Resisting a World Recession
G-7 meets Monday to stem financial unease. Experts say coordinated action is needed.
With financial storms lapping at the gunwales of their economic ships, the leaders of the industrial world are manning the pumps.
Their goal is to dump out some of the turbulent and fearful waters threatening to sink their economies into recession.
"The current crisis now has systemic peril written all over it," maintains Stephen Roach, chief economist of Morgan Stanley, a New York investment bank. "And the risk is that the world's policymakers are not up to the task."
Some efforts, though, are being made to calm the riled financial sea. The Bank of Japan said Wednesday it would ease a key rock-bottom interest rate even lower, to 0.25 percent, to boost its ailing economy. The move, its first monetary policy change in three years, is aimed at expanding the nation's money supply and helping its troubled banks.
On Monday, the Group of Seven most-industrialized nations (G-7) meet in London to consider the governmental and economic crisis in Russia - the newest and most dangerous emergency in the world.
The conversation undoubtedly will stray into other topics, such as the troubles in East Asia.
In Moscow, the Duma, Russia's lower house of parliament, is expected to approve today a new prime minister, Foreign Minister Yevgeny Primakov, to serve under President Boris Yeltsin.
Mr. Yeltsin called German Chancellor Helmut Kohl to assure him that Mr. Primakov would stick to market reforms.
IN Russia, the ruble recovered some of its lost value. Nonetheless, there are uncertainties about what the G-7 will be able to do to help Russia. The G-7 has decided against giving any further money to Russia at this time.
Princeton University economist Peter Kenen was at a loss. "Forty years as a practicing economist has given me no solution," he says. "What do you know about the efficacy of prayer?"
Nonetheless, economists do have some suggestions for action.