The panel talked about political cronyism, pollution, and the need for a more robust safety net for migrant workers. But there wasn’t any talk of crisis or hard landing. Despite the fact that China is still very export dependent, defenders and critics at this session betrayed no concern about the impact that the euro crisis and slow U.S. growth could have on the Asian powerhouse.

Many economists expect China to grow at 8 percent or more this year, slowing from 9.2 percent in 2011, as authorities seek to avert inflation and ensure more sustainable expansion. China is comforted by having the world’s biggest foreign reserves, which lets it cope with weaker demand for its products. Li Daokui, Director of the Center for China in the World Economy in Beijing, and an advisor to the Chinese central bank, is sticking to his 8.5 percent growth projection this year and insists the economy, the world’s second largest, will grow by “at least 8 percent” in 2013.

Stephen Roach, Chairman of Morgan Stanley Asia and senior research fellow at the Jackson Institute for Global Affairs at Yale University, shared the optimism. The current five-year Chinese plan will be a “watershed”, he said. The shift from investment and exports to consumption leaves him positive further out into the future. “China has demonstrated it’s up to the task.”

Perhaps the biggest concern among panel members is the need to develop a safety net that can support the masses of migrant workers who head for China’s cities, struggling to make ends meet, and maintain social peace.  Housing has been expensive, leading to a bubble, and rental costs are dear. Roach dismissed talk of ghost towns. He recalled Shanghai in the 1990s, relatively empty then, booming today. “Ghost towns are built in anticipation of the people who come.” Housing has spooked the markets. “They’re expecting the worst,” he said. “They will be pleasantly surprised.”

Other problems: pollution, which will impact health and be a burden on the state; and what Roach describes as “the financial repression” created by a gap between deposit and lending rates.

But there was not a word about the value of the yuan, and it took until question time for this to be raised. So how would Chinese authorities respond if Mitt Romney wins the U.S. election and declares China a currency manipulator? “You can expect a strong reaction from the government,” Li said. He, in turn, countered that the yuan was fairly close to “equilibrium”.

Elsewhere in the Congress Center, Boston Consulting Group Chief Executive Hans Paul Buerkner described the top risk in China, India and other major Asian economies. “The biggest risk for Western companies,” he said, “is not to get engaged and worry too much about setbacks.”

The Forum’s mission

The Forum’s often-stated mission is: “Committed to Improving the State of the World.” There were moments that a few other subversives and I used to say that it was a bit like the signs you see entering a London borough: Croydon: The Brighter Borough. Sounds nice, but it’s meaningless.

I don’t think — and, in the day, I didn’t think — that’s quite fair. The Forum is truly committed to improving the state of the world, and some of the corporations that are members are wholly on board with that mission. The problem is that, for all the good intentions, and plenty of good actions, an organization that is at heart a grouping of the world’s largest corporations isn’t necessarily in the best position to improve the state of the world, particularly in an era of the Arab Spring and Occupy.

The Forum does its best to mitigate this, inviting a decent share of civil society leaders and trade unionists. But just as the academics and Nobel laureates that grace the Forum are, as one of those distinguished attendees once told me, the dancing bears at the circus, the non-corporate leaders in Davos are on the fringe, not at the center of action.

When I first went to Davos in 1993, then-Viscount Rothermere (who was the ultimate owner of Euromoney PLC, the joint venture partner with WEF in World Link, the magazine I ran) told me that the real mission of the Forum was much simpler. Don’t Offend Anyone.

What it means for the program

If your goal is to offend no one, you have a host of problems. Some are obvious. Taiwan and Tibet shall never pass your lips (WEF is hardly alone in this constraint). Plenty of rotten presidents and prime ministers get welcomed with open arms.

That comes with the territory. More difficult is the need to put corporate leaders on panels with relatively little regard to whether they have any original ideas, or any ability to talk about them. The dark, dirty secret you learn when you run the program at Davos is that the vast majority of CEOs have nothing to say. That doesn’t mean they are bad CEOs. It’s just that there is no correlation between being a successful business leader and having interesting ideas and the ability to express them.

