WASHINGTON: Global finance ministers sought ways to strengthen a fragile recovery while trying to resolve differences among themselves over how to do this, particularly friction over currencies. They also want to preserve the close international coordination that brought them together starting in 2008 to prevent the looming threat of the worst recession since the end of World War II from running out of stream. Ministers headed into sessions Saturday of the steering committees of the 187-nation International Monetary Fund and its sister lending institution, the World Bank. The Group of Seven major industrialized countries and G-20, which includes these countries and rising powerhouses such as India, China and Brazil, held informal sideline meetings over the weekend in the run-up to a G-20 summit in South Korea. At the meeting in Seoul, leaders are expected to try to reach some solutions on many of the issues that the finance ministers are grappling with. “We are gathering at a pivotal moment facing a very uncertain future,” the head of the IMF, Dominique Strauss-Kahn told delegates. “Growth is coming back but we all know it is fragile and uneven.” He said the ministers promised their constituents a lot but “we didn't deliver enough. So we need to go for growth, we need to go for jobs but we also need to go for change” in the international financial system. Addressing an issue that formed the backdrop for three days of meetings, Strauss-Kahan said a particular threat to the recovery came from talk of currency wars. He urged ministers to stop trying to manipulate their currencies, ‘this idea that currencies can be used as a weapon.” He said it was understandable some countries facing huge capital inflows wanted to resist the volatility and instability they cause by revaluing their currencies to protect their exports “but it cannot be a long-lasting solution.” Canadian Finance Minister James Flaherty told reporters that the global economy would be the loser if nations followed “beggar-thy-neighbor” currency policies that invite retaliation by other nations. “There are consequences that are bad for a world economic recovery that is fragile by ... countries maintaining relative inflexibility in their currencies,” Flaherty said . Strauss-Kahn and several of the delegates have suggested that what is needed is more cooperation among nations to improve the functioning of the international monetary system instead of governments turning inward and focusing on domestic problems. The global economy is still struggling to emerge from the worst recession since the end of World War II, said Strauss-Kahn. Unless the pace of job growth quickens, he said, “we really face the risk of a lost generation” of young people unable to get work.
