Sun, Oct 09, 2016 - Page 16 News List

Protecting workers key: finance leaders

‘ULTRA-LOOSE’:German Minister of Finance Wolfgang Schaeuble blamed negative interest rates and unconventional tactics for the lingering possibility of a new crisis


World finance officials believe that the answer to growing attacks on globalization is not to erect new trade barriers, but to do a better job of protecting workers who are harmed by free trade.

The finance officials were yesterday concluding three days of talks with sessions of the policymaking bodies of the 189-nation IMF and its sister lending organization, the World Bank.

The meetings are coming at a time when there is a sizable anti-globalization backlash following a June vote in Britain to leave the EU and the US presidential campaign of Republican nominee Donald Trump, who has focused on his complaints about illegal immigration and the US’ huge trade deficits.

Trump has threatened to impose punitive tariffs on countries such as China and Mexico that he feels are pursuing unfair trade practices and costing millions of US jobs.

However, officials at these meetings said that a decades-long effort to tear down trade barriers has lifted millions of people in poor nations out of poverty.

They said the problem is that not enough has been done to protect workers who have lost jobs because of the greater competition from developing countries.

“If we really want jobs and higher income, if we care about poverty reduction and economic fairness ... if we care about growth, then we need to be serious about fostering global trade and about making sure that global trade works for all,” IMF managing director Christine Lagarde said on Friday.

World Bank president Jim Yong Kim agreed that at present there is “tremendous anger against trade,” but he said that critics do not understand how important the growth of world trade has been in lifting people out of extreme poverty.

“We are here because we believe in our mission of ending extreme poverty,” Kim said. “We are not going to do it without more robust trade.”

Before the IMF and World Bank meetings, G20 finance ministers and central bank governors renewed a pledge to utilize all the policy tools at their disposal to combat what has been an anemic global recovery from the Great Recession triggered by the 2008 financial crisis.

The G20 officials acknowledged they are confronting a broad range of new risks ranging from the anti-trade backlash to lingering worries in financial markets over whether Britain’s exit from the EU could further drag down growth and possible trigger a new worldwide downturn.

Chinese Minister of Finance Lou Jiwei (樓繼偉), chairman of the G20 finance group, on Friday said that the global situation “remains challenging and complicated,” with growth in many nations still too slow, despite years of aggressive monetary policies by the US Federal Reserve and other central banks.

“Geopolitical tensions are growing, terrorist attacks are frequent... All of these factors have major implications on the international economic and financial markets,” Lou said.

US Secretary of the Treasury Jack Lew told reporters after the G20 discussions that he was encouraged that there was growing support among other nations that more tools needed to be employed beyond monetary policy to boost weak global growth.

The concerns about financial markets were highlighted earlier on Friday when the British pound plunged sharply, sliding 6 percent in just a couple of minutes to its lowest level in more than three decades, before rebounding.

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