It isn’t just people. Offending no one also constricts the range of things you can talk about. After I left the Forum, I was still persona grata for about two years. My successors running the program would solicit ideas from me. I remember developing, with considerable enthusiasm, the idea of a session called “How Much is Too Much?” It would look at whether a cap on CEO salaries, or perhaps on the multiple of those salaries to average wages, would create healthier organizations. My contention was most CEOs were more interested in power than money. Perhaps you could posit significant salaries for top executives, but taking the CEO post would mean a reduction in salary in return for power. I think most would take that deal. The session could also examine broader issues that are big for people researching the economics of happiness. Does more money mean more happiness (after a certain point, the answer seems to be no)? Is there a point that is really too much? And so on. Lots to talk about, and it’s the kind of thing that would have created a stir. That session idea didn’t go anywhere.

Not too far ahead

It isn’t just about ruffling feathers. Part of the genius of Klaus Schwab, the founder of WEF, is to recognize that his market is actually very middle of the road. There was a lot of enthusiasm in my day for having Phil Collins come to perform. If the WEF gets too far ahead of its crowd, it falls flat. The secret is to be five minutes ahead, not five months or five years.

So fast-moving events, like the beginnings of the Arab Spring one year ago, leave the Forum flat-footed. So, too, do the kinds of faint rumblings that might just turn into something significant, but could also be a bust. The Forum isn’t about weak signals or the long tail. It navigates skillfully along the tides of conventional wisdom, but with just slight deviances in the course so that there is the appearance of freshness and discovery.

I was fortunate enough to be involved with Davos in years of plenty, when we invited around 300 so-called Forum Fellows — the academics and other experts — and really tried to push the boundaries of the program (with plenty of encouragement from Klaus). After I left, with the dotcom crash and then 9/11, the Forum decided that more sobriety was needed in the program. CEOs needed to be able to show that they were coming to Davos to discuss important things, not frivolity.

I argued unsuccessfully with my ex-colleagues that it was precisely the off-the-track ideas and sessions that were most valuable in Davos. Another session on financial architecture, the Doha round, China’s rise, or networked societies would probably add very little to the discussion. But Davos had carved out a place where CEOs were suddenly tossed into a discussion on death (my all-time favorite session), the meaning of history, or endangered languages. Perhaps those could fire some disused synapses and spark something new.

Prosperity has returned to Davos and the Forum. The staff of the Forum has grown at least threefold. There’s a decidedly engineering-like approach to building the program now, with a cascade of agenda councils and meetings. I was, and am, more attuned to artisanal production. To my eyes, all the additional resources and grand processes has just pressed the program flatter and flatter. Davos continues to attract absolutely extraordinary people. But they are forced into discussions where the unremarkable is the norm.

Outside the Congress Center

When I first became involved with Davos, Maria Livanos Cattaui was the power behind the scenes, the ferocious number two to Klaus. Maria had the licence, or so it seemed, to be tough with the corporate members. The number of events and the scale of events outside the Congress Center were strictly controlled. WEF had the conviction that once you let outside events grow, it would diminish what happened inside the Congress Center.

Maria was brutally removed in 1996 and replaced by Claude Smadja (who was brutally removed himself five years later). That tough line on outside events remained largely intact. But the tenor of the age — the go-go years of the late 1990s — began to erode that policy. Big outside parties began to proliferate. More and more started to happen outside the Congress Center. Part of the core philosophy of the Forum — that if you had a white badge, you were equal and welcome to attend everything — began to crumble.

I’m ancient history, and I haven’t been to the Annual Meeting since 2002. But friends that continue to go tell me the corporate takeover has accelerated dramatically in recent years. Bigger, more elaborate events happen outside the Congress Center. There are more and more class distinctions, even if you have a white badge.

