My black leather snow boots crunched through the snow as I walked down the road. Each breath expelled turned white and drifted back onto my face. It was early morning, and still dark. Looking at the Alps, I could see the first hints of dawn at the edges of the mountains. But the cobalt sky still had a navy-blue darkness overhead, and a white crescent moon sat quietly on the side, a small presence in the blue expanse. Walking down a hill to catch a shuttle bus, I realized that I was back in Davos.

The WEF Annual Meeting (Davos) was held from January 26 to January 30 this year. Uprisings were taking place in Egypt, following those in Tunisia, partly because of the rising prominence of social network. The new world order was being created with the rise of emerging nations such as China. Headlined “Shared Norms for the New Reality,” this year’s Davos 2011 sought to explore common standards in response to these new realities.

The Forum was somewhat unprecedented this year, with an unusually large number of heads of states in attendance. President Dmitri Medvedev of Russia took the platform immediately after Jose Carreras, the opera singer showed off his beautiful voice. The Forum began with all participants standing and offering a silent prayer to mourn the victims of a terrorist attack on the Moscow airport, which occurred just before the conference. Opening with the prayer may be part of responses to the “new realities”.

Frankly speaking, the speech by the Russian president was uninteresting. Medvedev just read a draft prepared by a bureaucrat, looking down. It seemed verbose and gave the impression of flowing idly. I could not feel the mettle of someone managing a global power. I left early, as did many other participants.

In Davos, participants evaluate leaders in this way. They evaluate the countries with the leaders’ capability, the companies based on the leaders’ ability. Share prices shift and exchange rates fluctuate as a result. Public opinion also swings as the media listen to and report the leader’s words. What the leader says naturally affects diplomacy in the subsequent period. The Davos is a place where leaders gather and convey their messages. An official U.S. telegram, leaked by Wikileaks, asserted that Russian Prime Minister (Vladimir) Putin is Batman to President Medvedev’s Robin. As I listened to the President’s hollow speech, I found the metaphor quite apt.

British Prime Minister David Cameron spoke the next day. He has been a Davos regular since his days as an opposition party leader. I saw Cameron in Davos last year and predicted he would definitely become prime minister.

As for the impression he made on me, let me quote my own words from a column I wrote for this blog last year titled, “WEF Annual Meeting 2010 in Davos 2010 – Part 6: Scenes from the Third Day at Davos”. “Cameron demonstrated a presence beyond what I had imagined. Although he chose his words carefully, he clearly emphasized what he needed to. He possesses intelligence and charm. I felt that he would almost certainly become the next prime minister of the U.K. this year. As I had expected, European political leaders are well accustomed to speaking on the big stage.”

Last year, Cameron was a panelist. This year, he was assigned to speak alone, given the honor of a keynote address. Cameron talked to his audience enthusiastically, ignoring his speech draft most of the way.
“Entrepreneurship is important. Venture capital in Europe is only one-seventh of that of the United States. Innovation and economic dynamism are essential. Britain has made growth its top priority. We believe we must sacrifice social security to achieve this goal. It’s not easy, but there will be no future unless we do that. We will not cut our education spending.”

His words were very clear. Britain will aim to achieve growth even at the cost of its welfare. Entrepreneurship is essential for this. I believe Cameron was the first leader of an advanced nation to refer to venture capital, suggesting his strong commitment to the goal. Cameron handled a question-and-answer session by choosing questioners from the floor by himself. He had a great deal of confidence in himself, I thought.

During the session, a Chinese participant asked Cameron: “You mentioned China ONLY once in the course of your speech. What do you think of China?” After answering this, Cameron used the number of times he refer to each country as a joke, when Indian and other participants asked questions In Davos, the quality of participants is also evaluated, in addition to that of leaders. Prime Minister David Cameron was more dynamic than I had expected.

Following Cameron, U. S. Treasury Secretary Tim Geithner took the platform. President Nicolas Sarkozy of France and President Susilo Bamgbang Yudhoyono of Indonesia (the chair country for the ASEAN) had spoken on the previous day.The lineup of national leaders in attendance reflected their shared understanding that Davos is an important occasion.

I could not find energy or weight in what Geithner had to say. I figured he was smart, but I also thought he lacked experience. He has a young face, and gave me the impression of putting all his cards on the table by displaying his emotions easily. Geithner did not deliver a speech; rather, he spoke at a session that took the form of a one-on-one interview.

Questioner: “Standard & Poor’s recently downgraded Japan’s credit rating. What do you think about this?”

