Archive for Sunday, April 21, 2002

Global powers ratchet up economic war on terror

April 21, 2002


— The world's top economic powers agreed Saturday to intensify efforts to combat terrorist financing and also adopted a plan to better deal with international debt crises.

Finance officials acknowledged that rising oil prices and Argentina's economic woes threaten the fledgling global recovery. But they expressed confidence that the world's economy was on the mend after a U.S. recession and the Sept. 11 attacks.

"Economic recovery from the slowdown is under way," finance ministers and central bank presidents from the seven wealthiest countries said in a joint statement after the discussions among the United States, Japan, Germany, France, Britain, Italy and Canada.

Those talks, led by Treasury Secretary Paul O'Neill and Federal Reserve Chairman Alan Greenspan, were followed by a broader meeting among those countries and others on the 24-member steering committee for the International Monetary Fund.

This panel heard a personal appeal for new IMF loans from Jorge Remes Lenicov, Argentina's economy minister. However, at the conclusion of Saturday's discussions, the group's final communique repeated past demands that Argentina needs to adopt sustainable economic reforms before new loans can flow.

IMF Managing Director Horst Koehler told a news conference late Saturday that he expected the IMF would not be ready to send a team to Argentina to negotiate new loans until probably mid-May. Koehler said the country's provincial governments had to do more to restrain deficit spending.

O'Neill proclaimed that the Group of Seven countries gained consensus on a range of issues.

"We are of one mind on unified actions," O'Neill said.

He said the group still was split on one major U.S. initiative increasing World Bank aid to the world's poorest countries in the form of grants. Virtually all World Bank assistance now comes through loans that have to be repaid.

European countries said a reliance on grants would deplete World Bank resources unless wealthy nations agreed to significant increases in their contributions.

The battle against poverty, which is seen as a breeding ground for terrorism, has gained new urgency among the wealthy nations since Sept. 11.

On terrorist financing, the G-7 countries announced that on Friday they had for the first time frozen the assets of one group and nine individuals collectively. The administration had been pushing for such concerted action to replace the past practice in which other countries held back and simply followed America's lead.

The finance officials also called on the IMF and World Bank to make assessments of their member countries' efforts to crack down on money laundering and terrorist financing a part of their regular economic reviews.

President Bush attended a U.N.-sponsored conference last month in Mexico aimed at mapping goals to cut global poverty in half by 2015.

The G-7 officials agreed on a plan to deal with debt crises. The issue gained prominence when Argentina halted payments on its $141 billion in foreign debt in December, in what was the biggest government default in history.

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