All that said, Davos remains a wonderful privilege. If I were ever invited again, I’d be on the next plane to Zurich (fat chance, I know). I had some of the best experiences of my life working on Davos, fighting against the constraints and trying to make something out of the fantastic raw materials at hand. I recognize the limitations, but I continue to wish that WEF aimed higher.

This post originally ran on DavosNewbies.com.

Nearly half of the world’s population lives on less than $2 per day. I was recently in India, where I got to see firsthand what this means. According to the latest estimate from the World Health Organization, there are more than 835 million people across rural India — more than twice the entire population of the United States. Only 35 percent of these people have access to essential medicines. For those of us in the developed world, this is a seemingly unimaginable gap.

As CEO of a global healthcare company, I believe it is critically important to help improve the health of people everywhere by expanding access to medicines in a sustainable way. However, there are many obstacles to delivering care in developing countries, and overcoming them requires adapting to local needs. Poor infrastructure, poverty, inadequate sanitation systems, unclean drinking water and a lack of trained health workers all compound the problem. The question is: With problems so large, how can we be part of the solution?

At Novartis, we realized it was important to take a step back and consider not just how we can enter a market but also how we can adapt to better consider local conditions. We saw that there was a need for a new model in emerging markets like India. That is why we developed Arogya Parivar, meaning “healthy family” in Hindi. This is what we call a “social business” model, meaning it blends corporate citizenship with entrepreneurship.

While many have highlighted the cost of medicine, there is not enough emphasis on solving the associated distribution and social challenges. Arogya Parivar addresses what I believe are the two most important issues in developing countries: healthcare education and infrastructure. The program works by recruiting and training locals to become health educators and tour villages, schools, and health centers. They conduct community health meetings and talk directly to patients about disease prevention and encourage them to seek timely treatments. Also, the local teams address the infrastructure issue by organizing health camps — mobile clinics that provide access to screening, diagnosis and therapies to patients in remote villages who don’t have regular access to healthcare. In 2010, we hosted more than 3,000 health camps, reaching an estimated 140,000 people.

To make treatments more available and affordable, we also sell over-the-counter medicines in smaller packs with doses for only one to three days. While patients need to purchase the packs more frequently, one local doctor mentioned that this helps them better track a patient’s compliance and helps keep weekly out-of-pocket costs low. Importantly, this initiative turned profit-positive this year after four years of losses. This is critical for its sustainability.

Our model is based on the understanding that access to medicines in the developing world is bigger than a pricing issue. Insufficient infrastructure and lack of healthcare access are larger problems that need to be addressed. What is needed is entrepreneurship that creates jobs, expands access to health education and works closely with patients in the context of local customs. Health solutions must be tailored to meet diverse local needs.

Since launching the program in 2007, we have improved access to medicines for more than 42 million people living in 33,000 villages across 10 states in India. We are currently rolling out similar models across Asia and sub-Saharan Africa, and our aim is to reach more than 100 million people.

However, there is so much more to be done. This is a vastly untapped market with serious needs. While business models like ours can make an important difference, we have to find ways to work with governments and NGOs to improve health and infrastructure. Together, we can make a difference.

PHOTO: Javed Sheikh, 61, is helped by his daughter as he washes hands outside their house in a slum area on the outskirts of Mumbai, October 29, 2011. REUTERS/Danish Siddiqui

Exuberance over technology and venture capital was almost limitless back in 2000, thanks to the seemingly limitless rise of the tech stocks. Dotcom startups were all the rage. When Japanese Internet mogul Masayoshi Son finished one panel, he was assailed by a gaggle of entrepreneurs waving business plans for him to peruse. In full disclosure, this columnist two weeks later signed up to establish the online financial commentary business that eventually became Reuters Breakingviews.

Coming back to this gathering 12 years later is a Rip Van Winklerian experience. The old world and its little worries look positively quaint. Back then, at what in retrospect proved to be the height of the Great Moderation, business was booming, the Nasdaq still had another 20 percent or so to climb, companies were merging like mad; everything looked rosy. President Bill Clinton parachuted in to give a victory lap. Even the demonstrations that took place against neoliberalism and world trade now look quaint. Defacing a McDonald’s is a far cry from overthrowing governments.

