Monday, September 5, 2011

'World economy in a new danger zone'

World Bank President Robert Zoellick

Source: Press TV

The World Bank has warned that record-high food prices and the global economy have reached unsafe levels, pushing the world's most vulnerable people at risk.

"The world economy is entering a new danger zone this autumn," AFP quoted World Bank President Robert Zoellick as saying at a conference in Beijing on the future of China on Saturday.

The World Bank chief also called on the United States to “address its issues of debt, spending and tax reform to boost private sector growth and a stalled trade policy."

Zoellick went on to urge China to accelerate its structural reforms which cater more towards its export-driven economy, and is less reliant on its domestic consumption.

"China's structural challenges occur in a current international context of slowing growth and weakening confidence," Zoellick warned.

He added that China would face further challenges in the years ahead.

"In the next 15 to 20 years, China is well-positioned to join the ranks of the world's high income countries," the head of the World Bank stated, warning "That's a transition that only a handful of countries have made - and, sadly, many have failed".

Zoellick said in August that investors had lost confidence in the economic leadership of several countries, led by America's bitter Congress debate to raise its debt ceiling and avoid default.

The United States is almost 15,000 billion dollars in debt, and as the most indebted country of the world cannot pay off its debts.

The European Union has meanwhile spent much of the past 18 months trying to battle its own debt crisis and has so far provided huge funds to Greece, Ireland, and Portugal with hefty bailout packages.

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