Advanced nations 'can't control world economy'

2011-09-24 22:50

Washington - Advanced countries can no longer manage global economic stability by themselves, Brazil's Finance Minister Guido Mantega told the International Monetary Fund on Saturday.

"The current world situation is similar to that of 2008," Mantega told the IMF's steering committee in a statement on behalf of several Latin American nations.

Without a strong response from policymakers in the United States and the eurozone, he said, "the best scenario for these countries seems to be prolonged stagnation with high unemployment".

But this time, he said, "emerging market and developing countries are responsible for the larger share of world economy growth" and have a bigger role to play.

"A revival of global demand will depend to a large extent on these countries."

He criticised the loosening of monetary policies in advanced economies for flooding liquidity into the global economy - an issue which has troubled Brazil because of the sharp rise over the past year in its currency due to capital inflows.

"Persistently loose monetary policies" in the United States, Europe and Japan "have caused considerable headaches for emerging-market countries", he said.

- AFP