2nd May 1999
The clown is going out of town
By Shafraz Farook
McDonald's Sri Lanka will open two more outlets in the outskirts of Colombo, McDonald's licensee, Rusi Pestonjee told The Sunday Times Business. The first of these outlets will open late this year at Rajagiriya and the other in Nugegoda early next year. Details of the new outlet are still being worked out he said. So far he has invested more than US$ one million on the Galle Road outlet.
McDonald's International though is expanding at a rate of one restaurant every five hours.
Since Sri Lanka is a small market compared to many others, there is no need for multiple outlets and expand at that rate, Mr. Pestonjee said.
McDonald's opened its first outlet in Sri Lanka in October last year. Since then McDonald's Sri Lanka seems to have got a firm foot in the local fast food market. Their menu though has not changed much. McDonald's manager Shiva Kumar said that a limited menu is served when entering a new market and gradually when they got their act together they would include other products. He said that this was the principle followed in most of the McDonald's outlets throughout the world.
The food too is prepared to meet international standards. Therefore, except for the bun, ice cream and lettuce everything else is imported from Australia.
Yes they are hygienic, yes they claim to use the best ingredients possible and yes they claim that they prepare every thing to meet international standards. But how many people in Sri Lanka can afford to eat at McDonald's? And how many people like it?
McDonald's officials say that they cater to the middle class and try to keep the prices low as possible. The Sunday Times spoke to a cross section of customers for their reactions. Some who had visited McDonald's Sri Lanka said they liked it, and that they ate there often. Others had different ideas and criticism. Some youngsters from a leading local school said that the bun was too soggy and that it does not taste good. It does not taste the same as the burgers served in other countries, one of the students said. Some adults felt that McDonald's did not cater to the local palate.
Sri Lanka hopeful of getting a good grade
By Mel Gunasekera
A sovereign rating for Sri Lanka will get top billing when the country's first credit rating agency commences operations this July.
Duff & Phelps Credit Rating Lanka Ltd. (DCR) a joint venture between Duff & Phelps Credit Rating USA, the International Finance Corporation (IFC), the Central Bank and other local partners consisting of leading financial institutions, will kick off operations in July, a top company official told The Sunday Times Business.
An issued capital of Rs. 35 mn (US$ 500,000) is held by Duff & Phelps USA (45%), IFC (20%) and the remainder by Central Bank and other local partners.
The company CEO has been selected and we are in the process of recruiting other staff, the top official said.
Sovereign ratings are a critical first step in the process of rating corporations, banks and structured finance transactions in emerging markets.
A country rating assesses the government's ability to repay their debts.
It also serves as benchmarks in the rating of all non-sovereign obligations, such as corporate and bank debt, and increasingly critical project and structured finance transactions.
This is especially true in emerging markets, where government policies and actions often have a major impact on the repayment of all debts.
"Sri Lanka has an excellent track record where debt repayments are concerned, the only adverse factors is the war and political scenario," the official said.
"I am quite confident the government can get a good rating," he said.
Once DCR publicly releases a sovereign rating, its analysts continue to monitor a country's performance and make changes to its ratings as events demand.
Additionally, DCR analysts visit every rated country atleast once a year and formally revise their ratings.
"DCR sovereign rating process is supported by a unique and powerful combination of local expertise and global experience," he said.
DCR would next concentrate on rating top corporations who seek international funds, and then local companies who offer debt instruments to the public.
DCR evaluates both quantitative and qualitative factors in its rating methodology. Emphasis is laid on cash flows, their sustainability and the degree to which they are subject to cyclical and seasonal variants.
"Our rating judgement is based on our outlook of the most likely future trend rather than the absolute level of historic or current financial measures," he said.
Rating is done by a rating committee, which is independent of the board and maintains strict confidentiality on client's information.
Ratings are also done with the mandate of the issuer.
Though the grading given for local ratings are not up to international levels, Sri Lankan clients can benefit from Duff & Phelps USA expertise, which promptly helps them to obtain an international rating.
Duff & Phelps USA is one of the top notch rating agencies in the world next to Standard & Poor (S&P) and Moody. However, Duff & Phelps USA strength lies in their local presence using local expertise.
Backed by 70 years of experience, Duff & Phelps USA is the only publicly traded, stand-alone credit rating agency in the world listed on the New York Stock Exchange.