Geithner: “I don’t want to talk too much about other countries. It is impossible to make a comparison because Japan is a country with large savings. The challenge for Japan is achieving growth.”

Questioner: “How can a country achieve growth?”

Geithner: “To achieve growth a country needs the following three conditions: (1) good education systems that allow it to turn out excellent leaders; (2) research and development that facilitate innovations; and (3) investment in appropriate fields.”

And so the interview went on. Geithner’s basic approaches to growth and finance were clear. But whether or not he could work effectively in negotiations with a tough Congress and a hard-nosed China was unclear. His words left me somewhat uncertain of his abilities.

A speech by German Prime Minister Angela Merkel began in the late afternoon. Speaking in German, she made a strong impact on me. The hard-hitting sounds of the language may have been part of the reason. Merkel did not read a draft. She used only memos to communicate her ideas powerfully to the audience. She made almost no reference to Germany in the course of her speech. As a leader in Europe, she talked about problems in the EU and issues surrounding the euro, and discussed challenges on a global scale from her position as a world leader. Merkel was fully aware of her role.

“The euro is the EU. If the euro fails, Europe will fail,” she stated. “There is no currency problem in Europe. The only problem that exists is debt.” Merkel urged countries that have introduced the euro to rebuild their fiscal standing and expressed her determination to defend the currency. It was apparent to me that Merkel had traveled to Davos to send out this message.

While listening to her speech, I checked Merkel’s dress, hairstyle, makeup, and the like. I had never seen a female leader like her who didn’t worry about fashion at all. Her appearance was as efficient as the substance of her speech. Merkel was straight to the point.

Members of “Team Japan” (including Sadako Ogata, Heizo Takenaka, and Junko Kawaguchi) spontaneously stopped as they walked with the crowd of audience out of the hall, and began exchanging their impressions following Merkel’s speech. It was an impressive scene. One worry that we all shared in common was Japanese Prime Minister Naoto Kan’s speech, scheduled for the following day.

After listening to speeches delivered by European leaders, namely, French President Sarkozy, British Prime Minister Cameron, and German Prime Minister Merkel, I understood clearly why Germany is exercising leadership in the EU at the moment. Merkel’s policies had clear objectives and a philosophy. She seemed to be sorting out in her head what is right and what is wrong. I felt that Merkel could stay consistent at all times because she makes arguments and decisions based on these clear principle. This total consistency of Merkel would cause other heads of states to flinch from time to time, I imagined.

A session with Bill Clinton began later that day. I thought Clinton was the most inspiring speaker of the leaders I had listened to date. The audience clapped each time Clinton paused. He might have looked like the savior of the United States, as the US experienced an erosion in self-confidence. The applause was not unanimous. It was scattered. Undoubtedly, the claps were from the U.S. participants.

In the meantime, what George Soros said in a panel discussion was very easy to understand. “There are two types of imbalances in the world. The first type is the global imbalance, such as the one between the United States and China. The second is the imbalance in the euro zone.”

“There are two currency systems in the world, the international system and the Chinese system. China’s success is based on the undervalued currency. China’s policy against renminbi revaluation is a mistake. Inflation is already out of control in China.”

In the meantime, the response offered by senior Chinese government officials often missed the point. “China’s success is based on the diligence of the Chinese people, not because of its undervalued currency.” This remark invited derisive laughter from audience members. The audience was looking more critically at China this year. I would like to explain the reasons for this attitude in my third column on the Davos 2011, titled “National Presence.”

George Soros’s final words were as powerful as his other remarks. “There is an imbalance, but it will be solved if China makes the transition to a floating exchange rate system. Then, the renminbi will shoot up like a rocket, then the imbalance will be corrected.”

Kevin Rudd, the former prime minister of Australia currently serving as the country’s foreign minister, was another leader at Davos who left a lasting impression on me. Japanese Prime Minister Naoto Kan also received favorable comments, by expressing his personality..

Davos also functions as an exhibition of global leaders, who are assessed by the participants. I visit Davos every year with a personal mission of “finding great aspects in global leaders and ways to bring myself closer to them.” I say “wow” in excitement when I come across a brilliant leader. I feel like shouting “bravo” at the end of such an encounter. In the meantime, I get the urge to boo when I run into a disappointing leader. If that is the case, I end up leaving my seat early.

Davos offers me an excellent opportunity to find great leaders and learn many lessons from their ideas. And the way they speak and behave, and Just as I had expected, Davos gave me many moments of excitement and inspiration once again this year.

February 2, 2011
Yoshito Hori
At my house in Sanbancho