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07 February 2002

Treasury's O'Neill Says G-7 to Focus on Counterterrorism, Growth

(Development, financial crises among other priorities) (550)
By Andrzej Zwaniecki
Washington File Staff Writer
Washington -- The United States will work with its allies to block the
assets of terrorists simultaneously in all countries, Treasury
Secretary Paul O'Neill says.
Speaking to reporters February 7 on the eve of the G-7 ministerial
meeting in Ottawa, O'Neill said that while the United States and its
partners have made "a lot of progress" in fighting terrorist
financing, they still can do more. Orders to freeze terrorist assets
have been issued in 149 countries and jurisdictions, and over $104
million of terrorist money has been blocked since September 11, he
What G-7 and other countries need to do in the near future, O'Neill
said, is to develop key information-sharing principles and procedures.
The ministers and central bank chiefs from the Group of Seven
industrialized countries -- Canada, France, Germany, Italy, Japan, the
United Kingdom and the United States -- are meeting February 8-9 in
Ottawa, Canada.
O'Neill said that he would also emphasize to his colleagues the
importance of reinvigorating global economic growth. He said the
United States has put the worst of the economic slowdown behind it and
is likely to grow at an annual rate of 3 to 3.5 percent in the fourth
quarter of 2002. He added that the restoration of strong growth in the
United States and other developed economies will benefit both emerging
economies and the poorest countries.
O'Neill said that in Ottawa he also plans to emphasize the importance
of President Bush's grants proposal to improve the effectiveness of
development assistance.
The Bush administration has proposed moving the World Bank partially
away from loans as its only form of development assistance to the
poorest countries. Instead the administration wants the Bank to offer
50 percent of such assistance in the form of grants.
O'Neill said that it makes no sense to heap more debt on these
countries and further reduce their borrowing ability. Grants are more
appropriate than loans for educational, sanitation and other projects
that bring more societal than financial return, he said.
But European countries have objected to Bush's proposal, arguing that
grants are more likely to be squandered.
"There is still way to go in getting people to move beyond emotional
questions to examine facts together about what makes most sense,"
O'Neill said.
Nevertheless, he expressed hope that the G-7 countries can reach
agreement on this issue before the March Financing for Development
Conference in Monterrey, Mexico.
O'Neil said that in Ottawa he wants to continue discussion about
creating some sort of bankruptcy mechanisms to give countries in
serious financial distress a chance to restore their financial
standing. He said he is committed to working on a mechanism that is
"market-based, gives responsibility and ownership to debtors and
creditors, and minimizes any potential conflict on interest."
On a related issue, O'Neill said the United States has done everything
"we could think of" to help Argentina emerge from its current
financial crisis by supporting International Monetary Fund efforts and
offering advice and technical expertise.
What we did not do, he added, was advertise our efforts.
(The Washington File is a product of the Office of International
Information Programs, U.S. Department of State. Web site:

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