- The Washington Times - Sunday, January 18, 2004

Economies revive

The world economy will expand overall as much as 3.5 percent this year, according to forecasts by the United Nations, mainly because of accelerated growth in China, India and the United States.

If projections hold, 2004 could be a strong year, U.N. economists said last week in their annual evaluation of the world’s finances. The growth of the world economy was 2.5 percent last year and 1.7 percent in 2002, they said.

“The world economy is gaining momentum,” said Jose Antonio Ocampo, U.N. undersecretary-general for economic and social affairs. He said the recovery is being driven primarily by the United States (4 percent growth), as well as emerging powerhouses such as China (8.5 percent) and India (4 percent).

The U.S. economy should continue to strengthen and will continue to stimulate world economic growth, said Mr. Ocampo, in presenting the annual U.N. survey, titled “The World Economic Situation and Prospects 2004.”

He said Washington should continue spending, rather than adopt a policy to quickly curtail the soaring budget deficit. However, the deficits cannot continue forever, and the U.S. government should try to correct them gradually, he added.

Mr. Ocampo noted China’s role as a “trade hub” and said it is capable of supporting regional and global growth. South and East Asian economies could average 6.2 percent growth in 2004, in large part by taking advantage of increased trading opportunities.

Interestingly, Japan and South Korea owe much of their anticipated growth to trade with China, the first time that they owe so much of their commerce to that market.

“It is a locomotive for Japan’s surprising recovery,” said Mr. Ocampo, whose report found that 12 percent of Japan’s exports are destined for China. Japan’s economy is expected to grow 2.5 percent this year, after a decade of stagnation.

The following were among the other findings:

• Unemployment continues to be a problem in most countries, with job creation lagging even in nations with strong economic performance.

• Latin America had three “very bad years” but is expected to post growth of close to 3 percent in 2004, in part because of Argentina’s recovery and because of improved domestic policies.

• The economies of the Middle East could grow 4 percent this year, but that estimate is subject to political and economic uncertainties in Iraq and the price of oil.

• Western Europe’s economies have a low growth rate but will be helped by the strong euro and low interest rates.

• Africa will gain from rising prices in commodities markets and improved political and economic policies.

Liberian aid sought

The United Nations is seeking $500 million over the next two years to stabilize and rebuild Liberia, the tattered West African nation rich in natural resources but gripped by a generation of instability.

The world body will sponsor a conference in New York on Feb. 5 and 6 in which donors will be asked to help rebuild the country from the ground up. Almost no aspect of Liberian society has been spared by continuous warfare and insurgencies. The country is so devastated that life expectancy has fallen to 41 years, one of the lowest in the world.

But Jacques Klein, a former U.S. Air Force general who is the U.N. special representative in Liberia, expressed confidence during a recent visit to New York. “The overall political and security situation in Liberia is daily growing more stable, and I believe it is now irreversible,” he told reporters last week.

Former President Charles Taylor has been in exile in Nigeria for three months, and Liberians are cobbling together a new government with U.N. assistance. Eight thousand U.N. peacekeepers are patrolling Liberia’s larger cities, and a full authorization of 15,000 blue helmets should arrive by the end of next month, Gen. Klein said.

He praised the United States for underwriting two years of the peacekeeping mission with a $245 million grant, and committing $200 million in bilateral assistance, to be administered by the U.S. Embassy in Monrovia.

Betsy Pisik can be reached by e-mail at UNear@aol.com.

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