Calls grow to expand G-8 as APEC huddles on crisis
05 Nov 2008 22:21:21 GMT Source: Reuters
(Adds quotes) By Marco Aquino and Louise Egan TRUJILLO, Peru, Nov 5 (Reuters) - Calls grew for large emerging markets such as China to take a bigger role in running the global financial system, as teams from 21 Pacific Rim economies on Wednesday sought to fix broken credit markets. At the meeting of the Asia-Pacific Economic Cooperation forum in Peru, senior officials from the World Bank and International Monetary Fund pushed for an expansion of the club of the world's richest nations -- the Group of Eight -- to include more countries like China, India, Brazil, Mexico, Saudi Arabia and South Africa. Agreements forged in Peru, and at a meeting of top finance ministers and central bankers later this week in Brazil, will help set the framework for a summit of world leaders next week in Washington. "We're going to talk about China having a key role. A global problem needs global solutions, which includes not just advanced economies, but also strong emerging ones," said John Lipsky, the IMF's first deputy managing director. The G-8, which helps set the course of the world economy in annual meetings, includes the United States, Canada, Japan and Russia -- all of which belong to APEC. Other G-8 members are Britain, Germany, France and Italy. A G-8 expansion could dovetail with requests for major developing nations to contribute more resources to the World Bank and International Monetary Fund, in exchange for a greater say in how the two lenders are run. "The idea of the G-8 plus these six countries represents 62 percent of global GDP," said Juan Jose Daboub, World Bank managing director, referring to China, India, Brazil, Mexico, Saudi Arabia, and South Africa. "They are the ones who can do the most, to take helpful actions, so it's important that they be at the table when decisions are made," he said. Daboub said World Bank President Robert Zoellick would take the G-8 expansion proposal to the Nov. 14-15 summit in Washington, taking place under the umbrella of Group of 20, which is comprised of the world's biggest industrialized countries. "Chile believes the voices of developing nations should be heard," Finance Minister Andres Velasco said. "Unlike previous crises, developing nations will keep growing next year, and to some extent Asia, Africa and Latin America will be the engine of the world economy." But not everyone is enthusiastic about expanding the G-8. "As with all things, the more people you have around the table, the more difficult it is to achieve results," Canadian Finance Minister Jim Flaherty told reporters. British Prime Minister Gordon Brown is asking rich emerging economies to step up contributions to the IMF to aid poor developing nations. Some think China, with nearly $2 trillion in foreign reserves, should do more for emerging markets at a time when the IMF's overall funding capacity appears limited and global growth is most robust in the developing world. Calls for bailouts and reforms have intensified as equity and debt markets have plunged this year, prompting central banks to pump billions of dollars into the financial system to stave off a credit crunch that started with the U.S. subprime mortgage mess. The IMF last week created a new Short-Term Liquidity Facility for emerging economies to relieve severe credit strains, although analysts have said it could run dry if lots of nations tap it. While APEC has historically defended free trade and open markets, some members are calling for tighter rules. The diverse group includes the United States and Canada, Asian nations like Indonesia and South Korea, and Latin America's Chile and Mexico. Some APEC members -- from Russia to Mexico to countries in Asia -- suffered severe crises in the late 1990s and despite being on better footing now, nightmares from the last meltdown haunt them. Investors are waiting to see if these governments stick with their market-friendly policies as economies slow. (Writing by Terry Wade and Hugh Bronstein; Editing by Jonathan Oatis)
Investigators inspect burnt cars at the scene of a plane crash in Mexico City November 5, 2008. Mexico's Interior Minister Juan Camilo Mourino, President Felipe Calderon's right-hand man and the No. ...
Peru
