U.S., Allies Seek Stronger Global Growth
Sat Apr 24, 2:07 AM ET
By HARRY DUNPHY, Associated Press Writer
WASHINGTON - The need for stronger global growth and dealing with the deteriorating security situation in Iraq (news - web sites) are expected to dominate weekend discussions by finance ministers and central bankers from the seven richest industrialized nations.
The G-7 countries — the United States, Japan, Germany, France, Britain, Italy and Canada — have some breathing room to postpone making tough economic decisions given that the global economy — after being battered by recession, terrorist attacks and war — appears to be on the road to a sustainable recovery.
Earlier this week, the International Monetary Fund (news - web sites) raised its forecast for global growth this year to 4.6 percent and 4.4 percent for 2005.
However, the IMF warned that the forecast is threatened by factors such as rising oil prices, which could shave 0.3 percentage point off growth for every $5 per barrel price increase, and rising geopolitical risks in Iraq.
Iraq's two finance officials assured the United States of Friday that efforts to revive the country's war ravaged economy remain on track despite the increased violence, Bush administration officials said.
"The Iraqi delegation underline that their reforms are already bearing fruit, will continue and will last beyond the transition," Treasury Secretary John Snow said.
He and Federal Reserve (news - web sites) Chairman Alan Greenspan (news - web sites) were briefed by Iraqi Finance Minister Kamil Mubdir al-Gailani and Central Bank President Sanan al-Shabibi who gave an optimistic assessment of progress Iraq is making after the war and two decades of Saddam Hussein (news - web sites)'s rule.
Even though Iraq is experiencing the bloodiest month since the U.S. occupation began, the Americans and the Iraqis want to show the rebuilding effort is making progress.
The Iraqi officials joined their counterparts in Washington for the spring meetings of the International Monetary Fund and the World Bank (news - web sites), two lending institutions the Bush administration expects to play a major role in reconstructing Iraq.
Before the G-7 ministers began their talks Friday, they held a special meeting with representatives from 12 nations, the European Union (news - web sites) and international financial institution officials on combatting terrorist financing.
"The recent tragedies in Madrid and Riyadh show clearly that we cannot relax our vigilance and must not slacken our resolve or our efforts to combat this scourge," the group said in a statement.
The G-7 talks conclude Saturday when the ministers issue a communique and head to the IMF-World Bank meetings.
There have been small protests for the past three days in front of the police-protected buildings of the two financial lending institutions two blocks from the White House. But hundreds of anti-globalization protesters are expected to demonstrate Saturday.
Snow and Treasury Undersecretary John Taylor said that the G-7 joint statement would reflect no change in the group's position on currencies from the statement issued by the G-7 in February. That statement urged flexibility in exchange rates, wording aimed at pushing China to allow its currency, currently tightly linked to the dollar, to float freely.
Taylor said the G-7 agenda would focus on cutting the cost of remittance flows to developing countries, economic development in the Middle East and a "strategic review" of the IMF and World Bank to be presented to the G-7 summit in Sea Island, Georgia in June.
The United States and its major economic allies agree on the need to pursue policies to promote stronger global growth, but differences of opinion over how to achieve that persist.
The Bush administration rejected accusations that America's soaring budget and trade deficits were a threat to the global economy.
Also, Europe's top central bankers were giving no hints that they planned to heed calls for further reductions in European interest rates, and European policy-makers were not inclined to move any faster on economic reforms, given the strong political opposition to the reforms that have already been proposed.
news.yahoo.com |
