Obama Says Economic Disaster Averted

By CHARLES BABINGTON

posted: 142 DAYS 1 HOUR AGO

Text SizeAAA

L'AQUILA, Italy (July 10) - Lasting worldwide recovery "is still a ways off," President Barack Obama declared Friday, but he also said at the conclusion of a global summit that a disastrous economic collapse apparently has been averted.

Obama said world leaders had taken significant measures to address economic, environmental and global security issues.

"Reckless actions by a few have fueled a recession that spans the globe," Obama said of the meltdown that began in the United States with a tumble in housing prices and drastic slowing of business lending. The downturn now threatens superpowers and emerging nations alike.

Obama urged national leaders to unite behind a global recovery plan that includes stricter financial regulation and sustained stimulus spending.

"The only way forward is through shared and persistent effort to combat threats to our peace, our peace, our prosperity and our common humanity wherever they may exist. None of this will be easy," Obama told a news conference at the end of the Group of Eight summit of major economic powers.

The president rejected suggestions that the summit fell short of expectations by failing to call for tough new sanctions on Iran for its crackdown on democracy advocates after its disputed presidential election.

"What we wanted is exactly what we got — a statement of unity and strong condemnation," Obama said. He said the leaders' declaration was even more significant because it included Russia, "which doesn't make statements like that lightly."

Obama said world leaders will reevaluate their posture toward Iran at a meeting in Pittsburgh in September of the world's 20 major industrial and developing economies.

He cited "the appalling events of Iran's presidential election" and said the world would "take stock of Iran's progress" and watch its behavior.

Leaders have made clear that for Iran to take its "rightful place" in the world, the country must adhere to international standards and behave responsibility, Obama said.

The president was next turning to more photogenic events: a meeting with the pope and a stop in Africa.

Obama, his wife and daughters were to meet Pope Benedict XVI shortly before leaving Italy late Friday for Ghana. The two men have spoken by phone but have not met before.

It is Obama's first trip to sub-Saharan Africa as president, but second visit to Africa. He gave a speech in Egypt last month.

On a pressing issue back home, Obama acknowledged that his top legislative priority — health care overhaul — had encountered rocky going in Congress during his overseas trip, with opposition building among both Republicans and economically conservative Democrats.

But he said he still was confident of getting the measure passed before Congress begins its August recess.

Asked if that timetable was "do or die," Obama responded: "I never believe anything is do or die. But I want to get it done by the August recess."

On the world economy, Obama said that rising food prices mean millions more are falling into desperate poverty "and right now, at this defining moment, we face a choice. We can either shape our future or let events shape it for us."

"While our markets are improving and we appear to have averted global collapse, we know that too many people are still struggling. So we agree that full recovery is still a ways off." He said the world leaders felt "it would be premature to begin winding down our stimulus plans."

Earlier in the week, the 186-nation International Monetary Fund released an updated economic forecast, predicting that the global economy will shrink 1.4 percent this year, the worst performance in the post-World War II period. That forecast was slightly worse than the 1.3 percent decline the IMF predicted in April.

The international lending agency did see prospects improving for next year with global growth forecast to climb to 2.5 percent, up from an April projection of 1.9 percent.

Leaders at Friday's meetings also committed themselves to a $20 billion initiative to help farmers in poor countries boost production.

Asked about his appeal to fellow leaders for the aid, Obama said he talked about his father, who was born in Kenya.

"The telling point is when my father traveled to the United States from Kenya to study ... the per capita income of Kenya was higher than South Korea's."

Now, Obama said, South Korea is industrialized and relatively wealthy while Kenya, as well as much of Africa, is still struggling economically.

"There is no reason why African countries can't do the same" and rise out of poverty with modern and open institutions, Obama said.

On nuclear weapons, Obama said the U.S. and Russia must show they're "fulfilling their commitments" to lead global efforts to curb the spread. If the two superpowers show they can limit or eliminate these weapons, it would strengthen their moral authority to speak to other potential nuclear nations such as North Korea and Iran.

Obama said there is a need to build "a system of international norms" for nuclear weapons. With respect to North Korea and Iran, he said, "It's not a matter of singling them out ... but a standard that everybody can live by."

Six months in office, Obama said he supports a streamlining of summits — the G-8, G-20 and NATO — and attending fewer of those meetings. He said the United Nations is in need of reform, but international summits fill a gap left by a U.N. structure that doesn't leverage its power as effectively as it could.

Copyright 2009 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without the prior written authority of The Associated Press. Active hyperlinks have been inserted by AOL.

2009-07-10 10:17:12