ties to
Israel. But there has been a growing, latent conflict between Turkish
foreign policy and public opinion in the country. Opinion polls in
Turkey have regularly revealed very high levels of anti-American and
anti-Israeli sentiment. Some of those tensions burst into the open in
the emotional performances of Mr Erdogan and Mr Peres in Davos.
The walk-out also highlighted the extent to which the conflict in Gaza
has further poisoned relations between Israel and moderates in the
Islamic world.
This development creates a tricky foreign policy dilemma for Barack
Obama, the new US president. Mr Obama has made it clear that improving
relations with the Muslim world is one of the highest foreign policy
priorities of his administration. But he has also stressed his
commitment to Israeli security and congressional support for Israel is
still strong.
The Obama administration was barely represented in Davos. The new
president sent an old friend, Valerie Jarrett, to represent him –
rather than the senior foreign policy advisers who had originally been
on the forum’s programme. But the main geopolitical issues raised at
Davos still revolved around the US.
The two leaders who topped the bill at the forum were Wen Jiabao, the
Chinese premier, and Vladimir Putin, the prime minister of Russia. Both
struck a similar note. They made appeals for international
co-operation. But they also pointed to America’s central role in the
global financial crisis and stressed the need for a multi-polar world.
On substance, however, the Russian and Chinese reactions to the early
steps taken by the Obama administration were rather different.
The Russians have reason to be pleased. They believe that a deal may be
in the works in which the Americans go slow on the deployment of
anti-missile systems in Poland and the Czech Republic, and downplay the
hopes of Georgia and Ukraine to join Nato. In return, Russia would be
asked to provide more help on other important issues – in particular,
the drive to halt Iran’s nuclear programme.
The Chinese delegation at Davos, however, were clearly displeased and
alarmed by the suggestion by Tim Geithner, Mr Obama’s newly-confirmed
Treasury secretary, that China has been "manipulating" its currency. In
public and in private, they were at pains to dismiss this suggestion
and to pin the blame for the global economic crisis on the US.
For all the drama caused by the Erdogan walk-out, the tensions between
the Chinese and the Americans on display in Davos may turn out to be
more significant in the long term.
They suggest that international economics may be the dominant foreign
policy issue of the Obama years.