For G-20, a struggle over growth and debt By Howard Schneider Washington Post Staff Writer Sunday, June 27, 2010 TORONTO -- The world’s developed countries have built extensive public health systems, promised citizens a paycheck for life and erected a welter (i.e. disordered mixture) of protections around some industries and types of jobs. Now their leaders are conferring over a singular dilemma: how to take some of it back without undermining the economies they are trying to sustain. In economic terms, it is a bit like creating a perpetual motion machine -- cutting tens of billions of dollars in public spending would almost certainly slow growth but is considered necessary to tame record levels of government debt. And in a series of recent reports, the International Monetary Fund has suggested that it might be just as tricky to demand unheard-of levels of coordination among the world’s major economies and require politicians to sustain what might prove to be a painful reform process for several years. An IMF report to the Group of 20 major economies “has to go through a lot of contortions (i.e. adaptations or improvements)” to show that developed world debt can be brought down without undermining growth, said Eswar Prasad, a senior economist at the Brookings Institution and former IMF economist, who has reviewed the document. “They have been tweaking (i.e. to adapt sth.) their methods -- the message is that you need to have fiscal cut, but if you do it the right way you won’t have negative growth effects The needed changes range from an overhaul of financial regulations to a retooling of world trade, topics U.S. officials mentioned at the start of the talks this weekend. President Obama pledged to pursue passage of a U.S.-South Korea free trade agreement by fall in hopes of boosting American exports, while Treasury Secretary Timothy F. Geithner said the pending approval of a U.S. financial overhaul package should be complemented by strong actions by other countries on issues such as the rules for bank capitalization. The G-20 -- industrialized countries and major emerging powers that include China and India -- meets Sunday amid debate about the risks that public debt in the developed world poses to the global recovery and how to respond to it without creating another set of problems. Heading into the session, even some of the group’s closest allies seemed divided. “This summit must be fundamentally about growth,” Geithner said on arriving in Canada, just hours after Canadian Prime Minister Stephen Harper emphasized the “strong consensus on the need for medium-term consolidation plans in advanced countries” -- in other words budget cutting. Can the two be resolved? The IMF has published a “Ten Commandments for Fiscal Adjustment in Advanced Economies” that includes a warning from its top economists to “obey these . . . and chances are high that you will achieve fiscal consolidation and sustained growth.” The document acknowledges that the level of budget cutting being planned by the developed world is risky given the weakness in the world economy. Deep cuts are underway in Greece and Spain, and have been proposed in Britain and recommended for the United States and others to begin by next year. But the document also contends that a commitment to more-balanced public spending will stabilize bond markets, bring down interest rates as governments borrow less, and encourage more private investment -- all “growth-friendly” results that will help offset any reduction in government budgets. In addition, the agency says that for the process to work, budget cutting must be accompanied by a broad set of other reforms that would improve economic performance. Public retirement and health programs are singled out: “You shall pass early pension and health care reforms as current trends are unsustainable” is commandment No. 5. Much of the projected increase in future public spending in developed countries is related to the aging of their populations, and changes such as an increase in the retirement age improve future balance sheets without cutting current spending. Labor markets need to be overhauled to make it easier for people to find and change jobs or enter new markets; in recent reports on Greece and France, the agency singled out rules that protect retailers, pharmacists and others from competition. Product markets need to be deregulated. Taxes almost certainly need to increase. And on top of all that, the world’s wealthiest nations will still need some help from emerging markets such as China that have benefited from large trade surpluses in recent years and tucked trillions of dollars of currency reserves into the vaults of their central banks. The emerging markets need to boost their own spending and shift to “internal demand” for future growth, and rely less on spending from developed nations, the IMF said. Synchronizing those efforts on a global scale will be a task in itself. The G-20 asked the IMF to begin the process by collecting economic projections and policy plans from its members, and vetting (i.e.. monitor) them to see how they complement -- or conflict with -- each other, and square with (i.e. match) the IMF’s own forecasts. According to officials who reviewed the IMF’s report, the developed countries appeared too optimistic in their expectations for growth and the recovery of the private sector and too timid in the political decisions being planned to restructure their economies. That, according to one Canadian official, will be a centerpiece of the weekend’s discussions. “Each country is coming in saying here is what we are going to do,” said the official, who is familiar with the talks but is not authorized to speak publicly. The IMF estimates that properly coordinated policies could add about $4 trillion and 30 million jobs to the world economy in coming years, and “we don’t want to leave $4 trillion on the table,” the official said.
According to the “Ten Commandments for Fiscal Adjustment in Advanced Economies” that IFM has published, what kind of loss and gain will be brought upon the developed economies if they cut their public spending or government debt.
ID：9582-11727 Endangered Trade (The Asian Wall Street Journal, Mar., 1999) Such is the special relationship between America and its NATO partners that while that alliance cooperates to bomb Serbian forces, the U.S. and the EU are managing a trade war against each other. Fortunately, no lives are at stake in the latter conflict. Yet if it spreads unchecked, the rest of the world is sure to feel the pain of it. It’s hard to decide whether the U.S. or Europe deserves the most contempt for expanding their trade war. The first fight, over bananas, is essentially a struggle between two fruit distributors with strong political connections. Now Washington and Brussels are escalating their battle over beef, with European farmers stooping to phony science in their claims that hormone-treated American beef is unsafe. In his first term in office, President Bill Clinton teamed up with the Republicans to push major free-trade liberalizations. Now, however, he seems bent on pursuing ‘level even if playing fields,’ torpedoing the world economy. The latest salvo was fired this week, with the U.S. announcing it has targeted close to $1 billion of European products for 100% tariffs if the European Union doesn’t drop the hormone nonsense. The move follows an earlier announcement that the U.S. administration will fight Europe’s banana import regime by hitting a range of European goods with prohibitive tariffs. Add to this renewed American threats to raise the drawbridge to Russian, Japanese and Brazilian steel, as well as administration support for a congressional vote to ban Concorde flights from Europe in relation for EU threats to refuse landing rights to old-American planes retrofitted with noise reducing technology. Mr. Clinton sounded the protectionist battle cry in his January State of the Union address, where he vowed to fight for ‘a freer and fairer trading system for 21st century America.’ In the case of agriculture, when the respective lobbies on both sides of the Atlantic enter the fray, that translates into a sticky situation. On the whole, American farmers are major exporters. And U.S. farmers have a good case on beef hormones. But it is nonetheless dangerous for the U.S. to shut off $1 billion in trade. This is not to excuse the EU. The hormone argument is nonsense. The World Trade Organization has acknowledged as much, ordering the EU to allow imports of American meat by May 13. Brussels has responded by saying that it needs more time because European citizens, who supposedly don’t like hormones in their food, would rebel against their governments if American meat suddenly appeared on their store shelves. Were it not for the high stakes involved for both producers and consumers, the argument might be amusing. When governments curtail trade the global economy shrinks and for all the jobs ‘saved’ by protections, there are a lot more lost. The Smoot-Hawley agricultural protections imposed by the U.S. Congress in the late 1920s certainly contributed to the Great Depression. Mr. Clinton may believe he is fighting the good fight. But we’ve never thought much of the kind of war where you pose even when you win.
ID：9582-11690（本题为引用材料试题，请根据材料回答以下问题） According to the IMF document, what measure should emerging markets such as China take to contribute to the recovery of developed economies and global economy at large?
