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Shimon Peres, star of Davos By Guy Rolnik Tags: israel news DAVOS, Switzerland - President Shimon Peres and philanthropist George Soros had a lot in common last week. Distinguished careers, for one. And both glowed, unlike most of the managers, heads of state and entrepreneurs attending the World Economic Forum (WEF) in Switzerland. With 29 meetings in four days, seven speeches, dozens of interviews and countless adoring glances, Peres was no doubt the biggest star at Davos. He's been a fixture at the forum for 12 years, and it brings out the best in him. During around-the-clock meetings with heads of state and business leaders, endless debates on the loftiest of subjects and never-ending interviews, the president is in his element. The mood at the Swiss Alpine resort was grim this year as the financial crisis was exacting its toll, with no end in sight. Only Soros and Peres seemed above it all. Advertisement Klaus Schwab, founder of the WEF, takes pride in the diplomatic advancements and achievements of Davos. But this year there was an incident, with Peres at its center: Turkish Prime Minister Recep Tayyip Erdogan stormed off a panel in which he had participated, blasting Israel and the event's organizers, too. Schwab was distraught: First the economic crisis savages his sponsors, and now this embarrassment. Indeed, Erdogan vowed to forswear future Davos meets. Yet in his efforts to appease Ankara, Schwab didn't neglect Peres. At the traditional Friday morning breakfast with 200 Jewish guests, he thanked him, calling him the WEF's biggest star. The situation with Turkey seems to have spun out of control. What happened on the dais? Peres: "I don't know what caused the incident. Our relations with Mr. Erdogan are usually good. In the past I also aided Turkey's [effort] to join the European Union. I was surprised. His support for Hamas is so extreme. All sorts of things were said - that we shoot children, that we're turning Gaza into a prison. Maybe the fact that Turkey is scheduled to have local elections [in March] had an effect. In any case and with all due respect, friendship or no friendship, truth supersedes all. "There is an inherent asymmetry in a struggle between a democratic nation and a terror organization. The democratic country must operate transparently, out in the open, while the terror organization can operate in secret. Nobody sees their arms-smuggling tunnels when they're firing rockets or blowing up buses. Yet, television shows the images of Israel's attacks night after night, and the pictures are powerful. "Since there were four people on the panel, three of whom were attacking me, I thought I had to tell the truth and I said it without a second thought," the president says. "I have to say I was surprised to get so much applause." In response to the question of how to mend relations between Israel and Turkey, Peres suggests that time will do the job. The Turks want to join the EU, he says, and this incident didn't advance that goal. Also, he doesn't believe Turkey wants to sever its relations with Israel. "Unfortunately Erdogan has a one-sided view. He receives information from Hamas only, but no answers from us," and he should have asked Israel for explanations, Peres says. Somebody told me Erdogan was offended that he hadn't been told about the Gaza campaign in advance, despite Turkey's deep involvement in talks with Syria. Is that true? "He said he saw [Prime Minister Ehud] Olmert four days before the attack and hadn't expected it. He didn't say what you're saying. He implied it. I told him that when Olmert met with him, the decision hadn't been made yet. That's the truth. The cabinet decided the day before the campaign." Asked whether he can discern an increase in anti-Semitism in the wake of Operation Cast Lead, President Peres says no. During his innumerable interviews and discussions at Davos, he tried to focus on the future, not the past. But on that fateful panel he found himself under attack, "as though Israel is a terrorist country and Hamas is democratic, a light unto the nations." Is democracy confined to election day, he asks rhetorically. "[Hamas] was elected and betrayed the Palestinian Authority, throwing Fatah people off roofs and killing and shooting." Peres, for one, didn't sense any hostility among the world leaders with whom he met, or during the interviews he gave. It's a journalist's job to ask the hard questions, he points out. When meeting with the presidents of Azerbaijan and Kazakhstan, both countries enormously rich in natural resources and both friendly to Israel, Peres suggested they establish joint R&D investment funds, like the ones in place between Israel and the United States. "But I suggested an innovation: to have not just the governments participate, but private companies, too. Later I suggested to [Russian Prime Minister Vladimir] Putin that we set up a fund like that, with each side putting up $100 million. He liked the idea." Putin may have been withering during the WEF panels and in media interviews, but not when meeting with him, adds Peres. In fact, the president came out in support of the Russian leader, suggesting that he felt somewhat besieged at Davos. Peres is confident that talk in Davos will translate into action. "I met with Swedish Prime Minister Fredrik Reinfeldt, with Czech President Vaclav Klaus, with representatives of Singapore, South Korea and India. I met with the biggest corporate leaders: John Chambers of Cisco, Mark Zuckerberg of Facebook, and Michael Dell of Dell. I asked Dell to invest in building a plant in Jerusalem. He just invested $800 million in computerized classrooms in Mexico. He agreed to my request. I talked with Chambers about setting up a global educational Internet venture, headquartered in Israel. "I met an amazing young man with $300 million: [PayPal and Slide.com founder] Max Levchin. He's joining, too. Things will happen. I talked with Daniel Vasella, CEO of Novartis, about stem cell research and he's willing to invest [in Israel], too," Peres enthuses. Ford trumps Lenin Before we talk about the future, let's talk about the past. How did you find Davos this time, compared to previous years? "The difference is that in the past, everyone was optimistic, like peacocks. Today they are ravens. This year more politicians and academics were seeking consolation, I think. There is depression, and there are questions." Do you see people taking responsibility for the crisis? "People who lost money aren't talking. There aren't many confessions. I see this crisis