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World Bank dismisses protectionism

World Bank president says 2009 is turning into a “dangerous year” for the economy.

Robert Zoellick
Zoellick warned G20 leaders against repeating measures taken during the 1930s' depression [AFP]
Published On 13 Mar 2009

He spoke to reporters a day after warning that growth in the world economy was likely to fall by up to two per cent this year – the first contraction since the second world war. 

The Group of Twenty

 undefined G20 was established in 1999 as a forum for industrialised and developing economies to discuss global economy issues

undefined It groups Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom, the United States and the European Union

undefined The International Monetary Fund (IMF) and the World Bank also participate in meetings

undefined Together, member countries represent around 90 per cent of global gross national product, 80 per cent of world trade and two-thirds of the world’s population

The G20 finance ministers are gathering in Horsham, outside London, on Saturday to lay the groundwork for a G20 heads of state summit on April 2.

Zoellick said that governments may have to provide fiscal stimulus into 2010, but stressed that such action should come “within a framework of fiscal sustainability”.

Finance ministers and central bank leaders from the United States and Europe are divided on whether stimulus packages or tighter regulation of the finance sector should be the way forward.

Conflicting statements made in the last week suggest the meeting on Saturday could be hampered by disagreements.

While the US wants a co-ordinated international stimulus to fight the slowdown, some European leaders favour tightening regulation of markets and institutions.

Angela Merkel, the German chancellor, said on Friday that she did not favour a new package of economic stimulus measures.

Timothy Geithner, the US treasury secretary, said on Wednesday that he
would recommend the G20 nations to support “substantially increasing emergency IMF resources” and called for them to lend to countries hit hard by the financial crisis.

Source: News Agencies