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February 10, 2009

World Bank Official Calls for Coordinated Global Stimulus
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http://enews.voanews.com/t?ctl=22314EF:A6F02AD83191E16003BD866B7478F69F30EB2FA2E66CBB22&
 
Chief economist Justin Yifu Lin repeats his call for coordinated global
stimulus to get global economy out of deep recession 
World Bank's chief economist, Justin Yifu Lin, 28 Jan 2009The World
Bank's chief economist, Justin Yifu Lin, on Monday repeated his call for
coordinated global stimulus to get the global economy out of deep
recession. Lin told an audience at Washington's Peterson Institute for
International Economics that two major issues much be addressed to
prevent the global downturn from becoming even more serious."One, is
whether we can overcome the threat of [trade] protectionism, or not,"
said Lin. "And second, is whether we have the wisdom to come up with
some kind of decisive, large enough, coordinated fiscal stimulus."Lin
expressed concern that the commitments to avoid protectionism made by
the leaders of 20 high income and developing countries last November
might be eroding. A follow-up summit to the November Group of 20 meeting
is scheduled for April in London. Lin is the first World Bank chief
economist to come from a developing country. Prior to assuming his
position in June, he headed a research agency at China's Beijing
University. He earned an advanced degree in economics from the
University of Chicago. The World Bank official wants 0.7 percent of the
value of each country's economic stimulus package to be committed as
assistance to the world's poorest countries. Lin said these countries
need infrastructure projects that can promote economic growth."It's
because high income countries don't have so many opportunities of those
kinds of [infrastructure] investments," he said. "You make those
investments in high-income countries, and the case of Japan [in the
1990s] is going to be repeated."Lin said Japan found that its program in
the 1990s for combating a weak economy and deflation through government
spending was stymied by consumers who cut back even further on spending.
Lin did not say whether he thought the same might occur in the United
States, which is finalizing a program of some $800 billion in tax cuts
and emergency government spending. 


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