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24 April 2024

With concern about world economy as backdrop, leaders gather in Davos

By Agencies




Moving beyond warnings of growing terror and the lingering fears of economic malaise, musician Bono and former US Vice President Al Gore were set to open the second day of the World Economic Forum’s annual meeting.

The U2 co-founder and Gore, who shared the Nobel Peace Prize last year, drew hundreds of eager attendees before the start of their early morning session to examine how to alleviate both world poverty and draw attention to climate change.

Those themes are among topics of discussion at the meeting, along with pursuing a workable peace process in the Middle East and how technology is ushering in a new age of social networking that knows no borders.

Still, with many participants heavily exposed to the markets - and sharing the realization that economic downturn can breed political turmoil - the main focus Wednesday was on the fear of world recession.

Formally opening this year’s Forum on Wednesday, Afghanistan President Hamid Karzai warned that the world could suffer terribly from the “wildfire” of terrorism engulfing his region, thickening the gloom at a meeting already worried about the threat of global recession.

Karzai listed a sobering rundown of the attacks attributed to Islamist terrorists in recent months - among them the December assassination of former Pakistani Prime Minister Benazir Bhutto and deadly bombings in Afghanistan and Pakistan that claimed dozens of victims, including many schoolchildren.

With terrorism still on the rise in the region six years after the ouster of the Taliban, “it seems like the mutant of extremism is dangerously unleashed across the region,” Karzai said, warning that the trend “bodes terribly badly for the whole world.”

Pakistan’s President Pervez Musharraf, a US ally in the fight against terrorism, is attending the conference in Davos as well, as part of a European tour seeking to reassure the West that he was still in control of his country after months of political instability. Both leaders held talks Wednesday with US Secretary of State Condoleezza Rice, but there was no indication they would meet each other.

Musharraf spokesman Rashid Qureshi told The Associated Press the meeting with Rice “went very well” adding that there was “total consonance and unanimity of views” on joint efforts to fight terrorism and a feeling that the sharing of intelligence between the two countries was “excellent”.

Rice, in a nod to the economic anxiety at the forum, told an audience of chief executives, politicians and others that the US economy was resilient and would remain an “engine of growth”.

Rice also said the US would welcome foreign investment and free trade, “and our economy will remain a leading engine of global economic growth.” She urged the world to “have confidence in the underlying strength of the global economy - and act with confidence on the basis of the principles that lead to success in today’s world.”

Still, many leading participants shared the view that the world could not escape the effects of America’s economic malaise, marked by the subprime crisis, loss of business confidence, poor company reports and a roiling stock market.

A year ago, those at Davos predicted that the economy would move ahead with confidence - but that was before the US credit crisis spread to shake economic confidence elsewhere.

World markets remained volatile Wednesday, with Asia closing up and Wall Street staging a stunning comeback but European stocks falling despite the US Federal Reserve’s surprise interest rate cut the day before aimed at shoring up the sagging American economy. The fireworks added weight to fears at Davos that the world could be sliding into recession. (AP)
In depth: Davos

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