Summers at the World Economic Forum University President Lawrence H. Summers is co-chairing the annual meeting of the WEF in Davos, Switzerland this week. He is also participating in three sessions: The Big Debate: Setting the Business Agenda, Wednesday Economics of Equality, Thursday Finding Balance in the Global Economy, Saturday Check this page for updates throughout the week.

SUMMERS: "THE TIME OF GREATEST SERENITY WAS ALSO THE TIME OF GREATEST RISK"

University President Lawrence H. Summers cautioned yesterday that the booming global economy must undergo adjustments in order to ward off a major economic crisis in the near future.

Summers, speaking at the World Economic Forum, said the emergence of a U.S. economy dependent on imports—and, conversely, the rise of an export-based world economy—will require modification in order to avert a significant economic disruption.

“Sometime in the next couple of years, an adjustment will come,” Summers said, according to a transcript posted on the World Economic Forum’s website. “It will require rather more policy coordination than we have seen.”

Summers compared the current global economic state to the moments preceding the 1994 Mexican economic crisis and the burst of the technology bubble in 2000, according to The Financial Times.

“The time of greatest serenity was also the time of greatest risk,” he said, according to the newspaper.

Summers, who served as the chief economist of the World Bank in the early 1990s and later as undersecretary and secretary of the Treasury Department, expressed surprise at the sustaining U.S. stronghold in the global economy.

“When I was in government, I was fond of warning that…the world economy could not fly forever on a single American engine. Frankly, it has flown further and longer than I would have anticipated,” said Summers, who is one of four co-chairs of the group’s annual meeting in Davos, Switzerland.

Summers also addressed the “anomalous and nonpermanent” trend of capital flow from developing nations to industrialized nations. He said he attributes the phenomenon to a lack of savings and rapid consumption in the United States, which he said is “sucking capital that would otherwise be productively invested in the developing world out of the developing world."

The panel, entitled “Finding Balance in the Global Economy,” was chaired by Financial Times commentator Martin Wolf. Other participants included Palaniappan Chidambaram, the Indian finance minister; John A. Thain, chief executive of the New York Stock Exchange; and Jean-Claude Trichet, president of the European Central Bank in Frankfurt. 

Video highlights from the session have been posted on the forum's website.

—JAVIER C. HERNANDEZ, Jan. 29

SUMMERS HIGHLIGHTS GENDER GAP IN THIRD-WORLD EDUCATION

Gender inequality in developing countries can be corrected most effectively by educating girls, University President Lawrence H. Summers said at the annual meeting of the World Economic Forum in Davos, Switzerland.

"It is a terrific investment," Summers told attendees of Thursday's "Economics of Equality" session, according to a summary provided at the forum's website. He offered similar remarks in an interview last week just before the start of the forum.

While educating women increases their productivity by bringing them into the economy, it can also improve their health, promote democracy, impede the transmission of the AIDS virus, and produce better land policies, Summers said.

"In the developing world, there are 100 million women 'missing,'" Summers said. Most developing countries have a lower ratio of women to men than do industrialized nations.

In industrialized countries like the United States, gender gaps in education are to the advantage of girls, said Summers, who drew criticism last year for suggesting that "issues of intrinsic aptitude" might explain a
deficiency of women in science.

Summers has long argued that educating girls in the thirld world should be a top priority. In August 1992, he wrote a paper on the subject entitled, "The Most Influential Investment," for Scientific American.

In Davos on Thursday, Summers noted several critical statistics: In the U.S., he said, 130 women graduate from college each year for every 100 men; among African-Americans, 200 females graduate for every 100 males. Women also dominate honor roles at U.S. high schools, Summers said.

—NICHOLAS M. CIARELLI, Jan. 28

SUMMERS: "THE MAIN THING WE HAVE TO FEAR IS THE LACK OF FEAR ITSELF"

The rise of a global economy that links the world's rich and poor is destined for the history books, University President Lawrence H. Summers said yesterday on the first day of the World Economic Forum's annual meeting in Davos, Switzerland. But he cautioned attendees to focus on the turbulence that integration brings to some regions.

As India, China, and other new markets join the world economy, "the integration of the four-fifths of the world where people are poor with the one-fifth of the world where people are rich has the potential to be one of the three most important economic events in the last millennium, alongside the Renaissance and the Industrial Revolution," Summers said, according to a summary posted on the forum's website. 

Attention, however, is required of local issues that emerge from that integration, he said.

"At Davos we tend to focus, and rightly so, on issues of global integration," Summers said. "But I would suggest to you that issues of local disintegration—whether that means Flint, Michigan, whether that means failed states, whether that means struggling middle classes caught in binds everywhere—are of equal importance."

Development can also be hampered by an excess of investor enthusiasm in world financial markets, the president warned.

"You could say that the main thing we have to fear is the lack of fear itself," Summers said.

But continued global integration is "by no means guaranteed" in light of political developments like the recent Latin American elections, he said.

The session, entitled "The Big Debate: Setting the Business Agenda," brought together a panel of business leaders and academics to craft possible responses to the most significant global challenges.

Summers, a co-chair for the annual meeting, was joined by Mukesh D. Ambani, chairman and managing director of India-based Reliance Industries; Peter Brabeck-Letmathe, chairman and chief executive officer of Nestlé in Switzerland; Sir Martin Sorrell, group chief executive of WPP; and London Business School Dean Laura D. Tyson.

Video highlights from the session have been posted to the forum's website.

