Obama urges global co-operation to secure growth

Barack Obama arrives in Seoul. Photo: AP BBC Online

The global financial system and world economy are set to dominate the agenda at a two-day meeting of the G20 group of nations in South Korea.
But there are fears the summit in Seoul could descend into a row between the US and China about so-called "currency wars" and trade imbalances, BBC reports on Thursday.
Ahead of the meeting US President Barack Obama urged leaders to work together for global economic recovery.
He said the US would seek to create jobs and reduce global imbalances.
On a visit to a US base in Seoul before the main G20 meetings began, Obama took the opportunity to urge North Korea to engage with the international community.
"North Korea's continued pursuit of nuclear weapons will only lead to more isolation and less security," he said. "But there is another path available to North Korea."
Washington has blamed global economic imbalances in part on Beijing's alleged manipulation of its currency to help boost Chinese exports, which has led to Beijing amassing huge foreign reserves.
Others, however, say America's economic policies, specifically creating new money to pursue quantitative easing (QE), could also be a form of currency manipulation for its own ends.
Speaking to the BBC, the president of the World Bank, Robert Zoellick, said there were "definitely tensions" over currency.
The G20 group comprises the world's 19 leading national economies, plus the European Union.
It was formed in 1999, and held its first meeting that year.
Until 2008 the G20 was overshadowed by the smaller G8 grouping of France, Germany, Italy, Japan, the UK, the US, Canada and Russia.
However, this has changed since the global financial crisis of 2008, and the G20 has effectively now replaced the G8 as the main global economic forum.
The major growth in the economies of G20 members China, India and Brazil has also contributed to the rising importance of the grouping.
The G20 currently meets twice a year, but this is set to reduce to one meeting from 2011.
"One has to be wary of the tensions because you don't want them to slip into protectionism," he said.
But he said that while the US raising the issue over China was "useful", he added China's next five-year plan for its economic development would focus on increasing domestic demand, adding this would be important in shifting China's growth.
Critics
At a G20 press conference, Brazil's Finance Minister Guido Mantega criticised the US central bank's latest QE programme.
"The trouble with putting an extra $600bn into the US economy is that this money will not go into production, will not create jobs and neither will it boost domestic consumption.
"With more money in the market, investors will take advantage of higher interest rates in other places, put the money into these countries' stock exchanges or invest in commodities, raising the prices and causing inflation in our countries," Mantega said.
Accused of forcing the dollar down to trade its way back to prosperity, Obama is expected to hold one-on-one talks with two of the strongest critics of his administration's economic direction - Chinese President Hu Jintao and German Chancellor Angela Merkel.
President Obama has said that the US alone could not restore growth but accepted the US must change, adding: "When all nations do their part... we all benefit from higher growth."