Finance ministers and central bankers from developing and advanced economies are gathering in Washington for meetings Friday through Sunday of the World Bank and International Monetary Fund.
The meetings occur amid the deepest economic slowdown in the post-World War II period. Growth has turned negative in Europe, Japan and North America while decelerating in China and India. IMF managing director Dominique Strauss-Kahn says the sharp decline in trade worsens an already bleak economic outlook.
"In this crisis, exports from the one [developing countries] and imports from the other [advanced economies] have decreased a lot," said Dominique Strauss-Kahn. "And this collapse of trade is bad news, and rather recent news. So we have to take this new news into account when making our forecasts."
In part because of diminishing trade flows, the IMF has sharply marked down, even from January, its global economic outlook. Robert Zoellick, the president of the World Bank, says as governments respond to contracting economies they are pushed politically to protect domestic industries. Zoellick says in the weeks since leaders of major developing nations and advanced economies (the G20) met in London, there have been proliferating protectionist pressures.
"Since that G20 meeting less than three weeks ago, nine G20 countries have taken or are considering 23 measures that restrict trade at the expense of other countries," said Robert Zoellick. "That's almost half of the G20 member states."
G20 finance ministers will meet Friday to discuss trade and other measures that might arrest the global downturn. Their gathering follows a meeting earlier Friday of finance ministers from seven leading industrial countries (Europe, US, Canada, and Japan), the Group of Seven that has traditionally set the agenda for the IMF and World Bank.