KEY POINTS:
The world's business and political elite will hold their annual Swiss mountain resort meeting next week in the shadow of a financial crisis resulting from the sub-prime debacle.
It is a contrast from a year ago, when participants in the World Economic Forum were basking in a steady economic expansion and a private equity and takeover boom fuelled by cheap credit.
"The discussions in Davos will certainly be very dominated by the economic challenges we have at the moment - the aftermath of the sub-prime crisis, the transfer of capital from energy-consuming to energy-producing countries, inflationary tendencies," said forum founder Klaus Schwab.
Private equity groups and hedge funds were star attractions last year, but this year the sovereign wealth funds - investing billions of dollars of reserves for mainly developing countries - are likely to be the most courted participants.
Reflecting the world's changing dynamics, more than one-fifth of business executives taking part are from developing countries.
Schwab said the warnings about the fragility of the global economic system were there last year amid the general optimism, for those with ears to hear.
One of the main things the forum from January 23 to 27 offers is the ability to gather experts from a range of disciplines and from government, business and civil society.
This allows them to look at the ways issues are connected, such as how efforts to tackle climate change by encouraging biofuels can create social problems by aggravating water shortages and pushing up food prices.
Schwab said this year's meeting would assemble practically everyone of importance in the financial and economic world to discuss the challenges to the world economy.
As in the past, it will also provide a platform for the head of the G8 rich countries, this year chaired by Japan's Prime Minister, Yasuo Fukuda, to lay out his agenda for the year.
The opening session, looking at two issues facing the world, climate change and terrorism, will be addressed by US Secretary of State Condoleezza Rice.
The more than 2500 participants from 88 countries expected include 27 heads of state or government, 113 ministers, and a dozen heads of international organisations. Central bankers are also due in force.
There will be 1370 company chairmen or chief executives, with 74 of the Fortune or Forbes top-100 companies represented, including Microsoft chairman Bill Gates, Goldman Sachs chief Lloyd Blankfein and Renault/Nissan chief Carlos Ghosn.
In the past, meetings on the sidelines have been milestones on the road to German reunification and political reconciliation in South Africa.
Schwab said the 2008 meeting would provide an opportunity for Israeli and Palestinian politicians to get together informally.
The forum has looked top-heavy with participants from the United States and Europe in the past. This year the publicity highlights those from developing countries, especially executives from China and India.
But that also reflects a shift in power, as weakened US financial institutions seek capital infusions from developing countries, and developing country businesses bestride the world with growing confidence.
- Reuters