Among the 50 countries it operates, the company is No: 1 in Latin America. Asian branches include India, Bangladesh, Pakistan, Indonesia, Singapore and Malaysia.
The 1998 financial results showed a 25% revenue increase topping US$ 84 mn compared to US$ 67 mn in 1997.
The Planters' Association of Ceylon (PA) has expressed grave concern over a Presidential Committee recommendation that plantation companies should revert to January 1997 procedure for felling trees in the wood lots falling within their estates.
The January 1997 procedure is needlessly bureaucratic, impractical and hampers the smooth functioning of the states, the Association said in a statement.
These procedures also amount to interference by the State in the rights of the plantations companies to utilise the timber and fuel-wood resources on the estates, as enshrined in the agreements signed by the government when the plantations were privatised, Secretary General Planters' Association, Sene Seneviratne said
The January 1997 procedure stipulated that Regional Assistant Tea Commissioners (in the case of tea estates) and Regional Deputy Directors of the Rubber Department (for rubber estates) accompanied by the Forest Officer of the area, should inspect and demarcate the trees that may be felled for fuel-wood on estates.
The procedure caused long delays that hampered the smooth functioning of estates and was replaced by a new procedure in January 1998.
The new procedure enabled companies to draw up a five year Forestry Management Plan that was approved by the Plantations Ministry.
These plans identified the extent of timber earmarked for felling over a five-year period for which approval was granted subject to conditions such as environmental impact clearance and observation of forestry conservation regulations.
However, in January 1999 all felling of timber on estates was banned on a Presidential directive, following complaints that a contractor of the State Timber Corporation had felled more timber than the extent stipulated in his permit.
The ban caused serious hardships to the estates, and on representations by the plantation companies a Presidential Committee was appointed to study the matter.
"Sadly, the plantations companies were not represented on this committee," Seneviratne said.
"Although the committee did recommend the embargo on felling be lifted, the re-introduction of the January 1997 procedures gives us little or no relief?"
He said plantation companies had urged
the government to revert to the Forestry Management Plans drawn up by the companies, which also envisaged substantial investments in reforestation with loan assistance from the Asian Development Bank.
"We cannot be expected to simply abandon these plans and revise all our budgets and medium term investments," Seneviratne said. The management agreements signed by the plantations companies specifically empowers them to "in any manner whatsoever, exploit land, other immovable property and resources of land," he said. The companies are also empowered to "collect, gather, harvest, purchase, combine, cure, process, package, market, trade or deal in any and all types of agricultural produce, plants, trees, bushes, crops, livestock, living organisms and the fruit yield and produce thereof and their by- products," he disclosed.Eight companies to be suspended
Trading of eight errant companies is likely to be suspended, for failing to submit their audited accounts for 1997/98, market sources said.
The Colombo Stock Exchange (CSE) officials confirmed they have not received the accounts of Ceylon Synthetics Textile Mills, Kapila Heavy, Lake House Investments, Metal Recyclers, Muller & Phipps, Upali Enterprises and Upali Investment Holdings.
When contacted, Lake House Investments Ltd said they had asked for additional time.
The audit was in its final stages and the accounts would be submitted shortly.
Financial sources say the Securities and Exchange Commission (SEC) has the necessary legislation to bring errant companies to the notice of the Registrar of Companies, to force them to publish their accounts.
This method has been successful in the past, with companies fined and made to toe the line.
Last year the CSE, threatened to de-list nine companies including Upali Investments, as they failed to submit audited and quarterly accounts for a considerable period of time.
However, Upali Investments later brought their accounts up to-date after requesting additional time from the CSE.
Meanwhile, market sources are questioning whether companies who do not submit their audited accounts are eligible for the 5 per cent tax benefit given under the previous budget.
Lifting of economic sanctions imposed by the United Nations on Libya is expected to boost Sri Lankan tea exports, a leading tea broking firm said.
"The tea trade in Colombo looks to the possibility of more regularised purchases of tea by Libya as well as an increase in the quantum," a John Keells market report said.
Sri Lanka has been the main supplier of tea to Libya, accounting for around 75 to 80 percent of Libyan imports.
In 1998, Libya imported 13.6 mn kilos from Sri Lanka. Libya was also Sri Lanka's second largest export market for packeted tea.
"Tea imports in recent years have shown fluctuations but could be estimated to average around 15 million kg per year," the report said.
