Friday April 24, 05:49 PM
G20 finance chiefs to discuss crisis response
By Veronica Smith
WASHINGTON (AFP) - World finance chiefs meet Friday in Washington to assess progress on their London Group of 20 summit pledges to combat the worst global economic crisis since the 1930s Great Depression.
The G20 industrialized and developing nations, including China and Russia, were to discuss the outcomes of the London summit, held three weeks ago, when leaders agreed to forge a coordinated response to the crisis.
They follow a gathering of the finance chiefs of the Group of Seven, which has represented the developed economies for decades and traditionally meets on the eve of International Monetary Fund and World Bank spring meetings.
Friday's G20 comes after the IMF sharply downgraded its outlook on global output this year and forecast only a weak recovery in 2010, a grim scenario seen at risk if countries fail to pull together and follow through on their commitments, officials say.
US Treasury Secretary Timothy Geithner, the host of the G20 and G7 meetings, and other top officials have repeatedly warned that a sustained effort is needed to fight the vicious cycle of a slowing economy and tight credit.
"In recent weeks, there have been some encouraging signs that the global economic downturn may be slackening. Conditions in some financial markets have improved and the decline in world trade may be abating," Geithner wrote in an opinion piece in Friday's Financial Times.
"However, real progress requires time, and significant risks and challenges remain," he warned.
"Thus, it is critical that we continue to act together to strengthen the basis for global recovery. We have an agreed strategy and a common imperative to implement our strategy with energy and dedication to our shared objectives."
Britain's finance minister, Alistair Darling, highlighted Friday the need to protect the important role of the emerging market economies as engines of global growth.
"You've got to make sure that we help these economies now," Darling told the Council on Foreign Relations, a Washington think-tank.
"In the long term, you need to make sure that all economies benefit," he said.
The IMF projected the global economy will contract 1.3 percent this year and grow only 1.9 percent in 2010 in its World Economic Outlook report Wednesday.
There are some signs the economic crisis is easing in Europe but any real recovery will depend on the return to health of the stricken banking sector, an IMF official said on Friday.
"I think we are all hopeful that this is really the beginning of a changing situation," said Marek Belka, head of the IMF's European Department when asked about several recent indicators which suggest the slump is bottoming out.
Belka stressed however that "this is contingent on good policies" and the absolute need to get the stricken financial sector working again.
"Let me reiterate with all force, it all depends on how efficiently we will deal with the financial sector. How efficiently we clean (up) our banks. Nothing will work properly and fast enough without it."
A dire World Bank/IMF report said Friday said the crisis was putting in danger attaining the United Nations' 2015 Millennium Development Goals which focus on poverty reduction, especially in Africa..
The global economic crisis means up to 90 million more people will remain trapped in extreme poverty this year while the chronically hungry could top one billion, said the report, entitled "A Development Emergency."
The IMF and the World Bank, 185-nation Washington-based institutions, are to hold their spring meetings Saturday and Sunday.
The IMF was the main beneficiary at the G20 summit whose leaders agreed to triple the amount of money it has to fund countries in difficulties to 750 billion dollars.
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