Beleaguered UN chief

As UN secretary-general, Kofi Annan has the world's most difficult and thankless job. In the first instance, there is no proper job description for his office in the UN Charter. There is no specific list of duties.

The post-Cold War multilateralism at the UN has complicated his work. A host of new problems have been added to his portfolio with very little means to address them. On issues of peace and security, he cannot take initiatives on his own and has to look towards the Security Council for guidance.

But he is held responsible for everything that goes wrong with our world and for every UN failure or setback; be it the massacres in Rwanda and Srebrenica, or the continued sufferings of the people of Kashmir and Palestine, incessant cycles of violence in Africa, or unabated poverty and deprivation, helplessness and marginalization of the UN on issues of global relevance and importance, or unabashed use of power at the cost of UN's legitimacy.

The secretary-general also faces criticism from the developing countries and oppressed peoples for not doing enough for their cause. He bears the brunt when a natural calamity or disaster strikes any part of the world or when his own senior colleagues let him down with bad judgments and poor performance.

He is also held "responsible" for cases of sexual harassment by high UN officials and abominable sex abuses by UN peacekeepers in Africa. Ironically, he is also sometimes blamed when a superpower loses an election to a UN body or commission.

What is conveniently ignored is the fact that the UN secretary-general functions in a global political environment with deep diversities and anomalies. As strait-jacketed head of an inter-governmental organization, he cannot ignore susceptibilities of UN member states.

There are limits on his "freedom of action" fixed by global political realities including divergent, and sometime, conflicting interests of the major powers. Kofi Annan's 'political activism' has earned him respect and admiration the world over but he knows his limitations when it comes to criticizing the policies and actions of governments whose support he needs.

His "quiet diplomacy" has, by and large, gone down well with the UN membership including the permanent members of the Security Council, familiarly known as the P-5.

As the former US ambassador to the UN, Richard Holbrooke recently observed, "because of his quiet charisma and great political and personal skills, he (Kofi Annan) has become the most powerful and best-known secretary-general since at least Dag Hammarskjold.

This puts him under much greater scrutiny and pressure. Recently, he has been pulled in two different directions." Holbrooke added, "what he's trying to do, and it's very hard, is to satisfy both constituencies at the same time and protect the long-term interests of the organization."

Lately, Kofi Annan has come under fire from all sides. The conservatives in Washington joined the extreme right in castigating the UN and its leadership for the "world's problems" and demanding Annan's ouster for making statements and doing things on Iraq which they found "deeply offensive" and "inimical" to US interests. Some in the US Congress have also been calling for his resignation.

Mahathir, a respected Muslim statesman and former prime minister of Malaysia called on him to resign "for failing to stop the Iraq war." "He is not a free agent," the Malaysian leader said.

Strictly speaking, in terms of the UN Charter (Article 97), the secretary-general is "the chief administrative officer of the Organization." In that capacity, he is obliged to carry out the decisions of the main organs of the United Nations.

He does have some "freedom of action under Article 99 which says that the secretary-general "may bring to the attention of the Security Council any matter which in his opinion may threaten the maintenance of international peace and security."

As the experience over the years has shown, a decision in the Council on the nomination of a selected candidate is not always easy to accomplish. As a non-procedural matter, the recommendation of the Security Council on the secretary-general's appointment requires the affirmative votes of at least nine members, including those of the five permanent members.

This brings in the great power politics and special interests playing a crucial role in the appointment of a secretary-general. More than often, the permanent members have used their veto power or threatened to use it to block or promote the nomination of a candidate.

Since 1946, permanent members used 43 vetoes during closed sessions to block a nominee for UN secretary-general's post. The succession of the first secretary-general Trygve Lie in 1950 ran into an impasse when the Soviet Union vetoed Lester Pearson of Canada and Paul Henri Spaak of Belgium, and the US threatened to veto any other candidate. As a compromise, Trygve Lie was allowed, through a resolution of the General Assembly, an exceptional three-year extension in his normal tenure.

In 1981, the Security Council was deadlocked for more than six weeks when the United States tried to block Tanzania's Salim A. Salim and China, through 16 straw ballots, vetoed the outgoing secretary-general Kurt Waldheim's bid for an unprecedented third five-year term.