The economic moderation turned out to be built on financial excess. That AOL deal – hailed as visionary by all the delegates of 2000 – has become the poster child for foolish corporate finance. The Nasdaq is a third lower than 12 years ago (before adjusting for inflation). And the banks – what can I say? From triumph to tribulation.

The political world also looks much more treacherous. Geopolitics has not yielded to the irresistible forward march of free market capitalism, and peace no longer looks like something to be taken for granted. The 9/11 attacks spawned wars in Afghanistan and Iraq – the kinds of conflicts that in 2000 were supposed to be a thing of the past.

The World Economic Forum has changed with the times. The rise of the BRICs has brought greater diversity to the audience, which is a good thing. It has also brought many more people – so many, in fact, the organizers have expanded their caste system. There is now a dizzying number of different badges, each offering differing levels of access and status. It’s much easier to be here and still be excluded from the elite – much like the feeling of many of the world’s dispossessed.

The most striking difference, though, is in the increased complexity and severity of the questions confronting the collection of top business people, politicians, investors and academics. Europe’s sovereign debt crisis keeps trundling forward, bringing to the fore thorny challenges to sovereignty, the role of central banks and the solvency of nations. Instead of Clinton smiling from the podium, this year’s keynote address came from the troubled German Chancellor Angela Merkel, the leader with the most cards at the debt crisis table.

There are still scenes of the excess and celebrity that accompany a gathering including many of the superrich. Some members of the elite have lost out in the last few years, but there is still more than enough wealth at the top to provide good times. Still, the specter of nearly a quarter-billion people around the world without gainful employment keeps a lid on the festivities.

In retrospect, the tone of triumph was not merely unjustified – it was also harmful. Many of the seeds of the economic and financial crises that followed during the next decade were sown around that gathering. It would have been a struggle in 2000 to find any delegate arguing against the deregulation of the global financial services business. Then again, everything is easy to judge in hindsight – even for a Rip Van Winkle in the Swiss Alps.

PHOTO: A participant watches a session at the World Economic Forum (WEF) in Davos, January 27, 2012. REUTERS/Christian Hartmann

At the same time, employees around the globe are increasingly subject to non-communicable diseases – primarily cancer, heart and chronic pulmonary diseases, and diabetes. Many such diseases have their root in obesity or tobacco use, and thus to a large extent are preventable. Worldwide, non-communicable diseases cause an estimated $2 trillion in losses each year in economic activity, as well as the premature deaths annually of 18 million people still in their productive years. That’s why the World Health Organizations tags such non-communicable diseases as “the world’s biggest killer.”

For the past two years, the Workplace Wellness Alliance has been tackling the problem. Triggered by a call to action during the 2010 World Economic Forum, this consortium began with 13 companies and now has more than 100 major global employers representing 4.5 million employees worldwide, all dedicated to ensuring that – regardless of country or industry – optimum employee wellness is a priority in the workplace.

As the consortium has grown in size, so has its influence. In fact, the corporate social responsibility newswire CSRwire recently named the rapid growth of the Workplace Wellness Alliance as a “Top 10 CSR Moment of 2011.”

Specifically, the Alliance is helping establish a global standard of wellness – through metrics and best practices contributed by its member companies – to improve workforce health and productivity. Already, it has collected homogeneous health metrics from more than 150,000 employees across 20 global companies. These will help establish a measurable global workplace health baseline and provide the structure, tools and processes essential to maximize efforts against chronic diseases. It also has established a database of real-life case studies that describe successful workplace wellness programs.

It’s a critical effort. In the U.S., chronic illnesses affect more than one in three workers, with treatment costs accounting for about 75 percent of our national healthcare spending annually.

