[OPE] Brazilian finance minister criticizes economic policy of rich countries

From: Jurriaan Bendien <jurriaanbendien@online.nl>
Date: Sun Apr 17 2011 - 09:19:14 EDT

Brazilian Criticizes Wealthy Nations' Policies
NYT April 16, 2011

WASHINGTON - Brazil's finance minister said Saturday that developed nations
like the United States were seeking to solve their own economic problems at
the expense of the developing world.

The minister, Guido Mantega, said wealthy countries were attempting "to
export their way out of difficult economic situations" by printing money and
keeping interest rates low. Those policies are driving up the prices of food
and oil, causing particular pain for the world's poorest people, Mr. Mantega
told the policy-making committee of the International Monetary Fund.
His strong remarks highlight the challenges the United States and Europe
face as they try to change their economic relationship with the developing
world. In place of unsustainable borrowing to fuel consumption of imported
goods, they would like to sell more goods and services to those countries.
The problem is that developing nations, losing business from their best
customers, hope to replace sales by increasing domestic consumption -
selling to the same customers developed nations are trying to reach.

It is a dispute that plays out largely in terms of exchange, with both sides
charging that their rivals are boosting exports by artificially suppressing
the value of their currencies.

The two sides spoke past each other over the last week, during the annual
meetings of the major forums for international economic coordination - the
monetary fund, the World Bank and the Group of 20.

The United States says that higher prices are not a necessary consequence of
American policies, but instead have resulted from the efforts of developing
countries to hold down the value of their own currencies in the face of the
capital inflows from developed countries.

The treasury secretary, Timothy F. Geithner, said Saturday that developing
nations should allow the value of their currencies to be determined by
open-market trading. The United States believes that the exchange rates set
by the market will contribute to a more sustainable allocation of economic
activity among nations, and increased international growth.

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