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Effects of War on Terrorism Dominate World Economic Forum - 2002-02-03

Among the more than 2,000 participants at the World Economic Forum meeting in New York there is anxiety about the sluggish performance of the global economy in the aftermath of last September's terrorist attacks on the United States.

Stanley Fischer, the former number two official at the International Monetary Fund, identifies two quite different fears that are being widely discussed outside the formal meetings. "One is the possibility of some other terrorist action," he said. "The other is the suspicion, voiced by quite a few, that the implications of the unfolding Enron scandal could be much greater than they seem now and could have a negative influence on confidence and investment."

Mr. Fischer, now a New York banker, is referring to the collapse of the Enron energy trading company in Texas, the largest corporate bankruptcy in U.S. history. Arthur Anderson, one of the world's biggest accounting firms, with large operations outside the United States, is implicated in the scandal.

Paul Martin, the Canadian finance minister, said Sunday's economic discussions likewise reflected uncertainty. Mr. Martin said while several economists are optimistic, others believe heightened security measures and declining prices on world stock markets are restraining economic activity.

"In discussing growth we acknowledge the uncertainty affecting most economies in the short term," he said. "But most participants saw encouraging signs that the worst may be behind us.

While global economic trends are always a central focus on the annual meetings of the economic forum, this year the fight against terrorism and its economic implications dominate the proceedings. The meeting, which previously has always been held in Switzerland, was shifted to New York, as a show of solidarity with the victims of last September's attacks.