Libya has a population just over 5 mn people and has a per capita GDP of around US$ 7,000. Crude oil is said to account for almost 90 per cent of Libyan exports and around 70 per cent of the total budget.
The United Nations Security Council suspended the sanctions against Libya in April.
The sanctions imposed in 1992, included an air and arms embargo as well as a ban on some oil equipment.
Libya's overseas financial assets were frozen but this excluded monies derived from oils sales after December 1, 1993.
The Sri Lankan tea trade is looking for a boost amidst flagging tea exports, partly due to the financial crisis in Russia.
When economists met to discuss the future of trade there was a sharp difference of view on Sri Lanka's trade prospects especially with regard to the Indo-Sri Lanka Trade Agreement.
Dr Jayantha Kelegama, who gave the keynote address at the 14th annual sessions of the Sri Lanka Association of Economists, was of the view that Sri Lanka had little to gain from the Indo Lanka trade Agreement.
He felt that the process of trade liberalisation was mostly due to the advice of the IMF rather than pragmatic considerations. The structure of the Indian and Sri Lankan economies, he argued, were such that there was little advantage to be gained for Sri Lanka having free trade with India.
He appeared to think that India could produce all it needs much more economically at lower costs and that in those commodities it cannot, the prospect of liberalisation was bleak.
Mahendra Amarasuriya's point of view was similar. He too felt that the provision of the negative list would be used to deny any advantages Sri Lanka may have from free trade with India.
The clause regarding country of origin was also considered one which would impede Sri Lankan exports to India as our industrial exports would have a large import content, owing to the narrow raw material base in the country.
The other economists who made presentations hotly contested this "dismal" picture. They contended that Sri Lanka had much to gain from the liberalisation. Dr Sanath Jayanetti presented the current tariff structures of the two countries and pointed out that we had already accepted a freer trade policy with the rest of the world and had successfully competed with other countries and increased our exports.
Therefore the arguments which were being used against the free trade pact had no basis. Other economists who made presentations held similar views.
What was very significant to an outside observer was that the two differing views came from persons with different backgrounds. The economists from the Central Bank and the Finance Ministry were firmly of the view that free trade and a free trade pact with India was to our advantage.
Protection of Sri Lanka's agriculture or industry had no place in their thinking. They argued strongly for liberalised trade. The future of Sri Lanka lay in lower tariffs which would enhance the country's economic efficiency and thereby its competitiveness in world markets, was their message.
None of the economists were against free trade. They all recognised the advantages. Then where lies the rub. Dr Anila Bandaranaike's presentation gave the clue, though her own intentions were slightly different. She spelled out a number of conditions and pre requisites necessary for the country to become competitive.
Among these were a better work ethic, different labour laws improved infrastructure and a host of other conditions. No one would deny that if these were all fulfilled, then the country would be competitive and would benefit by trade liberalisation.
But we all know that the fulfilment of these conditions is not realistic within our social and political framework in the foreseeable future. In which case must we not make our assessments and prescriptions on policy on more realistic assumptions. They say politics is the art of the possible. Should not economics too be the art of the possible?
The sudden death of Sampath Bank's dynamic GM, Mr. Kumar Abeynaike, was undoubtedly a blow to the bank. DGM, Mr. Patrick de Silva was acting GM until he retired on March 31st 1999. Mr. Anil Amarasuriya who took over this month is one of the youngest CEOs to be appointed. While it certainly is a challenge to take over at a comparatively young age, the solid team work and the well mapped out corporate plan would give him support to go forward Anil Amarasuriya says in this interview with the Sunday Times Business....
By Ruvini Jayasinghe
Q: Kumar Abeynaike was a high profile GM and during his tenure the bank was doing pretty well. Do you feel intimidated taking over?
A: Well actually no, because there has to be a leader in the eyes of the public. But within the organisation there has always been teamwork. Even during Mr. Edgar Gunatunga's time ... Now he was a very forceful banker. But there was teamwork even then. Even during Kumar's time.
We have a corporate plan.For me to drive it is with the rest of the team.
Q: Was there a line of succession?
A: The line of succession that was planned was for Kumar to go on for about at least another two years before he was given a higher designation and someone else takes over as GM.
Q: How long were you head of credit and operations before you took over as GM?
A: I was handling credit from 1982. Then head of operations retired and I took over operations also.
Q: As head of credit and operations were you prepared to take over as GM?
