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SEPTEMBER 14TH, 2011 05:10 PM
WASHINGTON, Sept 14 (Reuters) – World Bank President
Robert Zoellick said on Wednesday the world had entered a new economic danger
zone and Europe, Japan and the United States all needed to make hard decisions
to avoid dragging down the global economy.
“Unless Europe, Japan, and the
United states can also face up to responsibilities they will drag down not only
themselves, but the global economy,” Zoellick said in speech at George
Washington University.
“They have procrastinated for too long on taking
the difficult decisions, narrowing what choices are now left to a painful few,”
he said ahead of meetings of the World Bank and International Monetary Fund next
week.
His bluntly-worded speech highlighted mounting fears among global
policymakers about an escalating sovereign debt crisis in Europe, which has for
now overshadowed investor concerns about public finances and reforms in the
United States and Japan.
Just as those very countries had called on China
to be a responsible global stakeholder as a rising economic power, so too must
they act responsibly and face up to their economic problems, Zoellick
added.
Chinese Premier Wen Jiabao weighed in earlier and called on
developed countries to take responsibility for fiscal and monetary policies to
avoid the European crisis from spreading. For details, see
[ID:nnL3E7KE070]
Meetings of global finance and development leaders in
Washington next week will focus on Europe’s debt woes and the risk of a Greek
debt default, which has fed growing alarm in financial markets.
Mixed
signals from European leaders have escalated concerns the 17-member euro zone
may be unable to unite behind a common approach to tackle the
crisis.
Zoellick said European countries were resisting difficult truths
about their common responsibilities, Japan had held off on needed economic and
social reforms, and political differences in the United States were
overshadowing efforts to cut record budget deficits.
“The time for
muddling through is over,” Zoellick said. “If we do not get ahead of events; if
we do not adapt to change; if we do not rise above short-term political tactics
or recognize that with power comes responsibility, then we will drift in
dangerous currents.”
Zoellick’s speech focused on the shifting global
landscape in which emerging market economies are playing a greater role in the
world economy — and increasingly in development.
He said developed
countries had yet to fully recognize these global shifts were underway and still
operated under a “do what I say, not what I do” policy. They preached fiscal
discipline but failed to rein in their own budgets, and advocated debt
sustainability yet their own debts were at record highs, he
said.
Zoellick also said it was time to rethink foreign aid, saying that
while aid remains a life or death issue for millions of people around the world,
it had also become a vehicle for helping poorer countries develop and grow, he
said.
“In a world ‘Beyond Aid,’ assistance would be integrated with –
and connected to — global growth strategies, fundamentally driven by private
investment and entrepreneurship,” he said. “The goal would not be charity, but a
mutual interest in building more poles of growth.”
He said development
also meant tapping the power of women by eliminating gender
inequality.
“We will not release the full potential of half of the
world’s population until globally we address the issue of equality; until
countries, communities, and households around the world acknowledge women’s
rights and change the rules of inequality,” Zoellick said.
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WASHINGTON, Sept 14 (Reuters) – World Bank President
Robert Zoellick said on Wednesday the world had entered a new economic danger
zone and Europe, Japan and the United States all needed to make hard decisions
to avoid dragging down the global economy.
“Unless Europe, Japan, and the
United states can also face up to responsibilities they will drag down not only
themselves, but the global economy,” Zoellick said in speech at George
Washington University.
“They have procrastinated for too long on taking
the difficult decisions, narrowing what choices are now left to a painful few,”
he said ahead of meetings of the World Bank and International Monetary Fund next
week.
His bluntly-worded speech highlighted mounting fears among global
policymakers about an escalating sovereign debt crisis in Europe, which has for
now overshadowed investor concerns about public finances and reforms in the
United States and Japan.
Just as those very countries had called on China
to be a responsible global stakeholder as a rising economic power, so too must
they act responsibly and face up to their economic problems, Zoellick
added.
Chinese Premier Wen Jiabao weighed in earlier and called on
developed countries to take responsibility for fiscal and monetary policies to
avoid the European crisis from spreading. For details, see
[ID:nnL3E7KE070]
Meetings of global finance and development leaders in
Washington next week will focus on Europe’s debt woes and the risk of a Greek
debt default, which has fed growing alarm in financial markets.
Mixed
signals from European leaders have escalated concerns the 17-member euro zone
may be unable to unite behind a common approach to tackle the
crisis.
Zoellick said European countries were resisting difficult truths
about their common responsibilities, Japan had held off on needed economic and
social reforms, and political differences in the United States were
overshadowing efforts to cut record budget deficits.
“The time for
muddling through is over,” Zoellick said. “If we do not get ahead of events; if
we do not adapt to change; if we do not rise above short-term political tactics
or recognize that with power comes responsibility, then we will drift in
dangerous currents.”
Zoellick’s speech focused on the shifting global
landscape in which emerging market economies are playing a greater role in the
world economy — and increasingly in development.
He said developed
countries had yet to fully recognize these global shifts were underway and still
operated under a “do what I say, not what I do” policy. They preached fiscal
discipline but failed to rein in their own budgets, and advocated debt
sustainability yet their own debts were at record highs, he
said.
Zoellick also said it was time to rethink foreign aid, saying that
while aid remains a life or death issue for millions of people around the world,
it had also become a vehicle for helping poorer countries develop and grow, he
said.
“In a world ‘Beyond Aid,’ assistance would be integrated with –
and connected to — global growth strategies, fundamentally driven by private
investment and entrepreneurship,” he said. “The goal would not be charity, but a
mutual interest in building more poles of growth.”
He said development
also meant tapping the power of women by eliminating gender
inequality.
“We will not release the full potential of half of the
world’s population until globally we address the issue of equality; until
countries, communities, and households around the world acknowledge women’s
rights and change the rules of inequality,” Zoellick said.
[You must be registered and logged in to see this link.]
