THE WHITE HOUSE AT WORK
Monday, October 5, 1998
STRENGTHENING THE GLOBAL ECONOMY
Today, every nation has an important stake in our global economy. The expansion of international markets and the growth of the global economy over the past half century have helped lift millions of people out of poverty and raised living standards for millions more. Now a global financial crisis has put much of that progress at risk. We have learned two important lessons during this recent period of instability. First, each country must take responsibility for putting in place sound economic policies that will foster growth and stability. Second, in a global marketplace, each nation's success depends on every other nation's success.
President Bill Clinton
October 5, 1998
Today, President Clinton meets with financial authorities from the leading world economies to discuss the important task of strengthening the international financial infrastructure to meet the challenges of our rapidly expanding and converging global economy as we prepare for the 21st Century.
Planning For The Global Economy Of The 21st Century. Today, finance ministers and central bank leaders meet to discuss proposals for strengthening the international financial architecture. This meeting is a continuation of a process initiated by the President in April. Last month, the President called for this group to meet and develop recommendations to the heads of state by the end of this year. At today's meeting, the finance ministers and central bank governors will present three reports on how best to support and strengthen the global financial infrastructure:
- Transparency and Accountability: The working group will recommend that the private sector enhance the financial information they disclose publicly and recommend that the International Monetary Fund (IMF) release a report summarizing the extent to which an economy meets internationally recognized disclosure standards;
- Strengthening Financial Systems: The working group will recommend several areas, including corporate governance, risk management, and safety net arrangements where standards for sound practices need to be developed;
- Managing International Financial Crises: The report will examine policies to prevent international financial crises and facilitate orderly and cooperative resolution of crises that may occur in the future. The report stresses better management of risk by the public and private sectors, recommends that governments limit the scope and clarify the design of any financial guarantees, and facilitate cooperative and orderly debt workouts should a country be forced to temporarily suspend payments.
A Presidential Plan To Spur The Global Economy. The President has proposed a number of steps to help move the economies of the world out of crisis and into prosperity for the 21st Century:
- Leading Nations Must Act To Spur Global Growth;
- We Must Intensify Our Efforts To Speed Economic Recovery In Asia and explore comprehensive ways to help Asian corporations emerge from debt;
- Assisting Families In Recovering Nations. The President is asking the World Bank, the Asian Development Bank, and the Inter-American Development Bank to explore additional steps to help those who have suffered because of the global economic crisis by: (1) developing a new emergency capacity to lend money quickly; (2) using loan guarantees and other innovative means to leverage private sector lending to emerging markets; and (3) expanding their lending, within their guidelines, to countries now affected by the crisis;
- We Must Be Ready To Respond Immediately If The Currency Crisis Continues and stand ready to activate $15 billion from the emergency fund of the IMF;
- Increasing Export-Import Bank Commitments To Specific Economic Development Projects. The President is asking the Export-Import Bank to establish new short-term credit facilities to make it easier for American businesses to continue exporting to critical Latin American markets. In addition, The Overseas Private Investment Corporation, (OPIC), has developed a new instrument to help emerging economies raise money from international capital markets;
- Meeting Our Obligation to The IMF by meeting our global responsibilities and paying our dues to the IMF.