A: The heads of Treasury, International and I used to meet every other day. Whether it be credit or any other areas we used to discuss it together every other day. I also served in the computer steering commitee.
Q: Were there any problems or hiccups in selecting a successor?
A: I believe the board being responsible, gave it a lot of consideration and looked at it from different angles . I don't think there were any hiccups but. .. I think the moment Kumar fell sick we knew he won't be back for sometime so Patrick (de Silva) was asked to act until March 31, 1999 until his retirement. So the board anyway had that period to decide. It was not a rushed, or a forced decision.
Q: Are your first quarter results for 1999 out?
A: Yes, we know what the results are; it is going to be a flat growth. But we have yet to submit it to the stock exchange before it becomes public.
Q: Any reason for the flat growth?
A: Well the margins are declining as you know. We also had a salary revision after the first quarter.
Q: So does this mean that Sampath Bank is not in the collective agreement?
A: No we are not affiliated to that... we have a separate association called the Sampath Bank Association not affilated to the main body.
Q: As the new GM what are your immediate worries and challenges?
A: No I don't have any worries as such because the course was chartered for the bank, the corporate plan was already there. I have to take it forward and see that the corporate plan works.
The challenge is to do as well as in the past year because everybody says that this year is going to be a competitive year for banks.
Q: Are you ready for Y2K?
A:We, I believe are still the IT leader. We are going through a major upgrade. We are going in for Sun hardware. Indian company Infosys has developed software Banc 2000. With this upgrade we will be Y2K compliant. We also have a contingency plan to make the existing system Y2K complaint if the upgrade delays.
Q: How does this compare with the foreign banks for example the Hexagon at Hong Kong bank.?
A: With the upgrade we will compare ourselves even with Hong Kong Bank. At the moment we don't have the answer to the Hexagon. In addition to what we have now the upgrade will provide a parameterised environment so that introduction of new products will be that much easier. And its on an Oracle DBS platform which is architecture for the next millenium. It's a web enabled package. At the moment we don't have internet banking. But that will be possible with the upgrade. We are also going to introduce an ATM switch enabling any other bank also to use our network.
Q: How is this going to be funded?
A: We have already announced that we are spending US$ 5 million over three years. This is funded out of our own capital, we plough back our profits. In 1998 out of the Rs. 371 million profits we have paid out Rs. 50 odd million on dividends and the rest of the profits will be retained within the bank. We did a similar thing last year.
Q: What is your provisioning policy? Why do you have a general provisioning on top of specific provisioning?
A: We have specific loan loss provisioning and general provisioning. The specifics are against identified advances. If you have a book of Rs.16.5 billion, a percentage of that will be non-performing. Then there could be ones that we have not yet identified the warning signals.We follow Central Bank regulations which say that anything after three months is non performing but after six months 20% provision is made. After one year 50% and over 18 months 100%. We strictly abide by that..
Q: There are other banks that do not have general provisioning. But despite not being so conservative they don't record profits in some years?
A: We prefer to be conservative and provide for the future.
Q: After this additional general provisioning how does your growth compare with the industry?
A: We have been averaging about a 15% growth over the last five years.
Q: We understand the bank is going to issue debentures. What is this for?
A: We want to go in for a little more medium term lending.We want to expand this sector and at the same time not have a mismatch.At the moment banks can only raise fixed depostis for two years.or go in for CD for 4 years. So the maximum deposits one has is for four years. We can loan that money maybe for housing for ten years. Even an industry might want an eight year repayment. We have a mismatch.This is to cushion that. It won't be a total matching postion. The debentures will be payable in four to five years.
Q.What are the main features of the debenture?
A: It is a five year debenture. We have applied to the Central Bank, and the monetary board has to give approval. Procedure has changed now. The monetary board has to give approval. It is an unsecured debenture .It has a fixed and a floating rate.
Q: Central Bank is trying to cut the grace period for bad loans in half and bring in rules to provide after three months by next year.What is your reaction to this?
A: One reason why we are making general provisions is this. We won't be shaken up because even this year we put in something to the specific and the general.In fact on top of Rs. 100 million to specifics we have put Rs. 25 million to general.
Q; Do you think this is a good thing in the context of the local industry?
A; I think it should be modified to suit the local environment. Three months is not too bad.
Q: Is it too early?
A; It's in between. It depends on how much provisioning Central Bank will want.
