Switzerland ? Afghanistan’s president warned Wednesday that the whole world could suffer from the “wildfire” of terrorism engulfing his region, a grim message for a meeting of political and business leaders already fretting over the threat of global recession.

Formally opening the World Economic Forum, Hamid Karzai gave a sobering rundown of recent attacks attributed to Islamic extremists – among them the assassination of Benazir Bhutto and bombings in Afghanistan and Pakistan that have killed hundreds, including many children.

With militant violence still on the rise in the two nations six years after the ouster of the Taliban, “it seems like the mutant of extremism is dangerously unleashed across the region,” Karzai said. The trend “bodes terribly badly for the whole world,” he said.

With many participants sharing a realization that economic downturn can breed political turmoil, the main focus Wednesday was on the chances for worldwide recession.

World markets remained volatile Wednesday, with Asia closing up and Wall Street staging a stunning comeback but European stocks falling despite the U.S. Federal Reserve’s surprise interest rate cut the day before aimed at shoring up the sagging American economy. The fireworks added weight to fears at Davos that the world could be sliding into recession.