News / Economy

IMF, World Bank Say Currency Dispute Could Harm Recovery

International Monetary Fund Managing Director Dominique Strauss-Kahn, right, and World Bank President Robert Zoellick prepare for a meeting of the G-24, during the annual IMF and World Bank meetings in Washington, 07 Oct 2010
International Monetary Fund Managing Director Dominique Strauss-Kahn, right, and World Bank President Robert Zoellick prepare for a meeting of the G-24, during the annual IMF and World Bank meetings in Washington, 07 Oct 2010

Multimedia

Audio

Top international economic leaders said continuing disputes over currencies and trade could escalate and hurt the fragile economic recovery.  The heads of the World Bank and the International Monetary Fund both had blunt warnings Thursday for national and economic leaders.

World Bank President Robert Zoellick says if nations do not stop bickering and start compromising on currency issues, the economic downturn could get far worse.  "First, one needs to manage the tensions, if one lets this slide into conflict or forms of protectionism, then we run the risk of repeating the mistakes of the 1930s."

Those mistakes preceded the Great Depression.

The warning comes as the United States, China, European and other nations continue squabbling over the value of currencies.  Also, Japan recently intervened in markets to push down the value of its currency, the yen.

Zoellick says the tensions grow out of the slow and uneven economic recovery, which is leaving millions of people out of work.  "Whenever you have high unemployment, you have risks of other tensions, we see this now in debates on currencies."

Having a weaker currency can help cut unemployment by boosting exports.  It does this by making a nation's products less expensive and easier to sell on international markets.  More sales mean more demand for products and more jobs.

That strategy will not work, however, if too many nations try to do it at once.  This means the various nations need to work out compromises, but it is hard to make deals right now because high unemployment is putting domestic political pressure on national leaders.

The head of the International Monetary Fund, Dominique Strauss-Kahn, urged political and economic officials to tone down their rhetoric and find less provocative ways to bolster their economies.  "Many (nations) do consider their currency as a weapon, and that is certainly not for the good of the global economy."

The IMF chief also sent a message to emerging economies that have been clamoring for a greater voice in IMF decisions.  Strauss-Kahn said countries that want to have a greater say also need to accept more responsibility for maintaining a healthy global economy.

The IMF and the World Bank have called for China to allow the value of its currency to rise.  But economic experts say one of China's major trading partners, the United States, should also make changes, like cutting budget deficits and boosting savings.

Related video report by Mil Arcega:

You May Like

Is West Doing Enough to Tackle Islamic State?

There is growing uncertainty over whether West’s response to ISIS is adequate More

China Crackdown on Dual Citizens Causes Concern

New policy encourages reporting people who obtain citizenship in another country, but retain Chinese citizenship; move spurs sharp debate More

Video Coalition to Fight Islamic State Could Reward Assad

Losing ground to Islamic State fighters, Syria's government says it is ready to cooperate with international community More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Ukraine Accuses Russia of Territorial Incursionsi
X
Zlatica Hoke
August 28, 2014 4:07 AM
Ukraine says a key border town (Novoazovsk) and surrounding areas of in southeastern Ukraine have fallen under the control of Russia's military. President Poroshenko says "Russian troops have actually been brought into Ukraine." Despite repeated denials from Moscow, Ukraine accuses the Kremlin of providing weapons and fighters to separatists in eastern Ukraine, toward the Russian leadership's alleged goal of annexing that strategic territory. Zlatica Hoke reports.
Video

Video Ukraine Accuses Russia of Territorial Incursions

Ukraine says a key border town (Novoazovsk) and surrounding areas of in southeastern Ukraine have fallen under the control of Russia's military. President Poroshenko says "Russian troops have actually been brought into Ukraine." Despite repeated denials from Moscow, Ukraine accuses the Kremlin of providing weapons and fighters to separatists in eastern Ukraine, toward the Russian leadership's alleged goal of annexing that strategic territory. Zlatica Hoke reports.
Video

Video Made in America Socks Get Toehold in Online Fashion Market

Three young entrepreneurs are hoping to revolutionize the high-end sock industry by introducing all-American creations of their own. And they’re doing most of it the old-fashioned way. VOA’s Julie Taboh recently caught up with them to learn what goes into making their one-of-a-kind socks.
Video

Video Americans, Ex-Pats Send Relief Supplies to West Africa

Health organizations from around the world are sending supplies and specialists to the West African countries that are dealing with the worst Ebola outbreak in history. On a smaller scale, ordinary Americans and African expatriates living in the United States are doing the same. VOA's Carol Pearson reports.
Video

Video America's Most Popular Artworks Displayed in Public Places

Public places in cities across America were turned into open-air art galleries in August. Pictures of the nation’s most popular artworks were displayed on billboards, bus shelters, subway platforms and more. The idea behind “Art Everywhere,” a collaborative campaign by five major museums is to allow more people to enjoy art and learn about the country’s culture and history. Faiza Elmasry has more.
Video

Video Chinese Doctors Use 3-D Spinal Implant

A Chinese boy suffering from a debilitating bone disease has become the first patient with a part of his spine created in a three-dimensional printer. Doctors say he will soon regain normal mobility. VOA’s George Putic reports.
Video

Video Uneasy Calm Settles Over Israel, Gaza Strip

Israel and the Gaza Strip have been calm since a cease-fire set in Tuesday evening, ending seven weeks of hostilities. Hamas, which controls Gaza, declared victory. Israelis were more wart. VOA’s Scott Bobb reports from Jerusalem.
Video

Video India’s Leprosy Battle Stymied by Continuing Stigma

Medical advancements in the treatment of leprosy have greatly diminished its impact around the world, largely eliminating the disease from most countries. India made great strides in combating leprosy, but still accounts for a majority of the world’s new cases each year, and the number of newly infected Indians is rising - more than 130,000 recorded last year. Doctors there say the problem has more to do with society than science. Shaikh Azizur Rahman reports from Kolkata.
Video

Video Scientists Unlock Mystery of Bird Flocks

How can flocks of birds, schools of fish or herds of antelope suddenly change direction -- all the individuals adjusting their movement in concert, at seemingly the same time? British researchers now have some insights into this behavior, which has puzzled scientists for a long time. VOA's George Putic has more.

AppleAndroid

World Currencies

EUR
USD
0.7537
JPY
USD
103.79
GBP
USD
0.6032
CAD
USD
1.0957
INR
USD
60.522

Rates may not be current.