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Despite a Backdrop of Brexit and Anti-Globalization, World Leaders Vow to Boost Growth

Despite a Backdrop of Brexit and Anti-Globalization, World Leaders Vow to Boost Growth
As the world finance leaders confront stubbornly slow growth and a rising backlash against globalization, they have pledged Saturday to use more resources to try to bolster economic gains.
The world has "benefited tremendously from globalization" but that protectionism is a threat, said the policy committee for the 189-nation International Monetary Fund. The he annual meetings of the IMF and its sister lending agency, the World Bank was dominated by increasing anger over globalization.
In the U.S. presidential campaign of Republican Donald Trump and in Britain's vote in June to leave the European Union, this unhappiness for globalization is evident. Due to unfair trade practices of countries such as China and Mexico, millions of Americans have lost jobs or seen wages stagnate, Trump has said. If those practices are not halted, he has vowed to imposing penalty tariffs.
There were further troubles Friday when the British pound plunged by 6 percent against the dollar before recovering even as the British vote sent shockwaves through financial markets this summer. If the British exit proves to be messy and prolonged, there are worries among investor about whether there will be more turbulence.
"Growth has been too low for too long, benefiting too few," and that's what officials need to address, IMF Managing Director Christine Lagarde said.
To ensure that everyone has the opportunity to benefit from globalization and technological change" and "to address the concerns of those who have been left behind, the IMF officials committed to designing and putting in place policies, the Fund said in their statement.
However what actions countries would be willing to take have not been spelled out by the IMF. How governments will strengthen social safety nets and will find the resources to expand education and job training programs remains unclear in an era of budgetary constraints.
Mario Draghi, the head of the European Central Bank felt the short-term consequences "have not been as dramatic as some were predicting, both in financial markets and also the real economy" even with the turbulence linked to Britain's exit vote.
But as Britain and the EU negotiate next year over the terms of separation, a lot will depend on how prolonged the post-Brexit uncertainty lasts, Draghi said. "It's a matter of this political uncertainty that clouds the outlook for growth," Draghi said.
The IMF was urged to act "more boldly and forcefully" to push member countries to pursue all economic policy options to spur growth by U.S. Treasury Secretary Jacob Lew.
Appeals to increasing spending and stimulating global demand have been made to countries such as Germany, which are running budget or trade surpluses by the Obama administration.
"We must not close ourselves off to the world, but rather redouble our commitment to ensuring shared growth," Lew said.
Millions of people in poor nations have been lifted out of poverty by the decades-long effort to tear down trade barriers, various finance officials said. But to protect workers who have lost jobs due to increased global competition, not enough has been done, they said.
Free trade is crucial to driving global growth, said Japanese Finance Minister Taro Aso.
"If we really want jobs and higher income, if we care about poverty reduction and economic fairness ... if we care about growth, then we need to be serious about fostering global trade and about making sure that global trade works for all," Lagarde said.

Christopher J. Mitchell

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