The consequences are equally dire elsewhere. In the Russian Federation, every employee on average loses 10 working days a year to chronic disease and injury. In the United Kingdom, the cost of mental ill-health to employers was estimated at 25.9 billion British pounds in 2006.  The societal implications are far-reaching as well. In Taiwan, if you’re diagnosed with diabetes or cardiovascular disease, your chances of being hired are reduced by 19 percent and 27 percent, respectively.

Making progress against the problem, as the Workplace Wellness Alliance is doing, can make a real difference. A recent Harvard-led analysis of 36 workplace wellness programs found that for every U.S. dollar spent on such initiatives, the average return on investment is $3.27.

The Alliance is pursuing several initiatives to help employers. On the technology front, it offers an app that provides a quick way for companies to estimate potential savings from employee wellness programs. The tool estimates their company’s current healthcare costs and costs of productivity losses from prevalent health conditions. Then it calculates savings by asking users to select behaviors to target in a simulated wellness program.

Another tech offering is a behavior change tool from Stanford University that helps employers design solutions to achieve the desired health changes. And the real-life case studies the Alliance provides online at its website, www.alliance.weforum.org, describe workplace wellness programs that can prove useful in other organizations.

In the Philippines, Nestlé set up a holistic set of behaviors, including physical activity and nutrition, as part of its “I choose wellness” program. Within two years, nearly 1,200 program members had lost more than 2 tons of body weight in total.

At Humana, in partnership with Discovery Holdings Ltd., we recently launched HumanaVitality – a wellness and loyalty environment that features a wide range of well-being tools and rewards that are customized to the individual member’s needs and desires. And in September, in partnership with the World Economic Forum and World Health Organization, Humana helped organize the world’s first “Wellness Week” to inspire people to take a more active role in their health. Situated at Columbus Circle near Central Park in the heart of New York City, the Humana Wellness Week tent featured a bike-sharing program, individual health screenings, and a “smart bike” prototype that takes biometric measurements and offers health recommendations to riders in real time.

Over time, the Workplace Wellness Alliance is dedicated to creating a ”business case” for employee well-being that is just as compelling, and measurable, as the business case for an acquisition or a new-product launch. Faced with the health challenges of the 21st century, the achievement of this milestone will benefit not just employees and their businesses but the whole of global society.

PHOTO: A doctor checks the blood pressure of a patient at the J.W.C.H. safety-net clinic in the center of skid row in downtown Los Angeles, July 30, 2007. REUTERS/Lucy Nicholson

George Soros: Well, look, either you’ll have an extremist conservative, be it Gingrich or Santorum, in which case I think it will make a big difference which of the two comes in. If it’s between Obama and Romney, there isn’t all that much difference except for the crowd that they bring with them. And that’s not very encouraging on either side because Obama’s administration is a bit exhausted — a lot of the talent has left — and the Republicans would have to, or a Republican candidate would have to, bring in probably an extremist vice-president.

George Soros: Well, that is the big difference, and that has led my hedge fund community to abandon Obama in favor of any Republican because they don’t like to be taxed. I personally believe that when it comes to policy, you shouldn’t be pursuing self-interest, but the public interest. And I think that the income differentials are too wide and ought to be narrowed.

Chrystia Freeland: Are you one of Lenin’s useful idiots?

George Soros: Pardon?

George Soros: Well, I suppose so. I am a traitor to my class.

Chrystia Freeland: Thank you very much, Mr. Soros. Fascinating, enlightening as ever.

George Soros: And a pleasure. Thanks.

Read more of Chrystia Freeland’s interview with George Soros here.

DISCLAIMER:

In the conference calls upon which Event Transcripts are based, companies may make projections or other forward-looking statements regarding a variety of items. Such forward-looking statements are based upon current expectations and involve risks and uncertainties. Actual results may differ materially from those stated in any forward-looking statement based on a number of important factors and risks, which are more specifically identified in the companies’ most recent SEC filings. Although the companies may indicate and believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate or incorrect and, therefore, there can be no assurance that the results contemplated in the forward-looking statements will be realized.

