KARACHI, Jan 17: Central bankers and leading corporate leaders see creeping protectionism as a threat to globalization. "As powerful nations lean more towards domestic agendas, the multilateral trading system has never looked more fragile," says Jean-Rene Fourtou , Chairman of Paris-based International Chamber of Commerce (ICC). He cautions: "The world risks entering a new age of protectionism."

The ICC chairman, who was on a visit to Karachi last week, says business people have to come together and be counted for the global economy. His message also resounded in informal discussions and speeches made at a luncheon hosted for him by the ICC national committee headed by Tariq M. Rangoonwala.

ICC concerns revolve round strong popular fears that global economic integration will overwhelm national economies and kill jobs and the perception that rich few are the only real winners. Economic nationalism is gaining ground amid fear and skepticism. An "alternative world is possible" movement against capital-led globalization is gaining momentum.

Johan Norberg, author of the book "In Defence of Capitalism", laments that the case for markets and capitalism was generally made in a very negative way. Even Margaret Thatcher, he adds, defended liberalization of UK economy by claiming "there is no alternative."

To dispel popular perception and fears, the ICC has dedicated its 35th World Congress scheduled for June 6-9 this year at Marrakesh to global economy with over-reaching themes such as multilateralism under assault; risks, instability and surprises and possible dangers to world economy.

The ICC notes that business today faces challenges as varied as they are daunting. Risks seem less predictable than ever. Under the glare of an all-pervasive media, social, political and security pressures on business are mounting. The failure of the WTO talks at Cancun has brought the world trading system at a crossroads.

ICC vice-chairman Zia Khaleeli says his colleagues feel that the benefits of globalization should be presented forcefully before the media to dispel popular myths. A major issue before the ICC congress would be how to push the Doha round forward to success.

Views of corporates and central bankers seem to broadly coincide as the financial system is most globalized driven by a powerful financial industry/community.

In his speech at Berlin on Tuesday Alan Greenspan, Chairman, US Federal Reserves, said: "It is imperative that creeping protectionism be thwarted and reversed to help the United States and other countries weather hard times."

Asked by a German national whether the world was moving towards a major global financial crisis and eventual collapse of the dollar if nothing is done to correct US trade and current account deficits, he responded: "If no measures are taken, the adjustments be made by the market. Protectionism will aggravate problems and flexibility of global economy to adjust." On the basis of evidence so far, Mr Greenspan said, it (crisis) was unlikely to happen.

The growing US budget, trade and current account deficits and consequently rising foreign debts are seen unsustainable with a very low rate of national saving. But the US Fed chairman says that the global impact has been "uneventful" except for the slide of the dollar. Asian countries like Japan, China and India have invested trillion of dollars in US government papers to help the country tide over fiscal and current account deficits.

However, in the emerging scenario Alan Greenspan visualized a clash of philosophical ideas on the global scene that would shape new values. He believes that it is ideas that stabilize economy and democracy.

One of the problems that the ICC congress would have to grapple with is whether the multilateral trading system is being undermined by the trend towards bilateral and regional trade agreements? In recent years, regional trade has been rising faster than global trade and the trend is likely to continue. The impact of the 25-nation EU on its trading partners will be one of the topics that will come under discussions with particular reference to agricultural subsidies that hurt less developed countries.