Remarks by Treasury Secretary Tim Geithner at the G-20 Meeting of Finance Ministers and Central Bank Governors
2/26/2012
As Prepared for Delivery
MEXICO CITY - The risks to the global economy have diminished since the G-20 last met in Cannes, but we still face significant economic challenges. The U.S. economy is gradually getting stronger. Europe has acted to significantly reduce the risk of a catastrophic financial crisis. And even with weakness in European growth, we are seeing encouraging signs of resilience in many emerging economies.
The discussion of ministers and governors this weekend focused primarily on three key issues:
Europe and the global economic outlook;
Iran and oil markets; and
Financial reform.
Our colleagues in Europe gave us an update on their plans going forward to address the European financial crisis. We are encouraged by the progress that they have made over the last few months. A durable solution requires both a sustained period of economic reform and a substantial financial firewall to support those reforms. European policy makers recognize the magnitude of the challenges ahead and will be reviewing additional steps in the weeks ahead.
The G-20 is committed to making sure that the IMF has the resources it needs to help its members deal with the risks from Europe. There is broad agreement that the IMF cannot substitute for the absence of a stronger European firewall and that the IMF cannot move forward without more clarity on Europe’s own plans.
Beyond Europe, the steps many emerging economies took last summer and fall have helped support global growth. While the right mix of policies will differ across countries, policy generally should be directed at reinforcing economic expansion.
Reorienting the economies of countries with large external surpluses toward domestic demand and greater exchange rate flexibility remain critical to a sustainable global recovery. Since China resumed exchange-rate reform in June of 2010, the renminbi has appreciated by around 12 percent against the dollar after taking into account China’s higher level of inflation. That’s welcome progress, and we believe it is in China’s interest and in the interest of the global economy for their exchange rate to continue to appreciate.
Other emerging economies in Asia with external surpluses also need to increase their exchange rate flexibility and adopt policies that support domestic sources of growth.
On Iran and oil, I had a series of encouraging conversations with countries planning to significantly reduce imports from Iran. We are seeing very effective cooperation from our partners on the financial front to help ensure that their banks cease transactions with the Central Bank of Iran and that Iranian banks find it harder than ever to facilitate Iran’s illicit nuclear activities or to help Iran evade sanctions.
We are working together to help ensure there are alternative sources of oil from major producers to help offset reductions in exports from Iran, and here too, I am encouraged.
We reviewed the global effort to strengthen safeguards against future risks in the financial system. We have made important progress on tougher capital standards. We’re seeing broad convergence on strategies for oversight and transparency in derivatives markets. There is very extensive consultation between the Federal Reserve, the FDIC, and their counterparts in other countries about how to manage crises and deal with the possible failure of large financial institutions.
This is an important year for financial reform in the United States, where we expect to have the major foundations of our reform in place by the end of 2012. Of course, it’s very important to us that we have a level playing field internationally. As we and others go forward in implementing our financial reforms we will be mindful of cross boarder impacts and committed to managing them carefully.
Let me conclude with a few points on the U.S. economy.
The U.S. economy is gradually getting stronger. Despite substantial headwinds, our economy has grown at an average annual rate of 2 1/2 percent over the last two and a half years. And we have seen encouraging signs of strength in recent indicators.
This recovery has been supported by a shift toward a more balanced pattern of growth in the United States, with stronger growth in private investment and exports. Productivity is up. Private savings is substantially higher than it was before the crisis, and our fiscal deficits are now falling. The U.S. current account deficit is now around 3 percent of GDP – down from a peak of around 6 percent before the crisis. The financial sector is much stronger.
Even with this progress, however, the damage inflicted by the crisis will still take some time to repair. Unemployment, while falling, is still very high. And the housing market remains weak.
Our focus now is on reforms that will help create a stronger foundation for future growth and broaden economic opportunity. Our strategy is to combine investments and reforms in education, innovation, and infrastructure with tax reforms and savings to restore long-term fiscal sustainability.
Thank you to our gracious hosts, President Calderon, Minister Meade and Governor Carstens and their teams, for hosting us this weekend.
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Senin, 27 Februari 2012
Selasa, 09 November 2010
Geithner Op-Ed: ‘How India-US Trade Can Scale Greater Heights'
Press Release
U.S. Treasury
WASHINGTON – In an op-ed piece to be published in the November 8, 2010 edition of the Hindustan Times, Treasury Secretary Tim Geithner discusses the growing economic partnership between the United States and India and how trade and investment between our two countries present dramatic and expanding opportunities to build new markets and create high-quality jobs in both nations. Secretary Geithner also reviews the steps that the United States and India are taking to build a firm foundation of stronger and more sustainable global growth.
How India-US Trade Can Scale Greater Heights
By Tim Geithner
This week President Barack Obama is visiting India for the first time, one year after Prime Minister Manmohan Singh's official state visit to the United States in November 2009. President Obama's visit will be an important milestone in strengthening the U.S.-India strategic partnership.
