February 7, 1996 Revolt Of The Wannabes _______________________________________________ By Thomas L. Friedman DAVOS, Switzerland - As a barometer of global affairs, the annual Davos World Economic Forum is as good an indicator as you can find. The meeting brings together top industrialists and political figures from every corner of the world. Each year, one or two individuals stand out as trend-setters. One year it was Nelson Mandela, then Shimon Peres and Yasser Arafat, then Russian reformers. And that is why this year's Davos Forum was so interesting. Because this year the star - the man everyone wanted to interview - was a Communist: Gennadi Zyuganov, head of Russia's resurgent Communist Party. Think about that. The Davos Forum is the ultimate capitalist convention. It is an annual celebration of globalization - that loose combination of free-trade agreements, the Internet and the integration of financial markets that is erasing borders and uniting the world into a single, lucrative, but brutally competitive, marketplace. And who is the star but this dinosaur from the Jurassic period of the cold war. How come? It is because the business and political leaders here seem to intuitively understand that Zyuganov is the cutting edge of a new global trend - the backlash against global integration and free trade arrangements, which have created many winners but also many losers. The losers are now asserting themselves, whether it is labor unions in France, Pat Buchanan supporters in America or pensioners in Russia. The economics minister of a leading developing country confided to me that his government was desperate to become part of this new global marketplace. He and his colleagues at the top understand that in order to survive economically and attract foreign investment they have to open up their markets and upgrade their telecommunications, airports and commercial laws. But, he added, ``Half the time I am dealing with bureaucrats who don't understand this new game, and half the time I am dealing with workers who are not prepared to compete. We will join in, but it is going to be very painful for some of our people. The cost will be a lot more social unrest and fanaticism. We all have our Zyuganovs.'' Another sign of the times was the fact that the day the Davos conference opened, The Herald Tribune ran an essay by Klaus Schwab and Claude Smadja, respectively the founder and managing director of the Davos Forum. It was entitled: ``Start Taking the Backlash Against Globalization Seriously.'' Messrs. Schwab and Smadja are two of the most renowned advocates of global trade and integration. Their essay is the equivalent of the presidents of Ford, GM and Chrysler writing an article in the 1960s entitled: ``Start Taking Ralph Nader Seriously.'' Messrs. Schwab and Smadja wrote that: ``Economic globalization has entered a critical phase. A mounting backlash against its effects, especially in the industrial democracies, is threatening a very disruptive impact on economic activity and social stability in many countries. The mood in these democracies is one of helplessness and anxiety, which helps explain the rise of a new brand of populist politicians. This can easily turn into revolt.'' It is now clear, they added, that global integration and free trade are not necessarily win-win propositions. Technological advances and productivity increases at corporations don't automatically translate into more jobs at higher wages. Unless countries can help their people adjust to this new world, globalization is going to become synonymous with ``a brakeless train wreaking havoc.'' When I asked him what prompted him to write the essay, Schwab said: ``In the 19th century people thought the machine was going to destroy their life as they knew it, and today many people think that globalization is going to destroy their life as they know it. We have gotten accustomed to the idea that globalization will inevitably succeed. But I am not so sure anymore. Those of us who believe in globalization need to be more pro-active.'' He's right. And the successful governments will be those able to design the right formula of worker training programs, tax policies that create jobs and preserve resources, population controls and sustainable social safety nets to deal with globalization. The good news is that many world leaders are beginning to understand this challenge. The bad news is that no one has found the formula yet. ** NOTICE: In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. **