as a crisis of management, because greed did them in. "Even though I'm not an economist, I was asked to explain what happened. I said that [economist John Maynard] Keynes claimed that what affects the economy is conception, meaning, ideology. There were three or four great ideologies, all of which were sensible and all of which failed for the same reason: Failure results from excess. "The communists chose equality over freedom, but they didn't leave any freedom at all, which quickly results in slavery. From that perspective, Henry Ford was a greater success than Vladimir Lenin. Ford turned the workers into consumers while Lenin turned them into slaves. "Then came social democracy, which sought to merge both elements and created the welfare state. It's a nice idea, but they wanted to give everything to everybody and it didn't work. They fell, too. "Now we have free enterprise - it doesn't need government, it doesn't need anything. It went to their heads. They thought they were making money from nothing. They had more money than ideas and started to hand out giant salaries, until the whole thing blew up. They were guilty of excess, too. There is a place for private enterprise, but that doesn't mean anybody can do as he pleases with other people's money." Some believe the developments have accelerated China's becoming the next economic empire, while others think they challenge Beijing's leadership. "China isn't an empire. China is a continent in and of itself: its size, its language," Peres says. China occupies 4 percent of the world's land and Russia controls 8 percent, but Russia's population numbers only 142 million, whereas China has nine or 10 times that, he says. "There's no land in China, no air, no women. Seventy million men are bachelors because of their policy. The ratio of men to women is 128 to 100." However, the president qualifies, the Chinese are "running business" very well. "It's a vast country that's advancing all the time. When [Mikhail] Gorbachev took power in Russia, he decided on glasnost and perestroika, to secure political freedom and protect the economy from the top. The Chinese say, let's make the economy freer and maintain political supervision. It's working." One diplomat told me that the Chinese seem to have the best breed of politicians, that it's a real meritocracy. "Historically speaking, China has no religious hierarchy. Instead there was an administrative hierarchy of mandarins and kings. There are no gods in China, no one teacher." What they have, notes Peres, is self-control: "They have done wonders. They have reduced world hunger. Mao Zedong reduced poverty. It isn't simple. I have no doubt there is dissatisfaction. But historically speaking, China is very restrained. It isn't aggressive, it didn't conquer anything. It was a victim of conquest. In Taiwan they're being cautious." American Machiavelli As for the U.S., it's in a state of financial crisis, Peres acknowledges, but he is confident that the Americans will overcome. "America is giant, strong and innovative. They have terrific research institutes, terrific universities, so they will recover," he explains. "Once the economy was based on gold. You could touch it. Then, on production capacity - you could measure it. Now the economy is based on potential, not on tangibles." Yet America's financial system failed. "The pocket doesn't make the head. The head makes the pocket, and the pocket has been emptied. This time the crisis is one of leadership, of company managers." Can President Barack Obama fix it? Peres switches the subject, to change. "The U.S. elected Obama. He didn't elect the U.S. Look at his team, economic adviser Larry Summers and Secretary of State Hillary Clinton - the same people who were in power before. He has no others. I said in a meeting with the Europeans that I see they admire the choice of Obama. [I told them that] I'll admire your admiration when there's a European Obama. "It isn't only in the U.S. There's a threat in the Arab world, there's protest. The young generation isn't impressed with the existing regimes and corruption. Israel is admired everywhere in the world - for having 10 Arab MKs, who savagely attack the state. The youth in the Arab world say that here people are silenced." Back to America. Could we be seeing the buds of an ideological crisis? "No. no. America has guts. There's a great story about America that asks: What did you do with [Thomas] Jefferson's view of freedom? You took one element - the freedom to shop. People started to buy like crazy ... and borrow to pay for it. Are you nuts? Stop it. Oil at $40 per barrel is 3.5 percent of global GDP. At $140, it's 15 percent. The U.S. is the biggest consumer of oil. What for?" Asked whether the American model of capitalism will survive, Peres says the rot set in under Ronald Reagan, who decided there was too much government. Reagan overdid it, giving public money to private individuals, who lost control. "Some people made $500 million a year plus bonuses. Mortgages were the biggest bluff. The brightest strategic mind in America is [former White House deputy chief of staff] Karl Rove. He's been called a modern Machiavelli. Rove discovered that people who take mortgages tend to vote Republican. The mortgage gives them a feeling of wealth and ownership. So he cultivated Fannie Mae and Freddie Mac, the government mortgage agencies, which lent left and right like mad." I think it started under Bill Clinton. "Yes, but Rove developed it enormously. It's all a question of degree. Karl divided America into two parties: beer-drinkers and wine-drinkers. Beer-drinkers are Republican, wine-drinkers are Democratic. He's amazing, that man." Israel has also been moving toward financial rather than tangible elements, says Peres. But - "thank God" - the banks haven't been entirely relieved of regulation. Israel has a problem of NIS 600 billion in debt, of which half is owed by companies. The president proposes that corporate debt be spread out over 10 years, to prevent bankruptcies. "This is a small country but we're big in research and development. Why? Because we're Jews. That's what the Jewish people have had throughout history - dissatisfaction, the desire to change. When I'm asked about Google, I say that our father, Moses, invented Google when he sought the Promised Land. That's how Google was created." Bookmark to del.icio.us   How Israel voted See Israel election results by city/sector. Israeli cover girls Israeli model Bar Refaeli lands Sports Illustrated Swimsuit Issue cover.

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