September 27, 2002
Finance chiefs from the world's richest nations were set to gather on Friday under the shadow of war fears and spiraling oil prices to discuss how to keep a shaky global recovery on track.
The Group of Seven finance ministers, hosted by U.S. Treasury Secretary Paul O'Neill, were set to meet in the mid-afternoon at a government guest house directly across from the White House under heavy security. O'Neill has said he would tell the group the U.S. economy remained on track for growth at an annual rate of 3 to 3-1/2 percent by year-end, and that he wanted to know from the rest ``what they intend to do to spur growth in their economies.''
The G7 is comprised of Britain, Canada, France, Germany, Italy, Japan and the United States. An eighth country, Russia, will share a substantial portion of the meeting, which occurs on the fringes of annual sessions of the International Monetary Fund and World Bank.
BLACK-FLAG PROTESTERS STRIKE
An early morning anti-capitalist protest march was thwarted when police penned about 300 demonstrators within a city block, blocking both entrances with lines of motorcycles. Police swung batons to keep the restive crowd back, handcuffed other protesters and moved them onto buses, eyewitnesses said.
Sirens split the morning as hundreds of police moved into position and small protests broke out in various parts of downtown. "These are people trying to protest against a system that represses people around the world, and their response is repression on the streets here too,'" said protester Flora Little, 38.
The area was crowded with police in riot gear on foot, motorcycles, bicycles and horseback as demonstrators beat drums and chanted anti-capitalist slogans. The crowd, many of whom waved black flags and wore bandannas to cover their faces, was relatively calm but some demonstrators broke windows at a bank branch. A couple of smoke bombs exploded, although it was not clear who threw them.
GLOBAL PROSPECTS HAVE DIMMED
On the eve of the finance ministers' session, IMF Managing Director Horst Koehler said global prospects evidently have dimmed since spring, ``but it would not be productive now to dwell on undue pessimism or doom and gloom.'' Instead, he said, ``There are still good reasons to expect the recovery to continue in the period ahead. What we need now is vigilance and measures to rebuild confidence,'' he said.
Concern about a possible U.S. war against Iraq and a sharp spike upward in world oil prices to more than $30 a barrel have aggravated worries about an already-slow pace of growth in Europe and Japan's virtual stagnation for a decade.
O'Neill said he wanted to hear more about Japan's latest proposals, for the Bank of Japan to buy stocks directly from troubled commercial banks that are burdened by massive bad loans. The U.S. treasury chief expressed some skepticism, saying he wanted Japanese Finance Minister Masajuro Shiokawa to explain what the impact of such transactions would have ``if all of your dreams come true.''
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