U.S. Treasury Secretary Paul O'Neill says the U.S. economy is recovering well from last year's recession and that growth should reach 3.5 percent by year's end. Mr. O'Neill spoke Tuesday to a Washington meeting of business economists.
Mr. O'Neill says there will be steady economic improvement as the year goes on. He says by early last September the economy had already begun to rebound from the shallow recession that took hold in March. However, he continued, the terrorist attacks of September 11 threw the recovery off track as normal business activity was curtailed for several weeks.
But, says the former corporate executive, the economy has been coming back nicely over the past few months. Growth had already recovered to a 1.4 percent rate in the fourth quarter. And Mr. O'Neill expects a much better number for the current three-month period. For 2001 as a whole the U.S, economy grew by only 1.2 percent, its weakest performance in ten years. The Treasury secretary says Europe is also beginning to recover. Although he believes Europe's potential growth path is probably no more than 2 or 2.5 percent annually.
Mr. O'Neill is cautiously optimistic about the results of last week's developing country aid conference in Monterey, Mexico. He says President Bush is determined to make a difference and demonstrate that targeted aid programs can succeed. Mr. O'Neill said, regrettably, there is little to show from 40 years of well intended aid programs. Poverty has worsened instead of diminished and most poor countries have lower incomes today than 40 years ago. He is hopeful that accountability where successes and failures are highlighted will make a difference.
For aid to be effective, says Mr. O'Neill, recipient nations must have institutions that assure the rule of law and make contracts enforceable. In addition there must be a commitment at the highest level of governmnent to eliminate corruption.
Concerning the Enron scandal the huge bankruptcy of a Texas energy trader that allegedly lied about its financial health Mr. O'Neill said corporate leaders must be held accountable.