Vow to avert another financial crisis
By Harry Dunphy and Martin Crutsinger |
April 18, 2011, Monday
|
Print Edition
Print Edition
GLOBAL finance ministers and central bankers concluded three days of talks late Saturday with pledges of greater cooperation to avert another financial crisis, leaving uncertain how far they would go in changing their domestic policies in response to international pressures.
Singapore Finance Minister Tharman Shanmugaratnam, head of the International Monetary Fund's steering panel, said at a concluding news conference that all countries realized the importance of policy reform and better coordination as the global economy recovers from the worst economic downturn since World War II.
"Although we are in a better position than a year ago, there are significant vulnerabilities," he said. "We are still in a fragile situation. We have to be extremely watchful."
IMF Managing Director Dominique Strauss-Kahn said it would be critical for all nations to guard against complacency, especially in the face of new threats from higher oil and food prices, which were exacting a heavy toll on the world's poorest nations.
World Bank President Robert Zoellick called the surge in food prices the biggest threat to the world's poor, with 44 million more people being pushed into poverty over the past year due to higher prices.
"We are one shock away from a full blown crisis," Zoellick said at a news conference wrapping up a meeting of the bank's steering committee. Zoellick said the World Bank was pursing a variety of programs to provide support to poor countries struggling with high food costs.
But Max Lawson, a spokesman for Oxfam, the international aid advocacy group, criticized the finance officials for delaying any action on increased support until a meeting of Group of 20 agricultural ministers in June.
"Leaders today said the food crisis is desperately urgent, so urgent they will act on it ... in June. That's 66 days away. Nearly half a million children will have died of hunger by then," Lawson said.
The talks on Saturday followed meetings on Friday of the G20 nations, which include traditional economic powers such as the United States and European nations, and emerging economies such as China, India and Brazil.
The G20 reached a deal on a plan to provide increased monitoring of countries in the G20, starting with seven of the largest nations, to make sure that their government debt, trade balances and investment flows were not rising to levels risky to the global recovery.
Treasury Secretary Timothy Geithner on Saturday said the Obama administration was committed to doing its part to cut America's soaring federal deficit, which is set to hit US$1.5 trillion this year despite approval this week in Congress of a 2011 budget that will trim US$38 billion in spending.
Mexican Finance Minister Ernesto Cordero said the G20 pact for increased surveillance was a significant milestone.
But Brazilian Finance Minister Guido Mantega said that despite the recovery so far in the global economy, many dangers persist.
"The root causes of the crisis - oversized financial sectors, excessive financial risk-taking, destabilizing cross-border capital flows ... have not been fully addressed," Mantega said in his remarks to the IMF meeting. "Not surprisingly, the recovery remains fragile."
Singapore Finance Minister Tharman Shanmugaratnam, head of the International Monetary Fund's steering panel, said at a concluding news conference that all countries realized the importance of policy reform and better coordination as the global economy recovers from the worst economic downturn since World War II.
"Although we are in a better position than a year ago, there are significant vulnerabilities," he said. "We are still in a fragile situation. We have to be extremely watchful."
IMF Managing Director Dominique Strauss-Kahn said it would be critical for all nations to guard against complacency, especially in the face of new threats from higher oil and food prices, which were exacting a heavy toll on the world's poorest nations.
World Bank President Robert Zoellick called the surge in food prices the biggest threat to the world's poor, with 44 million more people being pushed into poverty over the past year due to higher prices.
"We are one shock away from a full blown crisis," Zoellick said at a news conference wrapping up a meeting of the bank's steering committee. Zoellick said the World Bank was pursing a variety of programs to provide support to poor countries struggling with high food costs.
But Max Lawson, a spokesman for Oxfam, the international aid advocacy group, criticized the finance officials for delaying any action on increased support until a meeting of Group of 20 agricultural ministers in June.
"Leaders today said the food crisis is desperately urgent, so urgent they will act on it ... in June. That's 66 days away. Nearly half a million children will have died of hunger by then," Lawson said.
The talks on Saturday followed meetings on Friday of the G20 nations, which include traditional economic powers such as the United States and European nations, and emerging economies such as China, India and Brazil.
The G20 reached a deal on a plan to provide increased monitoring of countries in the G20, starting with seven of the largest nations, to make sure that their government debt, trade balances and investment flows were not rising to levels risky to the global recovery.
Treasury Secretary Timothy Geithner on Saturday said the Obama administration was committed to doing its part to cut America's soaring federal deficit, which is set to hit US$1.5 trillion this year despite approval this week in Congress of a 2011 budget that will trim US$38 billion in spending.
Mexican Finance Minister Ernesto Cordero said the G20 pact for increased surveillance was a significant milestone.
But Brazilian Finance Minister Guido Mantega said that despite the recovery so far in the global economy, many dangers persist.
"The root causes of the crisis - oversized financial sectors, excessive financial risk-taking, destabilizing cross-border capital flows ... have not been fully addressed," Mantega said in his remarks to the IMF meeting. "Not surprisingly, the recovery remains fragile."
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