Critical time for global economic pow-wow

NEW YORK - As the United States struggles to cope with its weak economy and financial scandals - including Enron - this week's World Economic Forum comes at a critical time for corporate and political leaders eager to shape the world's business agenda.

While some say the annual meeting is little more than a glorified "schmoozefest", others say there is immense potential for networking provided by an intimate - and largely off-the-record - gathering of influential people.

The line-up of business leaders heading for New York this week is top-shelf.

Heads of the world's biggest food companies, drug firms, mining conglomerates, and investment banks will mix freely with political leaders for brainstorming sessions.

"It's the logical place to make connections," said Richard Edelman, founder of PR firm Edelman.

The outcome of these meetings will, in all likelihood, not be instant. But the impact may be felt over the next few months in the form of mergers, swapping of assets, joint ventures, alliances, huge contracts, and even the creation of new markets.

"Many business ideas come out of the [meetings]," said Joanna Gallanter, founder of Venture Strategy Partners.

This year's agenda covers a range of themes including the "alleviation of poverty" to "restoring sustained growth".

But it is the unofficial pow-wows that lure the bulk of the almost 3000 guests.

"What happens informally is more important than what happens formally," said an investment banker with a top Wall Street firm.

He said there had been cases where some high-profile corporate deals were started at Davos, Switzerland, the venue of previous forums, because of chief executives meeting face to face.

"In Davos, it used to be one big boot camp. You are bound to catch up with people in your industry," the banker said.

The World Economic Forum is unusual. Dignitaries do not just speak to a room full of scribbling analysts and bankers.

Prime Ministers, Arab Princes, central bank heads, and corporate bosses leave their desks to discuss the "big picture". Even some of their frequent critics are invited.

This forum will perhaps be one of the most closely watched in its history.

The five-day conference is being held at a time when global stock markets have been far from buoyant.

The colossal corporate power of America is looking a little less confident these days with the likes of former industry standards Bethlehem Steel, Enron, and retailer Kmart Corp all operating under bankruptcy protection.

Lately, the stench of corporate scandal has increased and threatens to undermine investor confidence in US regulations.

Late last week, Kmart said it had started an internal investigation of its accounting after an anonymous letter sent to its directors, auditors and Government regulators.

Drug company ImClone Systems, said it was under scrutiny by securities regulators and the Justice Department.

That came in addition to the news that Enron's former vice-chairman J. Clifford Baxter had shot himself dead.

Enron's former chairman and chief executive Kenneth Lay and ImClone chief executive officer Samuel Waksal - whose company is accused of misleading investors about a highly touted cancer drug - were on the original list of guests for the forum.

"We have some real issues here. We are not going to talk about dotcom millions or what's up on Nasdaq," Mr Edelman said, referring to the kind of topics discussed at previous World Economic Forums when stock markets were booming.