Group of Seven Focuses on Currencies, Growth | Voice of America - English
The financial chiefs of the Group of Seven leading industrialized nations say their economies are strong, but they warn of possible problems ahead. They also are urging China to make its currency exchange rate more flexible, which could ease some risks to growth.
At the close of their meeting in Singapore, the Group of Seven nations' top finance officials said that growth in Europe and Japan means their overall economic outlook is strong, despite an expected slowdown in the United States. But the finance ministers and central bankers warned Saturday there are risks to their economies - and thus to global growth. Among the problems are inflation, high oil prices, and the collapse of world trade liberalization talks. They also said that developing nations, particularly China, should let their currencies move more freely in foreign exchange markets. The finance chiefs said this would help gradually correct large trade and foreign reserve imbalances. Earlier, the head of China's central bank, Zhou Xiaochuan, said his country is moving toward greater exchange-rate flexibility and that it could eventually consider widening the band within which the yuan trades. China has been under fire for several years from the United States and many European governments, which say that Beijing keeps the yuan artificially weak, making Chinese exports unfairly cheap on world markets. Also Saturday, IMF economists said that for longer-term growth, Asian nations should act to rebalance their economies. "Sustaining Asia's growth is going to require some shift away from heavy dependence on exports and more toward domestic demand," said David Burton, the IMF's Asia-Pacific director. "We think some rebalancing of growth would make the region less vulnerable to shifts in the global economy and would allow people in the region to begin to benefit, I think, more from the rapid growth there has been." Thousands of financial officials and other delegates are in Singapore for the annual IMF and World Bank meeting, which begins Tuesday, and for the preliminary events that have been going on for the past few days. Among those attending are several-hundred activists who have been invited to share their concerns about how the two institutions' programs affect the world's poor. The Singapore government on Friday agreed to allow 22 activists it had previously barred from the country to attend the meeting. Five others remained barred. World Bank president Paul Wolfowitz and other Bank officials had bluntly criticized Singapore's restrictions on activists and their protests. Wolfowitz said it is important for the two multi-lateral agencies to work with rights groups and aid agencies. Singapore officials had said it limited protests and barred some activists to prevent violence and protect against the possibility of terrorist attacks.