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World economies engulfed by financial storm, call for joint action
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U.S. President-elect Barack Obama is preparing a massive, two-year economic rescue package totaling about half a trillion dollars in the face of a "crisis of historic proportions."

Obama also plans to create 2.5 million new jobs, cut taxes for the poor and middle class and significantly raise investments in energy-saving and other technologies.

As early as in February, the U.S. government announced a 168-billion-dollar package of tax rebates, followed by a 700-billion-dollar bailout plan in October to take toxic mortgage assets off financial companies.

In a further effort to thaw out the credit squeeze, the U.S. Federal Reserve last month unveiled a plan worth 800 billion dollars to buy mortgage-related debts and back consumer loans.

Other major economies are also taking such bold and substantial action in order to overcome the financial meltdown.

On Oct. 13, Britain announced a rescue plan of 37 billion pounds (64 billion dollars) to keep three major banks -- Royal Bank of Scotland, HBOS and Lloyds TSB -- afloat.

The same month, Japan unveiled a 5-trillion-yen (51-billion-dollar) package of spending measures to support its economy. Germany also plans to inject up to 25 billion euros (32 billion dollars) to boost business.

Last month, China announced a 4-trillion-yuan (584-billion-U.S.dollar) economic stimulus package designed to boost domestic demand and maintain fast and steady growth amid the crisis.

Growth in China is considered a key contributor to international efforts to maintain financial stability and promote global economic growth under the current circumstances, analysts say.

Apart from the bold actions on the national level, the financial crisis has prompted unprecedented cooperation among world economies.

During a Group of 20 summit in Washington on Nov. 15, world leaders pledged rapid action to strengthen oversight of major global financial institutions and to seek a breakthrough in the Doha round of trade negotiations by year's end.

A week later in the Peruvian capital Lima, leaders of the Asia-Pacific Economic Cooperation (APEC) member economies vowed to support the Washington Declaration and not to raise new barriers to investment and trade in the next 12 months.

Meanwhile, the IMF and some regional development banks are offering timely aid to countries hit hard by the financial crisis.

The IMF has so far provided aid totaling some 40 billion dollars to such countries including Hungary, Ukraine, Iceland and Pakistan.

The rescue plans from world economies have helped boost investor confidence, stabilize financial markets and spur growth, but prospects for the global economy remain unclear as the financial storm continues to rage.

More effective monetary and fiscal policies are needed to help shore up growth and straighten out the world economy as a gloomy picture seems almost certain in the coming year, said the IMF.

(Xinhua News Agency December 18, 2008)

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