Fi­nance lead­ers grap­ple with anti-trade back­lash

G20 min­is­ters to con­clude talks to­day

Kuwait Times - - BUSINESS -

WASH­ING­TON:

World fi­nance of­fi­cials, still search­ing for ways to re­ju­ve­nate a slug­gish global econ­omy, now face the added prob­lem of deal­ing with a grow­ing anti-trade back­lash that threat­ens to make the eco­nomic sit­u­a­tion worse. Of­fi­cials say the so­lu­tion is not to aban­don sup­port for trade but to make sure the ben­e­fits are more widely shared.

Fi­nance min­is­ters and cen­tral bank gov­er­nors from the world’s 20 ma­jor economies are sched­uled to wrap up their talks to­day. At­tacks on glob­al­iza­tion have risen in promi­nence with the June vote in Bri­tain to leave the Euro­pean Union and the US pres­i­den­tial cam­paign of Don­ald Trump.

The G20 talks were be­ing held in ad­vance of the an­nual meet­ings of the 189-na­tion In­ter­na­tional Mone­tary Fund and its sis­ter lend­ing or­ga­ni­za­tion, the World Bank.

Trump has made at­tacks on im­mi­grants in the US il­le­gally and Amer­ica’s huge trade deficits cen­tral tenets of his cam­paign. The root cause of both is­sues has been a pro­longed ane­mic re­cov­ery from the Great Re­ces­sion that fol­lowed the 2008 fi­nan­cial cri­sis, some­thing that of­fi­cials read­ily ac­knowl­edge. “We see growth as too low for too long and ben­e­fit­ing too few,” IMF Manag­ing Direc­tor Christine La­garde told re­porters on Thurs­day. “It’s fer­tile ... ground for po­lit­i­cal dy­nam­ics that can de­press global growth even more.” La­garde said fi­nance lead­ers need to pur­sue broader poli­cies to boost ane­mic growth rates that go be­yond the cur­rent heavy reliance on mone­tary pol­icy to in­clude in­creased govern­ment spend­ing and tax cuts where fea­si­ble and at­tack­ing struc­tural im­ped­i­ments to growth. She said it was crit­i­cal to make greater ef­forts to make sure that the eco­nomic ben­e­fits were more widely shared. Speak­ing at an open­ing news con­fer­ence, La­garde re­fused to specif­i­cally ad­dress the at­tacks be­ing made by Trump, who con­tends that Wash­ing­ton pol­i­cy­mak­ers have failed to reach good trade deals and are let­ting China, Mex­ico and other coun­tries pur­sue un­fair trade prac­tices that have cost mil­lions of Amer­i­can jobs and re­sulted in stag­nant wage growth. Trump has also vowed to crack down on il­le­gal im­mi­gra­tion.

US elec­tion

“I don’t com­ment on US elec­tions. I sim­ply note that trade has been ... a great en­gine for growth,” La­garde said, adding that trade has helped lift mil­lions of peo­ple around the world out of poverty. In Bri­tain, the June 23 vote to leave the EU was also seen as a back­lash against glob­al­iza­tion and rising lev­els of im­mi­gra­tion in Europe. La­garde said in­stead of aban­don­ing ef­forts to lower trade bar­ri­ers, now was the time to make sure the ben­e­fits of trade were more equally shared. She said there was a need for “in­clu­sive­ness, the de­ter­mi­na­tion to make it work for all, to pay at­ten­tion to those at risk of be­ing left out.” World Bank Pres­i­dent Jim Yong Kim said there are now more de­vel­op­ing na­tions in re­ces­sion than at any time since 2009 at the depths of the Great Re­ces­sion. — AP

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