Top economic officials from around the world are in Washington this weekend to discuss a wide range of global economic issues - from large national debts to the impact of the unrest in the Middle East. Although experts say the global economic recovery already is well underway, the World Bank and the International Monetary Fund say important challenges remain.
Finance ministers and central bankers attending the World Bank, IMF Spring Meeting in Washington, D.C., agree the threat of another global downturn has receded. But the recovery remains fragile. Ahead of the meeting, IMF managing director Dominique Strauss-Kahn warned leaders not to become complacent.
"It's not the recovery we want because it's still imbalanced between countries and it's also imbalanced within countries," he said. "That's certainly the reason why uncertainty is still very high."
Among the goals for the Spring Meeting is finding ways to measure imbalances that contributed to the financial crisis. Late Friday, finance ministers announced agreement on a mechanism to monitor countries and prod them to take corrective actions when imbalances in areas such as foreign trade or government debt rise to excessive levels.
French Finance Minister Christine Lagarde, chair of the G20 summit in France later this year, called it a significant achievement.
"Suffice to say that we've made, in my view, huge progress in relation to the framework for growth," said Lagarde. "I think agreeing on the indicative guidelines was a major step in the direction of establishing the right policies with the appropriate spillover effects and not negative spillover effects."
With emerging economies growing faster than advanced economies, the World Bank and the IMF say rich countries like the U.S. must do more to reduce debt, while fast growing economies, such as China, should allow currencies to rise to reduce dependency on export markets.
More immediate concerns include the recent spike in oil and food prices. Letsetja Kganyago, director of the South African National Treasury, says food security is high on the agenda for many developing countries.
"This is a basic need for our citizens. And if we are to see the same effects that we have seen in 2008, where you had prices rising to the extent that they did and where you saw in other areas where you had food shortages, then we are going to be running into all sorts of problems," said Kganyago.
Other problems to be discussed at the two-day meeting include high inflation in fast growing economies, and the European debt crisis, which already has resulted in bailouts for Ireland, Greece and Portugal. Ministers also will look at the impact of the Japan earthquake on the global supply chain, and the Middle East turmoil on energy prices.