THE INFORMATION CONTAINED IN EVENT TRANSCRIPTS IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY’S CONFERENCE CALL AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE CONFERENCE CALLS. IN NO WAY DOES THOMSON REUTERS OR THE APPLICABLE COMPANY ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION  PROVIDED ON THIS WEB SITE OR IN ANY EVENT TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY’S CONFERENCE CALL ITSELF AND THE APPLICABLE COMPANY’S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

Click here to view the embedded video.

George Soros: Yes. I would like to.

George Soros: Yes.

Chrystia Freeland: If they’re so smart, why are they doing something that you think makes so little sense?

George Soros: You look at it from their point of view. They have the most successful economy, so why can’t the rest of Europe be like them, right? It’s a very reasonable argument to make. Unfortunately it’s false because you have a closed system, the euro clearing system, where Germany is a constant creditor. Well, you can’t have everybody be a creditor in a closed system. For every creditor there has to be a debtor. The credits and the debits have to be balanced out. So the Germans are asking the impossible. It happens to work for them, and so even as Europe is pushed into a deflationary debt spiral, Germany will do relatively better than the others. Germany will continue to rise, and the heavily indebted countries that have to pay heavy risk premiums will actually be, and are already, in a recession. So the balance of trade, or competitiveness imbalance, will continue to rise. Germany will keep on going up, and the rest of Europe — well, the heavily indebted countries — will continue to sink.

Chrystia Freeland: And consequently the Germans probably will be further confirmed in their belief that they know what to do and that their policy is correct, right?

Chrystia Freeland: Now when you talk to Germans, as I do and as I know you do, another concern that I hear from them in this whole idea of how do we rescue the euro — which I think they are determined to do, I think they are very committed to that, which is new –

George Soros: Yes, yes.

Chrystia Freeland: — is a concern that they will be taken for a ride by the weaker European economies. I think they are very concerned about soft budget constraints, and they are very worried that any rescue system has to protect them against a continued sort of spendthrift policy by Southern Europe. And don’t you think that that is part of what Germany is worried about? And aren’t they right to be worried?

George Soros: Yes. And certainly in the case of Greece they have ample reason to have that view. And that is why you have to have a two-phase program. In the first phase, austerity so that the Germans don’t have their pockets picked. But then you still have to do something about this deflationary debt spiral. And that requires stimulus. So you do need to find some stimulus. And given the constraints — that Germany itself is tied constitutionally to a balanced budget — that stimulus has to be a European stimulus led by and advocated by Germany. And I think this ought to be spelled out. In other words the leadership ought to tell the world that that’s what they want — first austerity, but immediately afterwards some form of European stimulus which involves joint and separate guarantees for –

Chrystia Freeland: Euro bonds.

George Soros: And it’s euro bonds in one guise or another. So to go there Germany has to lead the way. And I wish they had the wisdom to actually spell it out.

Chrystia Freeland: You’ve put some faith in Europe with a $2 billion purchase of the MF Global bonds. What does that say? Was that mostly a technical trade, or is that really an expression of your confidence that the acute phase of the crisis we are going to get through.

George Soros: Well, that was of course particularly attractive. I was not responsible for that because I am no longer active in actually running the portfolio.

Chrystia Freeland: But I bet they called you up and got your advice.

George Soros: If I ran the portfolio, I would have a much larger position in Italian bonds. Because if you are facing a period of deflation and you can get a yield of 6 percent on 10-year Italian bonds, that’s a fantastic yield — which is not going to stay up there the moment things settle down. So I think as a speculation, it’s a very attractive one. But it’s a very dangerous speculation because if things go wrong, the yield could blow out to 10 percent, and you would lose a very large part of your money. So at 6 percent or 7 percent Italian bonds are a speculation. At 5 percent or 4 percent I think they would be this very, very good long-term investment. It’s one of the paradoxes which shows that financial markets are not functioning the way they are supposed to.

