OTHERS

Drop protectionist steps, G-24 tells West

WASHINGTON, APRIL 29. Welcoming the role of the World Bank's increasing support for developing countries efforts to leverage trade and investment for faster economic growth and poverty reduction, the Ministers of the Group of 24 have called on advanced nations to get rid of their protectionist measures such as anti-dumping and countervailing duties.

The G-24, representing developing countries, also called for an end to the subsidies in the developed world as also to slow down the implementation of trade liberalisation agreements especially with respect to agriculture, which imposed a prohibitive cost on the developing nations.

A communique issued at the end of the meeting on Saturday said industrial economies spend over $300 billions on agricultural subsidies, about the total GNP of sub-Saharan Africa. These had a debilitating effect on developing country exports - the estimate of foregone income being in the neighbourhood of $100 billion.

Uneven aid flow

The Ministers noted that the aggregate aid flow to the developing nations was about $60 billions a year; and that the foreign direct investment remained concentrated in the hands of a few countries and that many in the developing world were yet to get investments at the level necessary to spur development.

Talking to reporters, the G-24 chairman and Governor of the Central Bank of Nigeria, Mr. Joseph Sanusi, said the progress made in strengthening the international finance system by way of international codes, standards and practices that were applicable to both the developed and the developing world, was noted.

He said the observance of these codes and standards ``remains voluntary, duly recognising the country specific circumstances and the stage of development, including administrative and financial constraints.'' Welcoming the review on the scope of conditionality, the Ministers said the objective should not be to weaken but to streamline and make it better focussed, more effective and less intrusive.

On the issue of negotiations on the International Development Association reserves, the Ministers urged donors to make sure the IDA-13 was adequately funded to meet the increasing needs of the poorest countries. Africa needed special priority and lending to the region must meet the 50 per cent target agreed upon under previous replenishment, they said.

G-7 optimistic

Meanwhile, brushing aside concerns of the International Monetary Fund and other delegates from the developing world on the implications of the economic slowdown in major economies, the representatives of the Group of Seven industrial nations said the fundamentals were essentially sound.

``The world prospects are good, going forward,'' said the U.S. Treasury Secretary, Mr. Paul O'Neill, stressing that he had a sense of ``real optimism'' after a meeting with his colleagues from Europe,Japan and Canada. Much of the optimism stems from a perception that the U.S. economy has already begun to recover, Japan taking measures to lift its economy and the conditions looking favourable in Europe.

A U.S. Commerce Department report had said the economy grew at a 2 per cent annual rate in the first quarter of this year. According to the Chancellor of the Exchequer of Britain, ``while we are vigilant and aware of the risks, we are cautiously optimistic.'' The U.S. and Europe are keeping a close watch on what the new government in Japan is going to do.

One assessment is that the first statements from Tokyo are in the right direction, but that the measures put in place may first slow the Japanese economy even more before it comes out and starts impacting positively on the global economy.

The formal Spring meetings of the World Bank and the IMF began way here today. Unlike last year when the city was witness to large demonstrations, it is very quiet this time with only a handful of protesters. But the authorities are taking no chances and have cordoned off a few areas around the venue.

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