updated 1/24/2008 3:37:56 PM ET 2008-01-24T20:37:56

Still grappling with how to keep the global economy out of a crippling recession, the World Economic Forum confronted the urgent need to bring peace and stability to global hotspots like Afghanistan, Pakistan and the Middle East.

The forum challenged — and heard challenges from — leaders from the region, with Israel's foreign minister calling directly on global business leaders to pull their money out of Iran, and participants voicing concern that elections under Pakistani President Pervez Musharraf would not be free and fair.

Musharraf, on a European tour to build confidence after months of political turmoil at home, told business and government leaders meeting in the Swiss Alps that the elections would be transparent. But he brushed off complaints about human rights, saying that combating illiteracy and poverty and fostering political stability were far more important if his country was to eliminate terrorism.

"We have to attack al-Qaida, we have to eliminate al-Qaida, we have to deal with the militant Taliban," he said. At the same time, he said Pakistan had to be "stabilized" before any full-scale assault on radical elements.

Neighboring Afghanistan faces a growing threat from suicide bombers, said President Hamid Karzai. But he said the practice in his country "isn't religious, it's criminal," with gangs paying poor parents to give up their children in an apparent attempt to create turmoil that they can exploit.

Israel, Iran and the Gaza
Israeli Foreign Minister Tzipi Livni urged the leaders to take a personal stand against Iran's leadership by divesting from the country.

"Iran exports terrorism, destabilizes the region, denies the Holocaust and threatens to wipe Israel, my home, off the map," said Livni, referring to Iranian President Mahmoud Ahmadinejad's frequent calls for the elimination of Jewish state.

"If every company here and every country here would decide to divest from Iran, this would stop Iran," she said. "Iran is a global threat and Iran can be stopped by you."

Israeli Defense Minister Ehud Barak said on the sidelines of the Forum that Israel would probably launch a military operation to counter continuing rocket attacks from Gaza.

"We are not rushing to re-conquer Gaza, but we will not remove any option from the table when it comes to the security of our citizens."

'Water is running out'
U.N. Secretary-General Ban Ki-moon said the world would help create better conditions for peace if it took more action to ease the water shortages that fuel conflict in the Middle East and elsewhere.

Ban told the meeting that shortages of water contribute to poverty and social hardship in Israel, the Palestinian territories, Somalia, Chad, Nigeria, Sri Lanka, Haiti, Colombia and Kazakhstan.

"Water is running out," he said. "We need to adapt to this reality, just as we do to climate change. There is still enough water for all of us — but only so long as we can keep it clean, use it more wisely, and share it fairly."

Former U.S. Vice President Al Gore and U2 frontman Bono made a combined appeal for more commitment to curbing climate change and global poverty.

Gore, who shared last year's Nobel Peace Prize for his efforts to fight climate change, said the problem was getting worse faster than predicted.

"We could take the whole session talking just about the new scientific evidence of the last few weeks and months," he said.

Bono, who has brought his poverty-fighting campaign to the Forum previously, said the Group of Eight major industrial countries had delivered only half an additional $50 billion a year in aid by 2010 that they had pledged in 2005 to give Africa.

But he said German Chancellor Angela Merkel and French President Nicolas Sarkozy had told him separately they would try to do more, even though they have major financial challenges at home.

Sovereign wealth funds
Continuing to overshadow the forum were the economic concerns that preoccupied the first day of talks Wednesday, when experts discussed what was needed to calm markets and keep the U.S. subprime crisis from spreading further.

On Thursday the focus was on sovereign wealth funds, and whether they should be regarded as white knights or something more sinister in coming to the rescue with investments from their deep pockets and government backing.

Critics contend the funds offer little transparency and could flex their political power by taking key stakes in foreign defense companies, major banks and other companies.

Larry Summers, a former U.S. treasury secretary, urged the government-owned funds to agree on basic principles — that they will avoid currency speculation, commit to long-term investments, and never pursue national political objectives.

"I'm baffled by why the sovereign wealth funds don't get together and put an end to all this discussion by agreeing on some piece of paper" that provides those assurances, Summers said.

Found mostly in the oil-rich Middle East and Asia, but also in Russia and Norway, government-owned sovereign wealth funds control an estimated $2.5 trillion in assets, with analysts predicting the value of their holdings could reach as much as $12 trillion by 2015.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Discuss:

Discussion comments

,

Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments