This year marked the 39th annual session of the Davos Economic Forum, an organisation founded by Dr Klaus Schwabe of Switzerland in 1970. This was the time when President Richard Nixon of the US dealt a body-blow to the global economic system by going off the gold standard and halt the progress achieved towards a more equitable economic system through the North-South Dialogue. A quarter of century of UN supervised reforms, as symbolised in the strengthening of the role of the Economic and Social Council (ECOSOC), specially the establishment of the UN Conference on Trade and Development, (UNCTAD) in 1964, with Pakistan playing a beading role, came to an end. Though the division of the world into three groups the Capitalist Developed Group, the Socialist Group and the Developing Countries (Group of 77) established, and action to assist the poorer countries thought the Generalised Scheme of Preferences has continued. Nixon's approach virtually torpedoed the North-South Dialogue. Their interaction became confrontational as numerous multinational corporations rose in size and importance. Klaus Schwabe's initiative to launch the World Economic Forum that provided scope for the three major players in the economic sphere to consult and interact, namely governments, multilateral organisations and the leading multinationals and business institutions. With the passage of time, the World Economic Forum proved its usefulness so well that the number of heads of state and governments participating in it increased. This year some 42 were due to take part, including the prime ministers of Russia, China and Pakistan, as well as foreign, finance and commerce ministers from most members of the UN. Taking into account the worst economic crisis in the world since 1929, there had been expectations that the WEF would promote or facilitate some useful ideas that might counter the atmosphere of doom and gloom that has been in evidence since August 2008. The Great Depression of the 1930's had led to remedial measures by President Franklin D Rossevelt, described as the "New Deal" that provided avenues of mass employment on the one hand and also resulted in regulatory mechanisms to prevent a recurrence on the other. With the economies of Europe and Asia shattered by the Second World War, the US accounted for 50 percent of the world's GDP in 1945. It helped Western Europe to recover through the Marshall Plan and provided humanitarian aid to many countries in distress. Having entered that war following the Japanese attack on Pearl Harbour in December 1941, and having witnessed the horrors and atrocities perpetrated by the Axis powers, there was a dominant strain of idealism in Washington, which backed the anti-colonial movement that led to the liberation of a majority of former colonies in the first quarter century after 1945. Considering that greed provides the foundation for the capitalist system and major powers usually seek growth rather than decline, the US came to virtually dominate the world during the post World War II period, With the communist Soviet Union in contention, This led to four decades of the Cold War. The Soviet Union was finally defeated militarily in 1989 in Afghanistan, while its economy fell apart owing to internal failure and excessive global commitments. The US stood supreme as the sole superpower in 1990. No wonder Francis Fukuyama, a US economist of Japanese ancestry, described the outcome as the "End of History" meaning that democracy and the market-economy system had emerged triumphant following centuries of evolution. US neocons, Wolfowitz and Libby, were already propounding a world order based on the military and technical superiority of the US in 1992, but the eight years of Democrat Bill Clinton delayed an implementation of this ideology till 2000. When George W Bush entered the White House in January 2001, he was mentally ready for a force-based New American Century. He inherited a Budgetary Surplus of $236 billion in 2000, which had turned into a deficit of $455 billion in 2008 not counting the $700 billion provided for bailing out financial institutions. The extravagant expenditures of the Bush period, combined with financial mismanagement, produced a total national debt of $10, trillion at the end of his two terms. Obama's extraordinary victory as an African American in the US Presidential Election of 2008 was due basically to his call for 'change'. His priority will be the downturn in the US economy, and also the economies of most parts of the world that is expected to continue till the end of 2009. The 39th meeting of the WEF in Davos failed to generate the kind of euphoria or promise its meetings did in the past. The forum did provide a good occasion for influential leaders, heads of UN institutions, and major business houses to discuss the global meltdown. The decline in the global economy was proceeding, with a substantial increase in poverty, and raised doubts if millions would have access to food. Despite their problems the affluent countries, the UN and non-governmental organisations would have to step up efforts to prevent worldwide famines and starvation. On the other hand, IMF and other mechanisms had to play a role, to prevent financial instability. A sentiment was growing in favour of a Second Bretton Woods Conference to re-organise IMF and World Bank, and make then responsive to the needs of the developing world that accounts for 70 percent of the world GDP. From the deliberations at Davos, it is clear that instead of generating any false expectations, it has highlighted the failures of the established economic system. For instance, while President Obama is asking for a financial bailout of nearly $900 billion, much of it to keep local employers in business, Wall Street had announced bonuses of $20 billion to executives and workers of successful firms highlighting the contradictions of the present capitalist system. While enabling joint consideration of specific problems of various countries, this year's WEF only served to underline the need for worldwide efforts for fundamental reforms in the economic system. The market economy system had to operate independently of the political system. The desire for change also meant finding new economic policy makers who would be accountable, and responsive both to the contemporary situation and the future challenges, with focus on meeting needs of the world's growing population. The projected meeting in Europe in April 2009 would only provide the first global review of the challenges ahead. The writer is a former ambassador