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World officials to confront economic woes
Updated: 2005-04-16 15:01

The Bush administration, already concerned about the impact soaring oil prices will have on the economy, now has to be worried as well about a plunging stock market.

Oil and jittery financial markets were certain to be top discussion topics on Saturday as Treasury Secretary John Snow and Federal Reserve Chairman Alan Greenspan serve as hosts for a meeting of finance officials from the world's seven richest industrial countries.

France's Finance Minister Thierry Breton, right, and Treasury Secretary John Snow, left, shake hands during their bilateral meeting at the Treasury Department, Friday, April 15, 2005 in Washington. [AP]

On Friday, Wall Street suffered its worst single day loss in nearly two years with the Dow Jones industrial average plunging 191.24 points, its third straight triple-digit decline — something that hasn't happened since January 2003.

The sell-off was blamed on increasing worries that the U.S. economy — the locomotive for the global economy — could be entering a "soft patch" that could be worse than last year's spring and summer slowdown. Those also occurred after gasoline and other energy prices skyrocketed.

President Bush has been prodding Congress to pass an energy bill that would allow exploration of the Arctic National Wildlife Refuge to provide greater supplies in the United States. Other G-7 nations are expected to discuss their efforts to boost conservation.

In addition to the threat that surging oil prices posed to the global economy, the G-7 officials were also expected to talk about threats to global growth posed by America's huge trade deficit and the inability of Japan and many countries in Europe to boost domestic growth.

Another prime debating topic will be competing plans being put forward by the United States, Britain and France to reduce the debt burden held by the world's poorest countries. Officials hope to make progress in resolving differences on this issue but have said it is likely that an agreement will not be reached until early July in Scotland, where Bush and other leaders of the seven wealthy countries along with Russia will hold their annual economic summit.

The G-7 countries are the United States, Japan, Germany, France, Britain, Italy and Canada.

Their talks Saturday are in advance of weekend meetings of the 184-nation International Monetary Fund and its sister lending institution, the World Bank.

As usual, all of the talks were being held under tight security. Protesters for the spring meetings were expected to be much smaller in numbers than at previous gatherings.

A small band of protesters on Friday unveiled a huge clock in a park across the street from the World Bank in an effort to demonstrate the urgency of dealing with the debt issue. Officials from Oxfam International and other poverty relief agencies said that a child dies in a poor country every three seconds because of poverty and disease.

Top finance officials of China, who had been invited to the last two G-7 meetings, sent notice they did not plan to attend. That will not stop the G-7 countries from discussing the need for China to stop linking its currency, the yuan, to the U.S. dollar.

The annual spring meetings will be the last for World Bank President James Wolfensohn, who is stepping down after 10 years. He agreed this week to take over the job of helping coordinate Israel's planned withdrawal from the Gaza Strip and reconstruction of the area as it is turned over to the Palestinians.

He will be succeeded at the World Bank by Deputy Defense Secretary Paul Wolfowitz, a leading architect of the administration's Iraq war strategy. Wolfowitz will take over as head of the world's largest supplier of development aid on June 1.

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