Finally, both Salim and Waldheim withdrew their candidatures clearing the ground for a compromise candidate, Javier Perez de Cuellar, who was nominated on the first formal ballot from a list of nine hopefuls, all from Third World countries.

In 1991, the process of selecting Egypt's Boutros Boutros-Ghali as Perez de Cuellar's successor had to go through several straw ballots before his unanimous approval on the only formal vote.

The problem arose because the US and Britain were reluctant to accept the African region's claim to the post on the basis of geographic rotation. The Non-Aligned Movement not only supported Boutros-Ghali's candidature but also agreed to vote against any non-African candidate in the General Assembly.

In 1996, the US vetoed Boutros-Ghali's bid for re-election to the second term, paving the way for Kofi Annan, an international civil servant of long standing, to be unanimously recommended by the Security Council and formally appointed by the General Assembly as the seventh UN secretary-general.

In 2001, Kofi Annan was unanimously re-elected to his second five-year term which he will complete at the end of next year. If the unwritten rule of geographical rotation is observed, his successor will come from Asia.

It is possible that backed by one or two of the P-5, Eastern European region might also stake its claim on the ground that among the seven secretaries-general elected so far, while Asia has had one, but none from Eastern Europe, a region that now also includes Central Asia and Russia.

The role of the P-5 does not end with the election of a secretary-general in the Security Council. An incumbent always needs their support and goodwill to be able to function effectively in pursuit of his priorities and programmes, which have expanded manifold in scope and magnitude in recent years.

Trygve Lie's outspoken endorsement of UN action in Korea and Hammarskjold's handling of the Congo crisis earned them the Soviet wrath. U Thant's mediatory efforts in the Vietnam conflict and his handling of the Middle East crisis led to problems in his relations with the US and some other influential members. Boutros-Ghali's handling of the Somalia and Bosnia problems annoyed Washington, and in consequence, cost him his second term.

Now Kofi Annan, a one-time favourite of the US and beneficiary of Washington's support and accolades for many years, finds himself on the wrong side of the Bush Administration.

He is being blamed for mismanagement and corruption within the UN system and accused of complacency over the scandals involving corruption in the UN's oil-for food programme in Iraq and "sexual harassment and abuse" charges against UN officials, including the blue-helmeted peacekeepers in Africa.

For Annan, the outgoing year has indeed been a difficult year and what he himself called "an annus horribilis" which saw mounting criticism against the UN and persistent allegations of "poor leadership" against him. One of the major allegations against him was his son, Kojo's involvement with a Swiss firm that held a UN contract under the Iraqi oil-for-food programme.

From being what the US once perceived him as "the personification of international community and a global citizen who gives voice to all the people of our United Nations", Annan suddenly became the "bete noire" of the Bush administration and a convenient target of the extreme right's campaign that sought to discredit him for alleged "ineptitude and obstructionism" in dealing with the problems afflicting his Organization.

Kofi Annan's "casus belli" with Washington might in fact be rooted in some of his actions and statements on the US invasion of Iraq (UN's reluctance to play a larger role in Iraq and Annan's public questioning of the legality of the US invasion). A perception also developed in Washington that Annan was meddling in American politics.

As tensions with Washington grew, several investigations were launched to look into the charges of corruption within the UN system. The UN is conducting its own investigation headed by former US Federal Reserve chairman, Paul Volcker, to probe into the Iraqi oil-for-food programme scandal.

His report, expected at the end of this month, might help close this unpleasant chapter. According to the New York Times, a group of Annan's American friends and foreign policy experts met in strict secrecy last month at former US ambassador to the UN, Richard Holbrooke's apartment in Manhattan to discuss how "to save Kofi and rescue the UN."

Their main concern was that lapses in Annan's leadership during the past two years had not only eclipsed the "accomplishments" of his first five-year term in office but were also threatening to undermine the two years remaining in his final term.

In a bluntly worded advice, the group told Annan to patch up relations with the Bush team and restore confidence of his own bureaucracy which had "un addressed grievances" against high-level officials.

