"The world is more U.S.-centric than it has ever been in post-World War II history," said chief Morgan Stanley economist Stephen S. Roach, Agence France-Presse (AFP) reported Thursday, January 23.

"The engine of the world is struggling,.. the U.S. recovery will continue to be disappointing,.. and we're close to contracting again right now", he told the forum in the Swiss Alpine resort.

A war on Iraq could wipe out any fragile signs of growth, stressed U.S. economist Gail Fosler, chief economist at private U.S. forecasting institute, the Conference Board.

"While I think we have some possible signals in terms of global recovery, we are looking forward to a set of risks -- certainly ... the prospect of war in the Middle East -- that have some truly profound downsides," she told the audience of business and political figures.

Fosler was more optimistic than Roach about a U.S. rebound from the stock market meltdown and the impact of the September 11, 2001, forecasting growth this year of 2.5 to 3.0 percent to Roach's 2.0 percent.

But she warned that the U.S. trade deficit would stay high, investment in the business and manufacturing sector was sorely lacking and that a war against Iraq could undermine consumer spending well into 2004.

"The true risk ... if we see a war in Iraq (is) that there will be an event either in Middle East or in the United States, or a series of events around the world, that will create a sharp visible impact on consumer confidence.

"This could give you no growth in the U.S. or a possible recession," Fosler said.

"If there is a major oil shock, its impacts are likely to be felt as much in 2004 as 2003."

On Tuesday, January 21, former Saudi Arabian oil minister Sheikh Ahmed Zaki Yamani warned the price of crude could more than triple to 100 dollars per barrel if Iraq set oilfields ablaze in the event of a U.S.-led war.

With practically no growth expected in the other Group of Seven heavyweights, Japan, Germany or Italy, which between them provide a quarter of world gross domestic product, the major driving force in the world economy today was China, speakers at the forum said.

Chinese share of global GDP could exceed that of the E.U. by 2015 to 2020 and current sales of Chinese manufacturing goods to the U.S., in return for dollars, could lead to a sharp rise in the U.S. currency, Fosler predicted.

But while China expected annual growth to stay at around 7.0 to 8.0 percent over the next couple of years -- more than twice that forecast for the global economy -- it still represented only a tiny fraction of global GDP and was not yet big enough to pull the remainder out of the doldrums in the immediate future, speakers said.

Germany, the largest economy in the 12-nation euro zone, was experiencing a decline in decline and was on the verge of recession, said economics professor Juergen Von Hagen.

Its problems could prevent growth throughout the whole euro zone from exceeding 1.8-1.9 percent, which in turn reduced the advantages of Britain and Sweden eventually joining the European single currency, he said.

As for Japan, which has been stagnating for 12 years, 2003 will be as bad as previous years, said economy professor Haruo Shimada, an advisor to Prime Minister Junichiro Koizumi.

He said this year was "critical" for Japanese attempts to reform its tax and pension systems and the public sector.

The annual meeting of the World Economic Forum (WEF) opened in Davos Thursday with political leaders due to grapple with insecurity caused by the threat of a war against Iraq.

One of the key guests in the Swiss Alpine resort will be U.S. Secretary of State Colin Powell, who is expected to deliver a "major speech" on U.S. foreign policy in the Swiss Alpine resort on Sunday, January 26, according to a State Department spokesman.

Powell's brief visit will come days after European allies France and Germany joined forces Wednesday, January 22, to block a war against Iraq, and shortly before U.N. chief weapons inspector Hans Blix delivers his first report on Baghdad's arms program to the U.N. Security Council on January 27.

Top guests also include the freshly-elected Brazilian President, Luiz Inacio Lula da Silva, a critic of the social drawbacks of globalization. He is due to arrive on Saturday.

U.S. Attorney-General John Ashcroft is due in Davos on Friday, according to the WEF's organizers.

Iraqi opposition groups are expected to hold a meeting here on the last day of the WEF, the organizers announced on Wednesday.

The brainstorming session from January 23 to January 28 has the theme "Building Trust" this year.

Some 270 seminars for the 2,100 guests will deal with topics ranging from the threat represented by Al-Qaeda, the possible economic impact of a war on Iraq, to business ethics and the fragile state of the world economy.

Chief executives from several major multinationals are also due to take part, along with heads of state or governments mainly from Latin America and Asia.

The dominant topic of the first day was the issue of big business in the wake of accounting scandals such as the collapse of U.S. energy giant Enron, and the persistence of volatile stock markets.

All have contributed to declining consumer and investor confidence, according to Vernon Ellis, the chief executive of consultancy group Accenture, formerly Andersen Consulting.

"Business has a particularly big challenge on its hands if it is to reverse this trend and recapture public trust," Ellis, who is due to take part in the Forum, said in Paris on Wednesday.

"Failure to do so could cause long term damage both to business and wider society, far beyond the U.S.," he added.

Arthur Andersen came under fire last year for its role in advising Enron, and the row pushed the consultancy to restructure and choose a new name.

Releasing details of a report on public confidence, which will be presented at Davos, Ellis insisted that major corporations need to think harder about the impact of their business.

"I think BP and Shell. They have to pay attention to public opinion. I think Coca-Cola too, which works in many countries around the world and take their responsibility in the communities very seriously," he said.

The chief executives of the oil giants and the soft drinks company are expected to take part in the WEF's annual meeting.

International corruption watchdog Transparency International is delivering a similar message, which is contained in its annual report released earlier in Berlin.

It is calling on company executives in Davos to consider new codes of conduct to restore faith.