Chrystia Freeland: It sounds as if you are ruling out the possibility of an Italian default.

George Soros: Well, I think that it can be avoided. And if it were not avoided, it would be the end of Europe. And it would also have very negative consequences all around.

Read more of Chrystia Freeland’s interview with George Soros here.

DISCLAIMER:

In the conference calls upon which Event Transcripts are based, companies may make projections or other forward-looking statements regarding a variety of items. Such forward-looking statements are based upon current expectations and involve risks and uncertainties. Actual results may differ materially from those stated in any forward-looking statement based on a number of important factors and risks, which are more specifically identified in the companies’ most recent SEC filings. Although the companies may indicate and believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate or incorrect and, therefore, there can be no assurance that the results contemplated in the forward-looking statements will be realized.

THE INFORMATION CONTAINED IN EVENT TRANSCRIPTS IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY’S CONFERENCE CALL AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE CONFERENCE CALLS. IN NO WAY DOES THOMSON REUTERS OR THE APPLICABLE COMPANY ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION  PROVIDED ON THIS WEB SITE OR IN ANY EVENT TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY’S CONFERENCE CALL ITSELF AND THE APPLICABLE COMPANY’S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

Carlyle Group Managing Director David Rubenstein suggested in his historical comparison is that capitalism is not perfect but it’s the best we’ve got.

While the Time Davos panel, entitled “Is 20th century capitalism failing 21st century society?” acknowledged a desire to reduce inequality, there was a shrug of resignation about the way forward and an absence of solutions.

Indeed, one business member of the panel, pressed by a question from the audience, acknowledged there was only so much they could fix in a 90-minute panel. That may go to the heart of the World Economic Forum annual meeting itself: while it admirably raises the attention of complex issues by debating them with the media world watching, it can’t be expected to resolve them in this snow-capped Swiss town.

And it couldn’t in a forum like this which was, as Alcatel-Lucent CEO Ben Verwaayen grumbled, a “battle of nostalgia.”

It was an outdated debate which started in spirited form when Sharan Burrow, general secretary of the International Trade Union Confederation, accused business leaders of “losing their moral compass” and urged them to “stop the greed”.

“The right debate is about how we get the innovation and creativity we need,” Verwaayen countered. “We need to talk about innovation, real sustainability and reforms – not about corporations and greed. It’s about decision-making. We have to go for transformation. We have to talk about job creation, not job security.”

The only consensus, in fact, was on the need for enhanced education to provide the skills necessary to compete in the global marketplace for talent.

Is more regulation the answer? Needless to say, the business response was no. Rubenstein insists that capitalism doesn’t have the ability to modulate risk and reward and that it has not solved economic disparity in boom and bust cycles. The answer, then, he said, is not the need for more regulation but rather more clarity on what exists. Case in point: the taxes paid by U.S. presidential candidate Mitt Romney, whose rate is below that of most Americans. Rubenstein says Romney, and the rest of the 1%, is paying what he should. The problem is with the tax rate and not with its application. If you don’t like the law, change the law, he said to the applause of several in the hall.

There are only two options, according to Raghuram Rajan, professor of finance at the University of Chicago: one is western-style capitalism, which stumbles in countries like Spain and Greece when incumbent businesses and commercial frameworks are too protected to be competitive. While state-run models can be effective at creating jobs, as in the case of China, state corporations tend to be “miserable” at executing capitalism efficiently. While western countries have a large number of innovative companies, demand is shifting toward the emerging markets. And activity will start to move there, Rajan said.

Finally, Rajan complained the “too big to fail” argument for banks was a “travesty of capitalism”. But Brian Moynihan, CEO of Bank of America, argued that the fortunes of banks reflect the fortunes of the broader economy as they are the conduits of capital. That said, Moynihan did acknowledge some errors in the ways of bankers. “We’re running institutions differently,” he said. “We bear the scars and will bear the scars for a long time.” However, he added that he couldn’t predict whether that would keep banks from engaging in risky practices any time soon.