The group, according to Holbrooke, was not dictating "what to do to a secretary-general" but was only rendering him a sincere "advice" out of its belief that "the UN cannot succeed if it is in open dispute and constant friction with its founding nation, its host nation and its largest contributor nation."

He spoke of the stark reality indeed that "the UN, without the US behind it, is a failed institution." The secretary-general seems to have taken the group's advice to heart.

He lost no time in visiting Washington where he is reported to have had "an encouraging" meeting with the secretary of state-designate, Condoleezza Rice. According to reports, he seems to have managed in repairing his relationship with Washington, which no longer is pushing for his "resignation" and will probably let him complete his remaining term.

Who will succeed Kofi Annan on completion of his present term next year? This question is already buzzing in the corridors of the UN with some capitals in Asia and perhaps elsewhere seriously weighing their chances to claim this globally coveted post. The support of the P-5 will remain crucial in the whole process.

Sri Lanka, Bangladesh, Thailand and Singapore are among the countries that have been evincing interest in the top UN job. There are already two declared candidates, Jayantha Dhanapala of Sri Lanka, a veteran diplomat who last served as UN's under secretary general for disarmament affairs and Foreign Minister Surakiart Sathirathai of Thailand.

Another name which only surfaced during the anti-Annan campaign in Washington, as the US extreme right's choice to replace Kofi Annan is that of Vaclav Havel, the former president of the Czech Republic.

Given the high political profile that goes with this office and the role that its incumbent is required to play as global community's spokesman, the election process of a UN secretary-general is always an event of great international interest and anxiety.

A decision in the Security Council this time will eventually depend on Asian region's ability to produce with consensus a single candidate who is "outstandingly qualified" to be "world's CEO."

For obvious reasons, India and Pakistan rule each other out. The field will be open to smaller states with a non-partisan outlook and good regional and global standing.

If there is a contest between Asia and Eastern Europe on secretary-general's post, the Security Council might witness one of the most divisive selection processes in its history.

The author is a former ambassador to the UN.

Saving the peace process

With the Baloch sardars rattling their sabres and the army on permanent near-apoplectic guard against the slightest sign of tribal intransigence on the gas pipes that provide fuel for hearth and home, the president has certainly felt a certain prickly embarrassment during the last two weeks.

But though the Baloch episode is by no means over, now that the railway has also been targeted, it has diverted some of the attention in this country away from the dialogue between the two South Asian nuclear-armed neighbours, which, unfortunately, appears to have hit a major hidden reef.

The latest hiccup in the negotiations is over the issue of sharing the waters of the Chenab River that flows through the disputed territory of Kashmir. Pakistan wants the World Bank to arbitrate in the dispute with India over the construction of the Baglihar dam that violates the terms of the Indus Water Treaty of 1960.

India, on the other hand, feels that as differences between the two countries have been narrowing for some time, the issue should be solved bilaterally on home turf.

They have also pointed out that this is the first time since the signing of the treaty, that one of the parties to the agreement is seeking the intervention of a third party. There have also been some recent incidents on the Line of Control.

Analysts on both sides of the great divide, who listen to every statement, watch every gesture and follow every nuance of the politicians, are now beginning to have serious doubts if the major issues which are standing in the way of a permanent settlement, will ever be solved.

If a documentary was to be made on the last 600 days of the entente cordiale, a good starting point would be April 2003, when Atal Behari Vajpayee, the former prime minister of the world's largest democracy, took the initiative to bury the hatchet by offering his hand in friendship to President Musharraf.

Pakistan's supremo, who had not as yet become embroiled in the controversy over the uniform, gave a positive, but guarded response. General Musharraf was still disturbed by the failure of his earlier overture to initiate a chapter of friendship, but nevertheless welcomed any move that would create a thaw in relations between the former adversaries.

"Cautious optimism", therefore, dominated the list of cliches that crept into Pakistan foreign office dispatches and found their way into the local newspapers. The mood was nevertheless upbeat.

The two countries were entering a new era. Gone were the hostility, angry innuendos and churlishness displayed in the past. The process of normalization had been set in motion, and a number of positive developments were registered. The two high commissioners were back in harness promoting goodwill, making friends and trying to pick up from where their predecessors left off.

The Delhi-Lahore road, rail and air links were restored. Large numbers of ordinary Indian citizens visited Pakistan to watch the cricket matches, and returned with tales of exceptionally warm hospitality shown to them by taxi drivers, restaurant owners and other ordinary citizens of the Islamic republic.

Jimmy Engineer, with his long beard and shawl, grabbed a staff and started his long march to Patna. Sukhbir, who heads the list of Bhangra entertainers, put on his dark glasses, for what must have been the umpteenth time and headed for the western border.

Ordinary people in Karachi got to meet the beautiful, eloquent and intelligent Indian actress Nandita Das. And large numbers of ordinary Pakistanis and quite a few not so ordinary Pakistanis, led by the bourgeoisie of Lahore and Karachi, did the sights of Jaipur and Jodhpur and visited the various textile outlets of Mumbai.

The bonhomie infused a fresh spirit into the dialogues and triggered off people-to-people contacts at various professional levels that seem to have proliferated during the last five years.

In fact, the visa section in the Indian high commission in Islamabad appears to be staggering under the weight of the applications that are clogging up the drop-box arteries.

There have been many achievements most of which can be found at the functional level. The cease fire along the Line of Control in Kashmir, announced in November, has been holding up, which has permitted India to proceed with its fencing. Imperceptibly, a change has also occurred in the respective position of the two countries on the contentious Kashmir issue.

Pakistan no longer insists on the need to resolve this dispute before other issues can be discussed, or that the UN resolutions on Kashmir should be implemented. Neither does India claim that the accession of Kashmir to India is valid and that there is nothing more to discuss, or insist upon a cessation of what they refer to as cross-border terrorism before any discussions on Kashmir can proceed.

A lot was also happening on the official level. A round of negotiations have been held on the eight issues listed under the composite dialogue which included CBMs and Kashmir, Siachen, the Wullar Barrage/ Tulbul Navigation Project, Sir Creek, terrorism and drug trafficking, economic and cultural cooperation and friendly exchanges in various fields at diverse levels.

Predictably, the talks yielded no specific results, and the two nations are far from reaching any agreement on the major issues dividing them. But the discussions have re-engaged the two countries on these contentious issues. Further, a separate dialogue on nuclear CBMs also took place.

This yielded some modest results, notably a decision to establish another hotline between the two foreign secretaries. A long list of 72 CBMs was handed over by the Indian foreign minister to his Pakistani counterpart for consideration.

Individually, the minor successes may be trivial, but their establishment would certainly assist the process of normalization. The good news is that it was decided to continue negotiations on all these issues with a time table drawn up for continuing contacts between the two foreign ministers and, later, during the Dhaka Saarc summit, between the two prime ministers.

Some analysts in Pakistan have suggested that considerably more progress might have been achieved if the BJP had won the election, instead of Congress. This is in spite of Sonia Gandhi's assurance that so far as Pakistan was concerned, her government would continue the policy initiated by the BJP.

The reasoning was simple. As the initiative for the peace process had come from Vajpayee and not Manmohan Singh, the latter was under no compulsion or hurry to see the process through.

Actually, the initiative had come from George Bush who was anxious to create peace in South Asia, and nobody really wanted to steal Vajpayee's thunder. Manmohan Singh's appointment was nevertheless warmly welcomed by the people of Gah, a tiny hamlet located near the Pakistani city of Chakwal, where Singh's family lived before the partition.

The villagers were thrilled that a son of the soil had become prime minister of India. But disappointment soon set in when news filtered down to the village that one of the first acts of the newly installed Indian government was to postpone the two-day expert-level talks on nuclear confidence-building measures, for the reason that the new foreign minister had not yet been appointed.

This was seen as an attempt to stall the peace process. The various ministerial level hiccups notwithstanding, relations between the two heads of state are still cordial.

The extraordinary civility shown by President Musharraf and Prime Minister Manmohan Singh towards each other in their speeches to the United Nations General Assembly and their joint press conference in New York in September, in sharp contrast to what the world has witnessed in the past, certainly point to a new dawn in India-Pakistan relations.

