Haiti, Asia Pacific to top agenda for the IMF meeting

WASHINGTON, April 24, 2010 (AFP) - Rebuilding Haiti and economic developments in the Asia Pacific region top the agenda for the International Monetary Fund's spring meeting that starts here Saturday.

The gathering comes more than three months after the January 12 quake, which flattened large parts of Port-au-Prince and surrounding towns and villages, claiming more than 220,000 lives from more than two dozen nations.

An assessment compiled by the Haitian government with the help of 250 Haitian and international experts put the total damage from the 7.0-magnitude quake at a massive 7.9 billion dollars, or a massive 120 percent of Haiti's gross domestic product.

More than 70 percent of those losses were sustained by the private sector and 4.4 billion dollars worth of damage was to schools, hospitals, roads, bridges, buildings, ports and airports.

The document pointed out that the total amount of money needed for the country's reconstruction now stood at 11.5 billion dollars and broke down like this: 50 percent for the social sector, 17 percent for infrastructure including housing, and 15 percent for the environment and disaster risk management.

But the IMF forecast this past week that the global economy will grow at a faster-than-expected rate of 4.2 percent this year, heralding the prospect of a rapid, if patchy, recovery -- and new funds for international assistance.

The fund said the emerging markets of Brazil, China and India will drive the global rebound, as established economic powers in Europe and Japan continue to lag.

"The recovery has been stronger than expected thus far, as confidence has picked up among consumers and businesses as well as in financial markets," the IMF said in a biannual report.

China was forecast to grow 10 percent this year, India 8.8 percent and Brazil 5.5 percent.

That compares with forecasts of sclerotic growth of around one percent in much of Western Europe and contraction in Spain.

The Japanese economy is expected to grow 1.9 percent this year and the United States 3.1 percent -- almost half a percent point more than previously expected.

"The United States is off to a somewhat later but better start than Europe or Japan," the report said.

But the IMF warned that the US recovery remains constrained by high unemployment and slow bank lending to small and medium-sized companies.

The better-than-expected economic recovery was hailed Friday by finance ministers of the Group of 20 countries, who said it was time for plans to unwind measures to tackle the waning global crisis.

The ministers remained split however over support for a global bank tax, Canadian Finance Minister Jim Flaherty acknowledged after a meeting of counterparts from 20 leading developed and developing countries in Washington.

"The global recovery has progressed better than previously anticipated largely due to the G20's unprecedented and concerted policy effort," a statement released after the meeting said.

"We should all elaborate credible exit strategies from extraordinary macroeconomic and financial support measures that are tailored to individual country circumstances."

When asked at a subsequent press conference about issues on which ministers differed, Flaherty said: "There was not agreement on a global bank tax. Some countries are in favor of that, some countries quite clearly are not."

The G20 ministers asked the IMF, which hosted the meeting, to draft additional proposals for bank taxes to help stem excessive risk taking and pay for bank bail-outs that were needed to prevent a financial sector meltdown.

IMF experts are to consider "how the financial sector could make a fair and substantial contribution towards paying for any burdens associated with government interventions to repair the banking system," the statement said.

The IMF was set to propose two taxes, one to reimburse governments for the cost of bailing out banks hit by the crisis, and another to dissuade banks from taking excessive risks in the future.

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