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Archive for Sunday, April 25, 2004

G-7 pledges funds for war on terror

IMF leaders say economy improving

April 25, 2004

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— The world's wealthy nations promised Saturday to take new steps to promote growth in the global economy, while protesters banged pots and pans to try to focus their attention on the poor.

Concern about the health of the world economy and the plight of developing countries emanated from both sides of the police barricades in the U.S. capital as global financial leaders launched two days of talks at the International Monetary Fund and World Bank.

"We share the increased optimism regarding the global recovery," said Sudan Finance Minister Elzubier Ahmed Elhassan, briefing reporters inside the IMF headquarters. "But we need to remain vigilant. ... Poverty is a major contributor to global instability."

"Another world is possible," declared protest organizer Robert Weissman of the Mobilization for Global Justice, which called on the IMF and World Bank to cancel the debts of poor countries, stop telling them how to run their finances and end support for environmentally damaging projects.

The G-7 countries -- the United States, Canada, Britain, Germany, France, Italy and Japan -- pledged to take additional steps to promote global economic growth and boost employment, including tax, spending and labor market reforms and a renewed commitment to reducing trade barriers.

The G-7 ministers and IMF overseers promised to work together to combat terrorist financing, help fund the reconstruction of Iraq and Afghanistan, foster economic development throughout the Middle East, and improve strategies for reducing global poverty, such as providing more aid in the form of grants rather than loans, and working in partnership with Third World entrepreneurs and small businesses.

They also discussed ways to enhance the flow of remittances, money sent by guest workers to their home countries. Remittance payments have grown to more than $100 billion a year, and have become an increasingly important element of global financial flows. But the cost of transmitting money tends to be high, limiting the potential beneficial effects in the recipient countries, officials said.

Finance ministers and central bank governors from the Group of Seven industrial nations emerged from a morning summit to declare that the global recovery was gathering speed, but remained subject to risks such as high oil prices.

"Rising energy prices can have a negative effect on world GDP growth," said U.S. Treasury Secretary John Snow, remarking on a run-up that has pushed the spot price of oil as high as $38 a barrel, compared with about $26 a year ago. Gasoline prices have exceeded $2 a gallon in California.

A protester marches near the World Bank and IMF headquarters in
downtown Washington, D.C., during the IMF and World Bank 2004
annual spring meetings. Protesters rallied against trade deals and
war during Saturday's demonstrations.

A protester marches near the World Bank and IMF headquarters in downtown Washington, D.C., during the IMF and World Bank 2004 annual spring meetings. Protesters rallied against trade deals and war during Saturday's demonstrations.

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