As the World Economic Forum (WEF) gets under way once again in the Swiss resort of Davos, there are voices that claim that instead of being a select gathering of the world’s top economic brains who can bounce ideas off each other, the forum has become a media circus.

Even if that were true — and it is questionable — it does not diminish the forum’s immense value as an event at which global issues and possible solutions can be evaluated by those who have the power to initiate change worldwide. But the world economy is not just about sound financial systems. War, natural disaster or political turmoil can do far more to devastate economies and destroy human happiness than, say, a drop in the US housing market. That is why, despite the title, Davos has never been just about pure economics. It is also why, four years ago, the forum set up the Council of 100 Leaders. Its purpose was — and is — to promote dialogue between the Muslim world and the West and to prevent from exploding into outright conflict the simmering resentment that most certainly exists within certain sections on both sides.

Four years on, how much have things improved? The WEF’s report on the state of Muslim-Western dialogue, published this week, makes worrying reading, even if it says that conflict between the two “can be avoided” and that both Muslims and Westerners believe interaction between them to be important. But it also shows that both see the other as being at fault, rather than themselves. A poll commissioned for the WEF suggests that Westerners feel that Muslims do not respect them and Muslims feel that while they respect the West, they are not respected by it.

This is not healthy. Although the number of people canvassed was a mere 1,000 in only 21 countries, there is no reason not to believe the findings or to see them as insignificant. There is Muslim resentment, stemming from an overpowering sense of impotence because of what has happened in Palestine, Iraq and Afghanistan, not to mention Chechnya, Bosnia, Kosovo or the apparent threats to Iran and Syria. Equally, it is folly to pretend there are no fears in parts of Europe about the consequences of large numbers of Muslim immigrants. That there should not be does not change the fact. On both sides then, there is a well of suspicion that too easily can be exploited and used to stir up conflict. Indeed, the report’s finding that most Muslims and Westerners believe conflict can still be avoided only compounds the worry because of the contrary, underlying implication that there will be a conflict unless action is taken.

Dialogue and cooperation between the Muslim and Western worlds are therefore no longer possibilities to be considered; they are courses which must be followed. They are crucial to world peace — far more important than, say, trying to end the US subprime crisis. Nor is it for one side alone to make all the effort. That will only add to the resentment. The effort to understand has to be embraced jointly by both. Otherwise, we face joint catastrophe.