Upbeat messages belie failures in Washington

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Upbeat messages belie failures in Washington

Finance ministers and central bank governors gathered in Washington for the annual IMF/World Bank meetings last month at a time when the global economy showed little sign of sustained recovery.


The outlook is uncertain. If the property bubble bursts in the US - a second blow after the equity meltdown - consumers there, who have driven the weak recovery so far, will stop spending. Neither trade nor investment will take up the slack.


The fear of double-dip recession and deflation is growing. Equity markets continue to fall as corporations deliver weak profits and struggle with huge debts.


Institutional investors show little inclination to finance emerging markets. Brazil is on the brink. Markets are almost driving it towards default that might destroy emerging markets as an asset class.


Meanwhile war looks ever more likely - so add to this already worrying economic outlook the rising oil prices that would follow a US-led attack on Iraq.


There would seem to be plenty for policymakers to do in Washington to devise responses to such daunting challenges. But what did we get? We got dismally organized and truncated meetings in which delegates could barely manage to talk to each other because of the security clampdown.






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