Q: Why is your branch network not as extensive as some other commerical banks?
A: What we have realised is that to be successful, staff must be experienced. We are a young bank just 12 years old. We are not supposed to take trained staff from other banks.That's an unwritten understanding that we have to develop our own people.
Q: Are your 32 branches concentrated in a particular area or region?
A: Most of the banks are in Colombo. We have one in Tissamaharama, Matara , Deniyaya, Morawaka and Anuradhapura. But in Uva we are not represented so far. One thing is that we have to have strong telecommunications. That was the case two years ago but now we have satellite links so now that is not a major problem.
Q: Today banks seemed to have launched into a keen battle to mobilise funds. All kinds of seemingly attractive schemes are offered. Why does Sampth not follow this trend?
A: Our philosophy is that every customer is important.
Q; Another sore point is that commerical banks' margins are unconscionably high?
A; Not any longer.
Q: Why do you say that?
A:That is because of the comepetition.
Q: But the market is also expanding. So there should be more business to go around?
A: Not at the rate that the banks want to expand. We would have expected the market to double growth.
Q; Why do commerical banks deposits yield lower rates than treasury bills?
A: One reason is that there is a limited issue.Not everyone can obtain treasury bills. It is limited in value. But with bank deposits we are willing to accept at our rates! The more you bring maybe the rates will drop.
IMF to offer anti-Contagion credit
The IMF has agreed to offer precautionary credit lines to countries with sound economic policies to protect them from the sorts of financial crises that have swept emerging markets over the past two years, reports the Financial Times. The details of the proposal, originally mooted by US President Bill Clinton last autumn, were agreed at a marathon session of the IMF executive board on Thursday. National capitals were expected to ratify the scheme last night.
The scheme will operate alongside the IMF's existing "Supplemental Reserve Facility" established in December 1997 to provide big loans to countries facing a catastrophic loss of market confidence. The new facility is supposed to protect innocent bystanders from "contagion" when crises strike in other countries.
Countries can qualify for the "Contingent Credit Line" if they are following good policies that would not normally be expected to require the Fund's financial help, the story says.
They will need to have a clean bill of health from their latest Article 4 consultation with the Fund and to keep policy on track. Applicants will also need to observe international codes of conduct, covering statistical, monetary, financial, and fiscal policies.They will also need good relations with private creditors. There is no automatic requirement to agree parallel credit lines with the private sector, as some board members had wanted, but in practice the Fund is unlikely to look favorably on an applicant which is unable to borrow on the market, the story says.
Like the Supplemental Reserve Facility, the credit line will have no formal access limit. But in practice the sum is likely to be 300 percent to 500 percent of the applicant's "quota" or shareholding in the Fund. At the insistence of some directors, including Germany and Switzerland, the Fund has agreed it might ration the amount available if its liquidity is under pressure because of heavy demands. At present, the Fund has $76 billion in uncommitted sources, plus $46 billion available under pre-arranged credit lines.
Finance ministers and central bankers are expected to hail the scheme as an important achievement at the World Bank/IMF spring meetings next week, says the story. But some officials doubt that countries will be quick to take advantage of the facility, for fear of making investors more nervous about the possibility of a crisis.
IMF Managing Director Michel Camdessus has argued that the scheme will save the Fund money by forestalling the need for larger rescue packages when a crisis has hit.
The news comes as Agence France-Presse, reports that IMF Deputy Managing Director Stanley Fischer said yesterday that public aid alone cannot be expected to enable crisis-hit countries to meet all their payment obligations, and that the private sector will have to help in future.
"It will not in some cases be possible for the official sector to provide sufficient financing to enable a country to meet all its obligations without a private sector contribution," Fischer is cited as saying in New York.
The best way to determine the private sector contribution would be through "discussions between the country and the creditors," Fischer said, but it has become clear following the Asian crisis that the private sector must be involved in the "prevention, mitigation, and solution of financial crises.
"Meanwhile, World Bank President James Wolfensohn said private lenders to developing countries could not lend at high risk premiums and at the same time expect to be bailed out in case of problems, Le Monde also reports.
IMF, WB say debt relief must be expanded and speeded up
The leading industrial nations should cut in half the time it takes for the world's poorest countries to receive debt relief and commit billions more dollars to the effort, the International Monetary Fund and World Bank said yesterday, Bloomberg reports.