In spite of the cynics on both sides of the border, who feel that the recent trend in India-Pakistan relations is unnatural and goes against the grain of history, and that one should adopt a wait-and-see-policy, there is still considerable optimism in the air.

However, in spite of people-to-people contacts and the increasing role that civil society is playing in breaking down social and political barriers, it is this writer's belief that even if all other issues are resolved, Kashmir will always stick out like a sore thumb in any future negotiations between the two former adversaries.

The territory was the major theatre of operations in the India-Pakistan conflicts that took place in 1947-48, 1965, 1971 and 1999, and several issues that have been identified for discussion within the composite dialogue. That is how the hawks on both sides of the divide will continue to see things in the years to come.

Dialogue on Kashmir options

The problem of Jammu and Kashmir arose out of the way in which power was transferred in 1947, with the Boundary Award that gave India access to Kashmir from Pathankot, and Lord Mountbatten's influence to get the Maharaja to accede to India, as a condition for military help against a rebellion.

Though both he and Prime Minister Nehru declared that the final disposition of the state would be based on the will of the Kashmiri people, that undertaking has yet to be honoured.

In the meantime, Kashmir has become a major source of tension between India and Pakistan, who have gone to war against each other several times, while the 15-year-old intifada by the people has cost close to 100,000 lives.

Since 1998, when both India and Pakistan became nuclear powers, the persistence of hostility over this dispute has had awesome implications for the whole region, indeed, for the world, since a nuclear conflict would be a catastrophe for the planet as a whole.

Originally, the dispute was referred to the UN Security Council by India at the end of 1947. The Council passed resolutions in 1948, and 1949, stating that the people of the state would determine their future through a plebiscite under UN auspices.

Though both India and Pakistan accepted these resolutions at that time, India obstructed their implementation while consolidating its hold over the disputed state.

Despite the fact that the UN reiterated the resolutions in 1957, India, as the stronger power changed the status of Jammu and Kashmir by including a clause in its Constitution, including the state in its territory.

Since then, the formal positions of the two countries are that India claims Jammu and Kashmir as an integral part of its territory, while Pakistan maintains that the state is disputed territory, as recognized in the UN resolutions, whose future should be decided through a plebiscite, under UN auspices.

The 1960s witnessed a steady build-up of tensions owing to India's policy of integrating the state, as it built up its armed forces following defeat at the hands of China. The international community became so indifferent that when Pakistan approached the Security Council in 1964, it failed to pass a resolution.

Activation of armed struggle in the summer of 1965 led to a conflict inside Kashmir, but when India felt at a disadvantage, it took to aggression across the international border in Pakistan at Lahore and Sialkot.

Despite their smaller size, the armed forces of Pakistan covered themselves with glory during a conflict that lasted 17 days. A cease fire was declared in response to resolutions by the Security Council, after the Soviet Union offered to play host to a summit conference to restore durable peace between the two countries.

This writer had the privilege to take part in the Tashkent Conference, held in January 1966. Initially, a deadlock ensued between the two sides, with India interested in a no-war pact while Pakistan pressed for a Kashmir resolution.

Under pressure from both Washington and Moscow, President Ayub accepted a declaration, largely drawn up by the Soviet hosts, whereby both sides were to withdraw to their positions before the conflict, and resume normal relations.

Only a passing reference was made to the need to resolve outstanding issues through peaceful means. This writer also had the honour of participating in the Shimla Conference, and must pay tribute to the manner in which Mr Bhutto handled the negotiations with Mrs Indira Gandhi.

The text of the Shimla Agreement provides for India's preference that bilateral problems be decided on a bilateral basis. India has tried to use this clause to oppose the reference of the Kashmir dispute to the UN.

However, the very first article states that the UN Charter which allows resort to good offices or mediation of third parties, would govern relations between the two countries.

Pakistan's position is also safeguarded in Clause 4, while Clause 6 specifically provides that the leaders of the two countries would meet again to resolve outstanding issues, including "the final settlement of the dispute over Jammu and Kashmir".

As the two countries remained preoccupied with other problems, notably the 10-year war in Afghanistan, the Kashmir issue lay dormant, though the people of Kashmir continued to oppose Indian occupation.

