Asia Pacific Economic Co-operation (APEC) finance ministers called yesterday for continued work on an international financial architecture to stabilize the world slump, reverse the high-tech downturn and cope with the floundering Japanese economy.
"Continued work on the international financial structure and measures designed to reduce volatility are of special interest to us," said New Zealand Treasurer and Minister of Finance Michael Cullen in Suzhou at the Eighth Asia-Pacific Economic Co-operation Finance Ministers Meeting (AFMM).
Cullen urged "better exposure of information and more transparency" to help steady the world's falling financial markets.
"The world economy is facing new challenges, and the present mechanism is not working properly," said Russian First Deputy Minister of Finance Sergei Kolotukhin.
Kolotukhin recommended the finance ministers reassess the impact of structural reforms on world economic growth and the role of international financial organizations.
The Russian deputy minister attributed stagnation in structural reforms to their costs. About 20 per cent of Russia's gross domestic product is spent on structural reforms at present, he said.
Kolotukhin said the slow pace of structural reform in industrialized economies such as the United States, Japan and Western Europe is responsible for the slowdown in global growth.
The world is looking at a combined economic growth this year of an anemic 2.7 per cent, Kolotukhin said.
The growth rate could be even lower if the downturn in the US economy and some Latin American economies persists, he said.
He credited China's good economic performance as a driving engine that would "sustain the economic growth of Asia in general."
Cullen is more optimistic, saying that he doesn't expect the slowdown to go on much longer.
New Zealand has remained relatively safe from the gloomy world economic outlook so far despite the slump, because the island economy is not so dependent on electronics manufacturing as many other economies.
Another pet interest of the New Zealand minister is globalization featured by trade liberalization, which he views as inevitable and useless to resist.
Cullen conceded that concerns over the decline of the environment and working conditions are legitimate, so measures must be taken to prevent those calamities.
Kolotukhin is more cautious and prudent about the globalization trend.
"We are not rejecting the role of globalization in the world economy or the view that it should be continued," he said. "But globalization is not liberalization of everything" and should be introduced "at different paces and by different methods" in different economies.
The Russian deputy minister said some economies have suffered from the process even as others prosper.
Plus, the trend has made economies more interdependent, so a crisis in one economy is provoking risks in many others.
Kolotukhin said it is critical to establish "a new mechanism of global economic management that can command the growth of international financial organizations."
Existing remedies to weak points in the globalizing process are inadequate, he insisted.
Cullen suggested a new approach for the ongoing AFMM, hoping to "establish a proper role for it while ensuring it doesn't duplicate work done by other organizations."
( Chinadaily.com.cn 09/09/2001)