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CJ Cregg
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Joined: 05 Oct 2002
Posts: 1254
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 Fri Feb 04, 2005 12:04 pm US rejects UK plan to boost aid |
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The US remains opposed to a UK proposal to boost aid for the world's poorest countries, saying it is unnecessary.
Chancellor Gordon Brown used the London G7 meeting of finance ministers and central bankers to call for the $100bn International Financing Facility (IFF).
Before the meeting, US Treasury Under-Secretary John Taylor dismissed the plan outright, saying the US wanted to switch money from loans to grants.
The UK, which has support from other G7 countries, is trying to get US support.
The G7 ministers will discuss the proposals at the two-day meeting, due to conclude on Saturday.
In his opening speech, Mr Brown also called on the world's seven richest nations to remove barriers to global trade, and to promote global stability and growth.
Ahead of the G7 meeting in London, which kicks off the UK's one-year presidency of the G7 club, he called on them to "rise to the global challenge".
In other developments:
* Ministers want to use the meeting to tackle the issue of the Chinese yuan, which is pegged to the dollar, and is seen by some as forcing other currencies - particularly the euro - to bear the brunt of the falling dollar
* Ministers not only from China but also from India, Brazil and South Africa are at the meeting in order to ensure that the biggest non-industrialised economies are also represented
* The US wants to stress its view that the other six G7 countries need to loosen regulations so as to encourage faster growth
* The UK is calling for an increased pace of debt relief for poorer countries
* In a keynote speech, US Federal Reserve chairman Alan Greenspan said the US is on track to stabilise its massive trade deficit
* Parallel discussions - organised by the UK Treasury - on advancing enterprise are also taking place.
Cold water
Mr Taylor - deputising for Treasury Secretary John Snow, who is unwell - has been particularly vocal in the past in dismissing the IFF.
"Not only does the IFF not work for the US, we don't need the IFF," he told reporters while heading for the meeting on Friday morning.
He also poured cold water on another UK idea: to fund debt relief by revaluing and selling part of the International Monetary Fund's gold reserves.
And he reiterated his own preferred option, of switching international aid from loans to grants. The US argues this will prevent countries becoming burdened with new debts, while critics say it will rapidly drain available aid coffers.
Non-governmental groups were unsurprised by the response.
"This is what we expected from the US," said charity ActionAid's policy officer, Romilly Greenhill.
Imbalance
On China, Mr Taylor said he was looking forward to a "candid" discussion about the yuan and wanted Beijing to "move as quickly as possible to a flexible exchange rate".
China, for its part, showed little sign of budging.
Chinese newspapers have suggested that there is a "mature" consensus for "fine-tuning" the yuan's dollar peg.
But the governor of China's central bank gave away no clues on future exchange rates at a press conference on Friday, which he used to reiterate China's willingness to work with international bodies like the G7 to "keep the global economy more balanced".
On Friday night, the finance ministers and central bank governors will attend a working dinner. The meeting concludes on Saturday. |
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