Lula: Main G20 Goal To Restore Credit,Confidence,World Trade
Of DOW JONES NEWSWIRES
NEW YORK -(Dow Jones)- Restoring the flow of credit and reviving trade are the biggest issues facing the world economy, Brazilian President Luiz Inacio Lula Da Silva said Monday.
During a wide-ranging discussion with editors and reporters of Dow Jones Newswires and the Wall Street Journal ahead of the Brazil/Wall Street Journal conference in New York, Brazil's president emphasized the urgency to solve the problems stemming from the financial and economic crisis that is gripping the world.
"We have a problem in the world called credit," Lula said. "We need to restore its flow in order to get world trade going again."
Lula said governments of the Group of 20, which consists of industrialized and developed nations, are looking at ways to strengthen the International Monetary Fund so the multilateral institution can then help countries directly. Over the weekend, top finance officials of the G20 met in Horsham, U.K., where outlines of the plan were announced.
"But we must also solve the matters of trust and confidence, and I don't know how we can restore confidence until we can do something about banks," he said.
Lula referred to the woes of the banking sector in the U.S. and other developed nations and said the G20 summit in London on April 2 must take a hard look at banks and come up with a solution.
He said failure to act could result in an outcome similar to that of Japan in the 1990s, which, Lula said, took a long time to address the problem of its banking system, thereby perpetuating the economic crisis that followed the bursting of its real-estate bubble.
Lula said in this financial crisis, it's the middle class that is suffering the most.
"They have gained the most during the boom years, their living standards have improved, they have also gained political rights in general, and they are the ones most vulnerable to lose the ground gained."
The "G20 must do something about this. We can't go to London and end up scheduling another meeting," he added.
Brazil has so far fared well in the current crisis compared with other emerging economies such as Russia. It has managed to grow its economy though that run may be coming to an end as expectations grow that the country could enter six months of economic contraction, the rule-of-thumb definition of a recession.
Current estimates are for Brazil's economy to grow between 1%-1.5% in 2009. However, those expectations may be revised after data showed the country's economy shrank by 3.6% in the fourth quarter of 2008 from the previous quarter.
Top financial officials traveling with Lula expressed confidence Brazil would manage to fare better in the crisis than many other countries.
Brazil's Finance Minister Guido Mantega said Brazil will probably be one of the last countries to enter into the crisis, and among the first to emerge from it. He said he is not worried about inflation, and he is confident the country's low inflation and high productivity will allow it to remain competitive and continue to create jobs.
Mantega also said Brazil is one of the few countries in the world that met its inflation target last year.
Lula added later he finds himself to be more of an inflation hawk than he was 20 years ago, when inflation used to eat away at the earning power of his salary.
Fresh from a weekend visit with President Barack Obama in Washington, Lula said he hopes the new administration starts looking at Latin America with fresh eyes in order to find opportunities for cooperation on a number of subjects, from energy to trade.
"This crisis brings a good opportunity to do things differently," Lula said.
However, he also expressed doubts there would be significant progress this year in global trade accords such as the Doha Round.
Addressing the energy cooperation between the U.S. and Brazil, Lula said he was encouraged by the conversations he had although there were no immediate announcements. There were heightened expectations the meeting with Obama would bring increased cooperation between the U.S. and Brazil in the field of biofuels, such as ethanol.
Speaking about Latin America in general, Lula welcome the election of Mauricio Funes in El Salvador, saying he is a flexible leader who will bring a quality change to the country.
-By Eduardo Kaplan, Dow Jones Newswires; 201 938 2161; eduardo.kaplan@dowjones.com
Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=StXlfP8AHGRffk1%2FkrsLOA%3D%3D. You can use this link on the day this article is published and the following day.
Publié le 16 mars 2009 Copyright © 2009 Dowjones
Commentaires
Faire un Commentaire