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Washington Finance Summit Seeks Ways to Combat Economic Slowdown

Amid a dramatic global economic slowdown, leaders of 20 developing and industrialized economies are holding an emergency summit in Washington Saturday, November 15. VOA economics correspondent Barry Wood reports on what may result from a meeting whose formal discussions will last only five hours.

When world leaders convene in Washington, they will focus on a slowdown that has affected virtually every country.

In just months, $25 trillion have been erased from global stock markets. Millions of jobs have been lost, and consumers are holding on to whatever cash they have, sparking further declines.

Former US Treasury official Ted Truman helped plan financial meetings of industrialized countries. He believes this broader gathering --not of seven but of 20 -- is significant.

"I hope it will focus on the big problem we face, which is global recession," he said.

To maintain consumer purchasing power and avoid calamity, leaders must commit to coordinated measures, says Wing Thye Woo of Washington's Brookings Institution.

"Boosting government expenditure, lowering interest rates, and countries should not engage in export promotion policies at this point," he explained.

Some countries, especially China, have already announced emergency spending programs. Experts say China is signaling a desire to play a bigger role in the global economy.

"They are now important players and will become even more important in the future," Woo said. "We need the Chinese to continue growing fast."

The need for better regulation of financial institutions will also be discussed, as will the need for developing economies -- like China and India -- to have a bigger say in the International Monetary Fund.

Ted Truman says the financial summit could mark the beginning of regular consultations between developed and developing countries.

"I think the most significant thing about this meeting is that it probably marks the beginning of the end of the G-7 as a summit organization," he said.

Annual G-7 summits of the United States, Canada, Japan and western European nations have taken place for over 30 years. The broader group accounts for 75 percent of global output.