Since 1989, which was the "year of democracy" all over the world, an indigenous struggle has been waged by the people of Jammu and Kashmir for liberation from India's occupation.

India, however, alleges that the insurgency has been encouraged and sustained by Pakistan, while latter maintains that its backing is limited to political and diplomatic support to the Kashmiri struggle, in which over 80,000 Kashmiris have been killed.

Following the victory of the Hindu extremist BJP in March 1998, India decided to go openly nuclear, and carried out tests in the middle of May. For a fortnight, till Pakistan replied with tests of its own on May 28, India not only displayed arrogance, but some leaders even demanded that Pakistan should vacate Azad Kashmir.

The tests by Pakistan restored strategic parity and led to a recognition that another conflict over Kashmir could result in a nuclear holocaust. The UN Security Council Resolution passed on June 6 not only called upon the two countries to give up nuclear weapons but also urged a solution of their disputes, including Kashmir.

The sole superpower, the US, also urged them to seek a peaceful settlement of their disputes. The acquisition of nuclear capability by Pakistan led to a rethinking in India, and Prime Minister Atal Behari Vajpayee visited Lahore, in February 1999.

As a result of talks with Prime Minister Nawaz Sharif, the Lahore Declaration was signed, reflecting the resolve of the two countries to live in peace and to resolve the Kashmir dispute through peaceful dialogue.

Soon after returning, the BJP government was defeated, with Mr Vajpayee continuing as caretaker prime minister. However, the outbreak of a conflict in Kargil, where Kashmiri Mujahideen crossed the Line of Control into Indian held territory, changed the atmosphere completely, with India accusing Pakistan of double-dealing.

Mr Vajpayee won the elections held in September-October with an increased majority. The date the result was announced (October 12) also coincided with the day General Pervez Musharraf assumed power, after Prime Minister Nawaz Sharif tried to remove him while he was abroad.

From the day he assumed power, General Musharraf concentrated on internal reforms, and called for the resumption of a dialogue with India, specially to find a negotiated solution of the Kashmir problem.

It took India nearly two years to resume the dialogue, when President Musharraf was invited to Agra in July 2001. The summit with Mr Vajpayee almost produced an agreement but it was vetoed by the BJP hard-liners.

It was, however, agreed that a summit would be held in September 2001 when both leaders would be in New York. The 9/11 terrorist attack in the US shifted the focus to terrorism, and India tried to get Pakistan declared a terrorist state for backing Kashmiri "terrorists".

By staging a terrorist attack on the Indian parliament in December 2001, the Indian government found a pretext to concentrate its entire armed forces along the border with Pakistan.

Pakistan had to take counter-measures, and the confrontation lasted till October 2002. During this time, President Musharraf kept calling for a resumption of the dialogue. Mr Vajpayee agreed to visit Pakistan at the start of 2004, for the 12th Saarc summit.

The resumption of the composite dialogue was announced on January 6, after a summit with General Musharraf. The first round, held between February and May 2004, saw only a passing reference to Kashmir.

The BJP lost the general elections, and a Congress government came to power. Prime Minister Manmohan Singh declared that the dialogue would be maintained. President Musharraf met the Indian prime minister in New York, in September, where the two sides reiterated their commitment to the dialogue, and to address all issues.

It was only when the time approached for resuming discussions, that India's inflexibility came to light. After the New York meeting the Indian prime minister hardened his stance by stating that India would not accept any changes in the existing map. In other words no substantive transfer of territory would be considered.

President Musharraf has been pressing for some progress on Kashmir, where the indigenous struggle has continued. He even came up with some detailed options in November 2004, ranging from regional plebiscites, to autonomy, condominium, and temporary UN jurisdiction of disputed areas.

He later clarified that these were not formal proposals, but just some options to encourage debate. Pakistan's official stance remains unchanged, though it had hoped its display of flexibility might lead to a similar response by India.

So far, while some discussion of options has begun, the Indian side is not only maintaining its inflexibility, but has also stressed that any expectations of a quick resolution of the Kashmir dispute would be unrealistic.

With the CBMs having generated a lot of goodwill, it might be better to concentrate on less contentious areas such as trade, travel, and cultural exchanges. India might accept the construction of an oil pipeline from Iran via Pakistan, and is pressing for transit facilities to Afghanistan and Central Asia.