A bit of contrition — but no guarantees. Future Davos panels may well invoke the same Churchillian dictum to say capitalism is not perfect, but it’s the best we’ve got.

PHOTO: Visitors attend the World Economic Forum (WEF) in Davos, January 25, 2012. Picture rotated 180 degrees.     REUTERS/Christian Hartmann

In 2000, the United Nations member states, together with international organizations, challenged the world to come together to address the Millennium Development Goals, first among them being the eradication of extreme poverty and hunger. We now have but three short years remaining to meet these goals. While much has been debated about the analytics and measurements driving the goals themselves, the simple, incontestable fact is that to thrive — and in many cases to survive — we as a global society must address poverty and hunger.

The two problems are inextricably linked. And we must come together – CEOs and NGOs, those focused on increasing productivity and those focused on environmental sustainability – if we are to have any hope of being successful.

According to the World Food Program, hunger is the number one health risk in the world, killing more people than malaria, AIDS and tuberculosis combined. By 2050 there will be 9.5 billion people living on earth. Today, nearly 1 billion people are already suffering from hunger and malnutrition in some of the fastest growing regions of the world. The challenge of doubling food production by 2050 will become more difficult as key resources become increasingly scarce and a changing climate creates unforeseen obstacles.

There is broad-based support for tackling hunger, which has been a key point of discussion in leadership meetings including the G20 and the World Economic Forum as well as the United Nations General Assembly meetings. While we can point to significant strides in areas like combating malaria and access to education, the most recent Millennium Development Goals Report indicates that our progress in addressing hunger has plateaued, and may have worsened in some regions.

One of the biggest challenges we must overcome in addressing hunger is blending a technical approach to farming that increases productivity with an environmental approach that promotes sustainability. I am excited by recent advances by the private and public sectors in creating solutions for farmers that increase yields per acre while at the same time requiring fewer environmental resources — notably water, which is often so precious in developing countries. It is this type of innovation that will enable us to produce more from the same, if not a smaller, footprint on the planet. I am confident that with the right set of diverse partners around the table, we will continue to bring solutions to the farmers who feed us and provide the materials used to clothe us.

At Davos I will meet with leaders from other companies and representatives of governments and civil society groups as part of the initiative focused on sustainable agriculture called the New Vision for Agriculture Initiative. Monsanto is one of the 26 global partner companies of the World Economic Forum providing strategic leadership and championship of the initiative. This will be a great opportunity to work with our peers to build on the ideas put forward in 2011 at the World Economic Forum.

But it’s what happens after Davos that will make the difference: how we put our words and ideas into action. Throughout 2012 and beyond, governments, NGOs and my fellow corporate CEOs must pledge to keep the momentum going in combating the challenges that come with poverty.

International collaboration is critical because agriculture provides not only food but also essential commodities, services and social goods that facilitate economic growth. Bottom line: We can’t defeat poverty and hunger without all the stakeholders coming to the table and focusing on actions and compromise that result in change.

At the G20 Summit, the Bill and Melinda Gates Foundation presented a report titled “Innovation with Impact: Financing 21st Century Development,” which is essentially a road map for what countries must do to build on the progress already made in the developing world. The Gates report argues that lessening financial commitments now would irreparably damage the developing world and keeping aid commitments to it would essentially accelerate progress so developing nations will eventually no longer require outside aid. The report says that the private sector has an important role to play here too – creating the tools and opportunities for economic empowerment through the course of our work in developing nations. We couldn’t agree more, and know that many other companies that are making corporate responsibility a part of their everyday business operations agree with this as well.

Real solutions to global hunger challenges are needed now. The challenges are not getting smaller. Our company is proud to participate in this dialogue and will continue to encourage others to engage in this debate to create real change in 2012 and beyond. Let’s make a global promise to mitigate hunger once and for all.

This is an excerpt of a full interview conducted at the World Economic Forum in Davos, Switzerland. Look for the complete interview on our Davos page.