Summiteers bank on secret indicators
Venice — The seven major summit participants have agreed to use secret indicators to ensure global economic cooperation. A United States administration official told reporters in a briefing Tuesday that the use of this monitoring system, the major economic achievement of the 13th annual economic summit, will lead to better coordination of exchange-rate policies, smoothing of trade imbalances, and easing of other economic problems.
``It may not work magic,'' the official said, but indicated the agreement would act as a lever to ensure other countries about the policies that had a more global outlook.
The International Monetary Fund would be instrumental in monitoring the agreement.
The finance ministers of the seven summit participants agreed to keep the indicators secret for political reasons. However, they will include such items as monetary policy, trade data, inflation statistics, and other such economic milestones. The administration official conceded that it is likely that the exact indicators will become publicly known.
The finance ministers hope, however, that by keeping the indicators secret, this will eliminate domestic political pressures.
For example, if one country's economy were not growing fast enough, the country might be required to increase its federal spending to stimulate its economy. This might have an unpleasant inflation consequences. Because of such pressures, the administration official says it is hoped that the countries will operate on a ``best effort'' basis.
In addition, the finance ministers agreed to meet three times a year, or as needed.
The idea of using secret indicators to monitor economic progress is not new. During the last summit, in Tokyo, the participants agreed to experiment with such monitoring. This new agreement, however, will formalize the process.
If the process were in effect today, it is unclear what course of action the countries would be required to pursue. After publicly asking the Japanese and the West Germans to stimulate their economies, the US now believes no further action is required. The administration official endorsed Japan's recent move to increase its federal spending, and he indicated that the West Germans have reaffirmed their commitment to increase the country's economic activity.