But on Kashmir, Indian political leaders have rejected a time frame. Can genuine friendship and trust be developed when a core issue, such as Kashmir is relegated to the future? Perhaps Indian expectations are that if substantial benefits result from a cooperative relationship, Pakistanis will accept the status quo in Kashmir. However, support for the Kashmir cause has mounted in Pakistan, and the world needs to pay more attention.

A reign on the wane?

There's a trace of what might be called the "Eliza Doolittle Factor" at this year's gathering at Davos, Switzerland, of global movers and shakers. Instead of the usual griping about tutelage from arrogant Americans - who play the Henry Higgins role in the globalization drama - there's a new note of independence and even defiance, as in Eliza's famous refrain: "I can do bloody well without you."

The Elizas say they're going their own way, Henry be damned. Every European nation has now signed the Kyoto Protocol on global warming, which will go into effect next month despite the Bush administration's disdain.

The French, British and German leaders are each making star appearances in Davos, announcing their own paths into the future as if the United States doesn't matter. British Prime Minister Tony Blair called on Wednesday for global action on climate change, regardless of American scepticism.

French President Jacques Chirac, piped in from Paris via television, proposed a new regime for financing global development through taxes on currency trading, secret bank transactions, airline tickets and jet fuel. That's the sort of big idea that's supposed to be left to the Americans, Jacques. But not this year.

But they can't do without America, really. Or at least they can't ignore the consequences of US actions. The United States still casts a very long shadow here, even though no senior official of the Bush administration attended the World Economic Forum this year.

The American shadow last week was not Iraq, surprisingly enough, but the ballooning US trade and budget deficits - which are seen by the Elizas as evidence that old Henry has finally lost it for good. You hear griping about the deficits from European finance ministers, economists, bankers and hedge fund managers.

They talk about the Bush administration sometimes as if it were a runaway train, but they recognize that an American financial crack-up will hurt Europe and Asia almost as much as the United States.

The concern about U.S. fiscal imbalances is shared as well by most of the American business leaders and economists I talked to in Davos. Indeed, it's hard to find anyone who isn't concerned, except the eternal optimists who inhabit the White House.

The basic analysis runs like this: Thanks to aggressive fiscal and monetary stimulus, the United States is consuming about six per cent more than it produces, resulting in a $600 billion trade deficit last year.

To finance this extravagant over consumption, America is in effect selling off claims on its future income, in the form of US Treasury securities that are purchased by the rest of the world.

It may sound like a sweet deal for America, a bit like a group of skinny guys pooling their money to buy candy for the fat man at the head of the table. The problem is that it's unsustainable.

America's debt to the rest of the world is already about $3 trillion. In another 10 years, it could total about $11 trillion. Just paying the interest on that debt will cost over $500 billion a year. But that's assuming the skinny guys will be willing to keep buying goodies for the fat guy - which they won't.

"I'm increasingly concerned about the global current account balances," German Finance Minister Caio Koch-Weser told me. He argues that the Bush administration needs to show financial markets quickly that it is serious about bringing its deficits under control.

Economist Fred Bergsten advised bankers and hedge fund managers at a dinner meeting here that, given these imbalances, "It is inevitable that the dollar will fall much further. The only question is how far, and whether it will be a free fall."

Bergsten predicts a further 20 percent decline in the dollar. He's been warning for years about a dollar crisis, but even Kenneth Rogoff, a centrist former chief economist for the International Monetary Fund who is now a professor of economics at Harvard, thinks there's a greater than even chance that the dollar will fall 20 per cent.

"Americans are so profligate that we're making everyone else look good," says Rog off. He notes that even the currencies of perennial financial basket cases, such as Brazil and Turkey, have been strengthening recently against the dollar.

The Elizas of Davos may wish they could be rid of the wastrel Henry for good, but they know that's impossible. So they are watching for some sign that the old boy has come to his senses.

A big test will come when President Bush delivers his State of the Union speech. If he doesn't make a believable commitment to fiscal responsibility, look for the Elizas holding dollars to shout: Sell! -Dawn/Washington Post Service