—NICHOLAS M. CIARELLI, Jan. 26

WALK A MILE IN SUMMERS' SHOES

At last year's annual meeting of the World Economic Forum, University President Lawrence H. Summers drew as much attention for his attire as he did for his presentations. A photographer for The Associated Press captured the footwear of several panelists at the 2005 meeting, most of whom sported traditional, black dress shoes. But Summers, prepared for the snowy conditions and freezing temperatures in Davos, Switzerland, donned a slightly less academic pair of Timberland boots (see picture at right). As the 2006 meeting begins tomorrow, will Summers go with the practical footwear once again, or will he opt for his Sunday best?

—ZACHARY M. SEWARD, Jan. 24

BEFORE THE MEETING, AN INTERVIEW WITH SUMMERS

Educating girls is "the single most important investment that can be made in the developing world," University President Lawrence H. Summers said in an interview posted on the website of the World Economic Forum today.

Summers, who is co-chairing the group’s annual meeting in Davos, Switzerland this week, lauded the social and economic benefits of female education in the interview. He predicted that greater education would lead to "smaller, healthier and happier families" if it were given sufficient support.

"The job involves assuring the necessary resources, providing for the right kinds of measurements and accountability and thinking about how cultural institutions can be marshalled to provide girls education," he said, according to the transcript.

The remarks touched on a controversial subject for Summers, who came under fire one year ago after he suggested that "issues of intrinsic aptitude" could help explain the scarcity of females in the sciences. He has since committed $50 million over the next decade to address the issue at Harvard.

According to the transcript, Summers also addressed the need for greater socioeconomic diversity at universities, saying, "There is very little danger in the US of going too far in this direction."

"We as a country have a responsibility to address that challenge and one of the best ways we can do that is by ensuring that students from all families have good access to the best colleges and universities in the US," he added in the interview.

The five-day annual meeting of the World Economic Forum is expected to attract 2,340 participants from 89 countries, including 1,000 business leaders and 15 heads of state. The meeting begins on Wednesday.

As one of four co-chairs of the forum, Summers will participate in sessions entitled "Setting the Business Agenda," "Economics of Equality," and "Finding Balance in the Global Economy." He will also attend a breakfast with other university leaders, according to his spokesman, John Longbrake.

—JAVIER C. HERNANDEZ, Jan. 23

ARTICLES & BLOGS COMMENTING ON SUMMERS AT THE FORUM

"Davos Diary: Day Two," by Red Herring
"Welcome to Silicon Valley-Meets-Davos, the annual Friday night party hosted by Accel Partners during the World Economic Forum. This year’s bash, co-hosted by Google at the Kirchner Museum, featured champagne, oysters, and a star-studded roster of guests. Partygoers included [...] Harvard University President Larry Summers."

"Harvard president warns on global imbalances," by Chris Giles in The Financial Times
"Lawrence Summers, the president of Harvard University and former US Treasury secretary, has warned that there is a dangerous degree of complacency about global economic imbalances. Commenting on the general lack of concern at the World Economic Forum about the soaring US trade, Mr Summers recalled the sense of calm that existed before the Mexcian crisis in 1994 and the bursting of the technology bubble in 2000. 'The time of greatest serenity was also the time of greatest risk.'"

"Economics and the Inevitable," by David Ignatius in The Washington Post
"My superstars at Davos this year are the university presidents. Larry Summers at Harvard, Rick Levin at Yale, Lee Bollinger at Columbia and a half-dozen more are transforming their universities into global institutions -- seeking the best students from around the world and sending them to far-flung places to learn the skills that will secure them places among the global elite. 'We want the brilliant mathematician whose mother is a chambermaid in Romania,' says Summers."

"Win-Win? Tell It to the Losers," Floyd Norris at NYTimes.com [Subscription required]
"Lawrence H. Summers, the president of Harvard University and a co-chairman of the World Economic Forum, asserts that globalization will not be derailed. 'The tide of history continues to move toward more market organization,' he told me. But, he added, 'For this to work out well, there must be more attention to local disintegration even as we work toward global integration.'"

"Educating girls in poor countries," by Assistant Professor of Physics Lubos Motl
"Many people believe that there is a lower bound for the percentage of intelligent and/or educated people in the society above a certain cutoff that are necessary for the society to kick-start a growth curve and the girls in the poor countries seem to be the single most underappreciated group."

"Davos Diary," by The Financial Times
"A year after he was embroiled in a row over his musings that biological differences might explain a paucity of senior women scientists, Lawrence Summers, president of Harvard University, yesterday pointed out that for every 100 male US college graduates there were 130 women. He omitted to say whether he thought this was possibly caused by the biological superiority of women."

"Davos prepares for elite gathering," by CNN
"'U.S. budget and current account deficits are very important contributors to an unbalanced global economy, while the U.S. deficit has been a source of demand that has propelled the global economy forward for some years now,' said Lawrence Summers, President of Harvard University and co-chairman of the 2006 forum meeting."

"The Tick Tock," by David Warsh at Economic Principals
"Should Harvard University president Lawrence Summers travel this week to the World Economic Forum in Davos, Switzerland, as he usually does, he'll find that the hottest item in the snowy little Alpine village is the international edition of Institutional Investor — the one with the cover story, 'How Harvard Lost Russia: The inside story of what happened when the enormous power and resources of the United States government were put in the wrong hands.'" [Read the Institutional Investor story here.]