The leading edge of the economic partnership between our countries is the deepening ties between American and Indian business -- ties bolstered by the announcement this weekend of significant new US-India trade transactions.
Across an array of sectors, from U.S. aircraft connecting Indian cities to Indian zinc outfitting American industry, trade and investment between the United States and India is flourishing. Indian exports to the United States grew by almost 40 percent from 2004 to 2009, and American exports to India grew by nearly 170 percent over that same period. After slowing down during the height of the global crisis, bilateral trade has rebounded strongly, growing by more than 30 percent in the first half of 2010.
These rates of growth underscore that trade and investment between our two countries are presenting dramatic and growing opportunities for our business leaders and entrepreneurs to build new markets and create high-quality jobs.
The celebrated expansion of India's mobile phone market is a prime example. With close to 600 million subscribers today, or more than 70 percent of the population 15 years and older, mobile phone access is transforming traditional industries like agriculture and banking by bringing information and services to even the remotest areas. From inventing the optical fiber used to build the infrastructure for mobile phone service, to designing the applications that make mobile banking possible, the ingenuity of both American and Indian companies has driven a telecommunications revolution in rural India--and unleashed new and vibrant economic activity in its wake.
U.S.-India commercial partnerships are also combining to generate solutions through innovation and cutting-edge technology to some of the globe's most vexing challenges--from the delivery of clean drinking water and distributed solar power, to the development of new vaccines and clean transportation technologies.
To take just a couple of examples: an American solar panel manufacturer is partnering with an Indian company to deliver clean distributed power for cell towers in India; in the coming years, this same partnership could provide rural power solutions to other new global markets. And another American research and development company is partnering with an Indian company to find new markets for its optical biosensor technology to develop new therapies for various diseases including "neglected" ones such as leishmaniasis, a parasite that afflicts tens of thousands each year in India and is a growing threat to American service members in Afghanistan and Iraq.
Such opportunities for new markets and growth can only be created and sustained by vibrant, yet stable financial sectors. Both nations are rising to the challenge. While the U.S. implements historic reform to ensure the safety and soundness of its financial system, India is making changes necessary to boost investment in its financial sector, such as expanding access to financial services and developing its corporate debt market.
Even as the promise of U.S.-India ties is starting to be realized in the private sector, our two nations must work together to ensure that these opportunities are built on a firm foundation of stronger and more sustainable global growth. This is the central challenge for policymakers in the United States, India, and the rest of the G-20.
The most significant risk to the global economy today is that the world's largest economies underachieve on growth. Economic recoveries that follow financial crises are typically slower than those that follow other types of recessions, due to the headwinds to growth generated by necessary adjustments in asset prices and the reduction of financial leverage. We must respond by continuing to provide well-targeted support to strengthen growth in the near term even as we put in place plans for greater fiscal sustainability over the longer term.
For growth to be sustainable, we must also work together to change its overall global pattern. Before the crisis, too many nations oriented their economies toward producing for export rather than consuming at home, counting on a few deficit nations to import many more goods and services than they sold abroad. The result was a global economy afflicted by an unstable array of external imbalances, both deficits and surpluses.
Together, we must build a framework for growth that prevents the re-emergence of such imbalances, maintaining external accounts at sustainable levels over time. Doing so will require contributions from every corner of the global economy. Surplus countries will have to boost internal demand through structural reforms, while deficit nations will need to increase their savings. Key emerging economies will also need to move toward market-determined exchange rates in line with economic fundamentals.
India is meeting this challenge, helping to demonstrate the dynamism that can accompany domestic demand-led growth combined with significant exchange-rate flexibility. India is succeeding in fostering greater domestic demand in part by directing economic policies and incentives toward the bottom of the income pyramid. In the coming years, India will also continue to make substantial investments in public infrastructure that will help to drive future growth. In short, India's focus on "inclusive growth," through targeted fiscal spending and investment, is contributing to greater support of Indian households and higher employment.
The United States is doing its part as well. The U.S. economy has been growing for 18 months, with a recovery led by private investment. We are repairing our financial system. Households are saving more, and we will reduce our fiscal deficit as the recovery strengthens. Going forward, we are committed to building on our long-standing openness to investment and trade, while working to ensure through reforms in education and infrastructure that our nation remains fertile ground for invention and innovation.
The U.S.- India partnership is realizing more of its great potential with each passing year. Through continued trade and investment between our businesses and entrepreneurs, and through improved collaboration and coordination between our governments, we will address many common challenges and achieve shared goals, ultimately leading to improved economic well-being for the citizens of both countries.
###
U.S. Treasury
WASHINGTON – In an op-ed piece to be published in the November 8, 2010 edition of the Hindustan Times, Treasury Secretary Tim Geithner discusses the growing economic partnership between the United States and India and how trade and investment between our two countries present dramatic and expanding opportunities to build new markets and create high-quality jobs in both nations. Secretary Geithner also reviews the steps that the United States and India are taking to build a firm foundation of stronger and more sustainable global growth.
