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World Finance Chiefs Convene in Mexico

October 27, 2003|From Associated Press

MORELIA, Mexico — The global economy is too dependent on growth from the United States, Mexico's finance secretary said Sunday, calling on finance officials from the European Union and 19 nations to look for a "more balanced and sustainable growth path."

U.S. Treasury Secretary John W. Snow also attended the meeting and sought donations from the other countries to help rebuild postwar Iraq.

Opening the annual meeting of the Group of 20 nations, Mexico's Finance Secretary Francisco Gil Diaz said the two-day event was aimed at finding ways to help the world economy fully recover. He said the dependence on the U.S. economy was one of several "vulnerabilities that should be overcome with the appropriate policies and measures."

Finance ministers were also scheduled to discuss ways to block funding for terrorists during their meeting in Morelia, 130 miles west of Mexico City.

In brief remarks broadcast to journalists, U.S. Federal Reserve Chairman Alan Greenspan said the U.S. economy had been greatly influenced by the war in Iraq, including an increase in oil prices. He said the economy had come to a virtual standstill in February, before the war.

Gil said ministers would review progress made in stemming terrorist funding. He also urged nations to continue sharing intelligence on terrorists.

"The circle will never be closed for criminals if international information sharing is not strengthened," he said.

On Sunday, Snow met with officials from Germany, China, Argentina, Russia and Mexico, among other nations.

Snow arrived from Madrid where he helped persuade nations to pledge $13 billion in aid to help rebuild Iraq. The figure fell short of the estimated $56 billion it would cost to restore Iraq to pre-Gulf War conditions, and much of the aid was loans that could saddle Iraq with debt.

Snow's spokesman, Rob Nichols, said the United States believed oil revenue and money from the private sector would help the U.S. meet Iraq's needs. But the Treasury secretary still was lobbying nations to help the effort to rebuild the nation.

Snow was expected to urge Chinese officials to move faster to adopt a more flexible currency system. U.S. manufacturers complain that China's currency is undervalued, keeping exports unfairly cheap.

Last month's failed World Trade Organization talks in Cancun, Mexico, aren't on the meeting's official agenda, but ministers were still expected to talk on the sidelines about ways to get negotiations on track.

Mexican Foreign Secretary Luis Ernesto Derbez ended the Cancun talks, saying the WTO's members had too many differences to reach an agreement on cutting subsidies.

Last year, during a meeting in New Delhi, the G20 agreed to phase out subsidies, knock down trade barriers, and eliminate money for terrorists.

The group is made up of the European Union and 19 countries -- Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, Britain and the United States. Their economies account for about 80% of global income, and the nations comprise more than 60% of the world's population.

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