Recovery on track, Iraqis say

ASSOCIATED PRESS

Iraq’s top finance officials assured the United States yesterday that efforts to revive Iraq’s war-torn economy remain on track despite the deteriorating security situation in the country, the Bush administration said.

“The Iraqi delegation underlined that their reforms are already bearing fruit, will continue and will last beyond the transition,” Treasury Secretary John W. Snow said after he and Federal Reserve Chairman Alan Greenspan were briefed by the Iraqi officials.

Iraqi Finance Minister Mubdir al-Gailani and Central Bank President Sanan al-Shabibi gave an upbeat assessment of the progress being made to revive the economy following the war and two decades of Saddam Hussein’s rule.

The administration is eager to highlight that efforts to rebuild Iraq’s economy are progressing — even in the midst of the bloodiest month since the U.S. occupation began.

The Iraqi officials are in Washington for a round of meetings in conjunction with the spring sessions of the 184-nation International Monetary Fund and the World Bank. The Bush administration expects the two institutions will play a major role in financing the reconstruction of Iraq.

World Bank President James Wolfensohn told reporters that his agency had set up operations in nearby Jordan but would not return to Iraq until the security situation was much more secure.

“At the moment, if you have World Bank or United Nations on you, you are a target,” Mr. Wolfensohn said.

This year’s IMF and World Bank meetings were expected to be dominated by a debate over the best ways to promote global growth.

Finance ministers from developing nations known as the Group of 24 issued their own blunt criticism yesterday of what they saw as the failure of the world’s wealthy countries to do enough to promote sustainable global growth.

The G-24 ministers called for “more resolute and credible action than currently envisaged” to deal with the U.S. budget and trade deficits. They also said that the European Central Bank, which handles monetary policy for nations using the euro currency, should ease interest rates to attack still-sluggish European growth.

Mr. Snow, however, insisted that the administration had a plan to cut the budget deficit in half in five years, and that President Bush’s tax cuts had been a critical factor in jump-starting a sluggish global economy.

“Those who point to our budget deficits as a threat to global prosperity are misguided in their thinking,” he said in an opinion column published yesterday in the Financial Times.

All the disagreements were likely to be papered over when the Group of Seven major industrial countries — the United States, Japan, Germany, France, Britain, Italy and Canada — issue a joint communique today to close out their discussions in advance of the start of the IMF and World Bank meetings.

The IMF was warning that its forecast of strong global growth of 4.6 percent this year could be threatened by such factors as rising oil prices, which could shave 0.3 percentage point off growth for every $5-per-barrel price increase, and rising risks with the deteriorating security situation in Iraq.

In a separate meeting yesterday, Mr. Snow discussed with Zhou Xiachuan, the head of China’s central bank, the case for reforms needed for the country to let its currency float. American manufacturers say that move would end a huge trade advantage China currently enjoys with an undervalued currency.