How India-US Trade Can Scale Greater Heights
By Tim Geithner
This week President Barack Obama is visiting India for the first time, one year after Prime Minister Manmohan Singh's official state visit to the United States in November 2009. President Obama's visit will be an important milestone in strengthening the U.S.-India strategic partnership.
The leading edge of the economic partnership between our countries is the deepening ties between American and Indian business -- ties bolstered by the announcement this weekend of significant new US-India trade transactions.
Across an array of sectors, from U.S. aircraft connecting Indian cities to Indian zinc outfitting American industry, trade and investment between the United States and India is flourishing. Indian exports to the United States grew by almost 40 percent from 2004 to 2009, and American exports to India grew by nearly 170 percent over that same period. After slowing down during the height of the global crisis, bilateral trade has rebounded strongly, growing by more than 30 percent in the first half of 2010.
These rates of growth underscore that trade and investment between our two countries are presenting dramatic and growing opportunities for our business leaders and entrepreneurs to build new markets and create high-quality jobs.
The celebrated expansion of India's mobile phone market is a prime example. With close to 600 million subscribers today, or more than 70 percent of the population 15 years and older, mobile phone access is transforming traditional industries like agriculture and banking by bringing information and services to even the remotest areas. From inventing the optical fiber used to build the infrastructure for mobile phone service, to designing the applications that make mobile banking possible, the ingenuity of both American and Indian companies has driven a telecommunications revolution in rural India--and unleashed new and vibrant economic activity in its wake.
U.S.-India commercial partnerships are also combining to generate solutions through innovation and cutting-edge technology to some of the globe's most vexing challenges--from the delivery of clean drinking water and distributed solar power, to the development of new vaccines and clean transportation technologies.
To take just a couple of examples: an American solar panel manufacturer is partnering with an Indian company to deliver clean distributed power for cell towers in India; in the coming years, this same partnership could provide rural power solutions to other new global markets. And another American research and development company is partnering with an Indian company to find new markets for its optical biosensor technology to develop new therapies for various diseases including "neglected" ones such as leishmaniasis, a parasite that afflicts tens of thousands each year in India and is a growing threat to American service members in Afghanistan and Iraq.
Such opportunities for new markets and growth can only be created and sustained by vibrant, yet stable financial sectors. Both nations are rising to the challenge. While the U.S. implements historic reform to ensure the safety and soundness of its financial system, India is making changes necessary to boost investment in its financial sector, such as expanding access to financial services and developing its corporate debt market.
Even as the promise of U.S.-India ties is starting to be realized in the private sector, our two nations must work together to ensure that these opportunities are built on a firm foundation of stronger and more sustainable global growth. This is the central challenge for policymakers in the United States, India, and the rest of the G-20.
The most significant risk to the global economy today is that the world's largest economies underachieve on growth. Economic recoveries that follow financial crises are typically slower than those that follow other types of recessions, due to the headwinds to growth generated by necessary adjustments in asset prices and the reduction of financial leverage. We must respond by continuing to provide well-targeted support to strengthen growth in the near term even as we put in place plans for greater fiscal sustainability over the longer term.
For growth to be sustainable, we must also work together to change its overall global pattern. Before the crisis, too many nations oriented their economies toward producing for export rather than consuming at home, counting on a few deficit nations to import many more goods and services than they sold abroad. The result was a global economy afflicted by an unstable array of external imbalances, both deficits and surpluses.
Together, we must build a framework for growth that prevents the re-emergence of such imbalances, maintaining external accounts at sustainable levels over time. Doing so will require contributions from every corner of the global economy. Surplus countries will have to boost internal demand through structural reforms, while deficit nations will need to increase their savings. Key emerging economies will also need to move toward market-determined exchange rates in line with economic fundamentals.
India is meeting this challenge, helping to demonstrate the dynamism that can accompany domestic demand-led growth combined with significant exchange-rate flexibility. India is succeeding in fostering greater domestic demand in part by directing economic policies and incentives toward the bottom of the income pyramid. In the coming years, India will also continue to make substantial investments in public infrastructure that will help to drive future growth. In short, India's focus on "inclusive growth," through targeted fiscal spending and investment, is contributing to greater support of Indian households and higher employment.
The United States is doing its part as well. The U.S. economy has been growing for 18 months, with a recovery led by private investment. We are repairing our financial system. Households are saving more, and we will reduce our fiscal deficit as the recovery strengthens. Going forward, we are committed to building on our long-standing openness to investment and trade, while working to ensure through reforms in education and infrastructure that our nation remains fertile ground for invention and innovation.
The U.S.- India partnership is realizing more of its great potential with each passing year. Through continued trade and investment between our businesses and entrepreneurs, and through improved collaboration and coordination between our governments, we will address many common challenges and achieve shared goals, ultimately leading to improved economic well-being for the citizens of both countries.
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