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Terror strike may sink global economy, warns WEF chief

AFP, Bangalore, India
The chief of the World Economic Forum (WEF) warned Wednesday that a major terrorist strike could easily ruin the upbeat global economic and political scenario.
"Two weeks ago global political and business community leaders met (at Davos) and I have to confess the mood was significantly better than the last three years," Klaus Schwab told a conference of India's top trade lobby.
"If we look at the geopolitical situation, we have some signs of hope," Schwab told delegates in this southern Indian city of Bangalore, India's technology and aviation hub.
"We have the (peace) process between India and Pakistan even if we are only at the beginning. We have some positive signs ... even hopeful that the North Korean issue can be resolved," he said.
India and Pakistan have in recent weeks said they planned to begin a process to solve their decades-old dispute over the Kashmir region, which brought them close to a nuclear war two years ago.
"So the mood was relatively positive in geopolitical terms," Schwab said. "Of course everybody felt that a major terrorist activity could derail this and could destroy the new confidence people have in the future," he said.
Later this month, talks will be underway between the United States, China, Russia, Japan, South Korea and North Korea amid calls for Pyongyang to dismantle its nuclear program.
The US argues that the February 25 talks in Beijing must focus on North Korea's covert uranium-based program as well as on its well-documented plutonium-producing enterprise.
North Korea says the uranium program does not exist, and China too continues to view with scepticism the US allegations on uranium.
Turning to the global economic situation, Schwab, who founded the WEF in 1971 and is the executive
chairman, said the global economy was on the verge of a positive devel-opmentcycle.
"There is a clear evidence of this after two-to-three years with (gross domestic product) growth rates in the US expected to be four percent, in Europe two percent and Japan two percent," he said.
Schwab said the global challenges of poverty and governance should be overcome by collaborative partnerships in areas such as poverty.
"The type of (political) leadership needed today is one of permanent accountability," he said.