G-15 ministers to examine Asia crisis and world trade

G-15 ministers to examine Asia crisis and world trade

CAIRO (Reuters): Foreign ministers from the G-15 group of developing countries met in Cairo yesterday to pick through the lessons of the Asian financial crisis and try to rally their combined forces in world trade talks.

The ministers were meeting ahead of a three-day summit opening on Monday, which Indonesia's President Soeharto will attend in spite of riots and economic turmoil at home.

"Rapid liberalization may have negative impacts which we should bear in mind," Egyptian Foreign Minister Amr Moussa said in his opening address. "Economic concerns should not make us close our eyes to the social dimension of development."

Soeharto left Jakarta for the summit earlier yesterday, leaving a country racked by economic crisis and escalating protests against his 32-year rule.

Riots exploded last week in the North Sumatra city of Medan after a sharp hike in fuel prices, part of Indonesia's efforts to fulfill the conditions of a US$40 billion bailout package led by the International Monetary Fund.

Growing numbers of workers, state employees, doctors and nurses were reported to be adding their voices to student rioters and church leaders demanding political reform.

Moussa said the G-15 meeting was being held at a "delicate moment", against the background of the Asian crisis and talks in Geneva next week on future plans for the World Trade Organization (WTO).

Financial problems in individual countries had to be dealt with in an international framework dominated by economic liberalization and an increasing trend towards regional groupings.

"We are all living in the same world," Moussa said. "The benefit and the harm (of the world economic situation) affect us all in the end."

Many other members of the G-15, which groups Algeria, Argentina, Brazil, Chile, Egypt, India, Indonesia, Jamaica, Malaysia, Mexico, Nigeria, Peru, Senegal, Venezuela and Zimbabwe, have suffered from the knock-on effects of the Asian crisis and are grappling with their own economic woes.

Malaysia has been badly hit by a sharp fall in its stock market and ringgit currency since the regional turmoil erupted last July.

Low world crude prices are squeezing oil producers such as Mexico, Nigeria, Venezuela, Egypt and Algeria, which recently said its 1998 government revenue would be cut by nearly $1.2 billion as a result.

Zimbabwe is trying to shake off the effects of currency turmoil and resurgent inflation which swept the southern African country last year.

Argentina has been struggling to rein in a widening trade deficit which has endangered its loan program with the IMF.

The Brazilian government's attempts to curb a ballooning budget deficit suffered a blow on Wednesday when the lower house of Congress rejected a key pension reform bill.

Malaysian news agency Bernama reported on Friday that the Malaysian delegation would lobby for G-15 backing against any WTO move to start a fresh round of multilateral trade negotiations.

Moussa said the social impact of reforms must be borne in mind in the coming WTO talks, and the G-15 should cooperate to work for a fair outcome for weaker countries.

"Liberalization is not an end in itself," he said. "We believe in it and move towards it to push forward the development process. "Liberalization must be balanced with the requirements of development in the context of achieving the integration of the developing countries in the world trade order," Moussa said.