"We can argue about the details of how it should be done," yet governments must combine debt relief with building "sustainable (economic) development," said Anthony Boote, who heads the debt-relief initiative for the IMF. "That is the objective." The World Bank would like to see "deeper debt relief and broader coverage," said Axel Van Trotsenburg, the World Bank's HIPC manager.
Though the IMF and the World Bank agreed almost three years ago to launch the HIPC initiative, AFP reports, just two countries have actually received any money, out of only 10 so far judged eligible, the story says. Churches and NGOs have criticized the initiative as too little and too slow as debt relief only becomes available after a six-year qualifying period during which beneficiaries must adhere to strict IMF reform measures.
Donor countries, notably the G7 nations, have said they are now ready to speed up and widen the initiative, but questions remain over exactly how much money will be available and how it will be shared out.
"Our objective here is to have decisions on strengthening, enlarging the HIPC initiative by the annual meetings" of the IMF and the World Bank in late September, Boote said.
The HIPC program was initially aimed at some 20 of the world's poorest and most heavily indebted countries, and the idea now is to expand this to all 40 HIPCs, whose outstanding debts total some $214 billion.
But that will require more money-already the cost of debt relief under the existing program has ballooned by some 30 percent to $19 billion because of the cost to poor countries of the recent sharp fall in commodity prices, Boote said.
Some of the money could come from a sale of part of the IMF's gold reserves. Boote said "there appears to be a move towards international consensus in favor of gold sales" but cautioned that no agreement has yet been reached.
The proposal could be approved when the IMF's policymaking Interim Committee meets on Tuesday.
Gold sales alone cannot meet the cost of a massive new debt relief program, the story says, noting that World Bank President James Wolfensohn on Thursday said the World Bank had to find about $2 billion-or 10 percent of its capital-and if the initiative were extended to cover 41 countries, the Bank would have to find $4.5 billion.
Wolfensohn estimated the cost of the current system at $12.5 billion, adds the New York Times,up almost 30 percent from last summer. This is partly because falling commodity prices have reduced the export earnings of many poor countries.
A clear difference of emphasis emerged between the IMF and World Bank approaches to easing the debt burden of impoverished nations, the story says.
At a news conference on Wednesday, Michel Camdessus has said he favored making more countries eligible for relief since this would bring more developing economies under the Fund's supervision. Wolfensohn, by contrast, presented debt forgiveness as a way to release additional money for fighting poverty, saying the number of people living on less than a $1 a day would probably reach 1.5 billion by 2000.
Euro Zone countries urged to boost World Economy
The euro zone should play a greater role in supporting global demand and boosting the world economy, AFP says the IMF said yesterday. In its first review of the 11-country euro zone since the launch of the EU single currency on January 1, the IMF hailed the euro's successful launch but warned that "the tasks facing euro-area policymakers had been made more difficult by the weakening of short-term growth prospects over the past half-year.
"The Fund particularly stressed that the euro area "should play a greater role in supporting global demand" because the US economy has been the main engine of world economic growth but is expected to slow this year. With Japan still struggling to emerge from recession despite huge stimulus packages, the focus of attention on Monday's G7 finance ministers meeting in Washington will switch from Tokyo to Europe in the search for someone to share the responsibility for world economic growth with Washington, AFP says.
US President Bill Clinton, echoing the sentiments of private analysts and IMF officials, has said concerted measures taken last year by the G7 have managed to stop the rot in the world economy that set in with the 1997 Asian financial crisis. But both the IMF and the Clinton administration have made clear their anxiety about acute imbalances in the growth pattern, with the high-flying US economy accounting for nearly half the growth in the world's output last year.
IMF Managing Director Michel Camdessus has expressed concern that rising trade imbalances between the dollar, yen, and euro areas could destabilize the world economy. It is time for the US economy to slow down for a soft landing, Camdessus said last week, and "more than time" for the European economies "to do everything to stimulate growth.
"Commenting in a leader, the Financial Times, says if the US tries in the G7 to apply more pressure on the Europeans to take up the global economic baton, it will not achieve much. Even if the ECB were susceptible to such pressure, looser monetary policy would further weaken the euro and thus encourage an even bigger US trade deficit. If global growth is successfully rebalanced, it will, on past form, be the result of muddling through, rather than inspired international cooperation. It is hard to quarrel with the IMF economists' assertion that the risks are still on the downside. We await the post-post-crisis, says the leader.
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