WASHINGTON (AFP) - Group of Seven powers opened a formal meeting here to boost tepid global economic growth and mull the debt and devastation of war-scarred Iraq.
Under heavy security, finance ministers and central bankers of Britain, Canada, France, Germany, Italy, Japan and the United States entered Blair House, near the White House, to discuss the world outlook.
Even after the Iraq war, the economy faces menaces from terrorism, the costs of protecting trade, housing bubbles and the hangover from the late-1990s technology-driven stock market, finance officials say.
The International Monetary Fund forecast this week that the world economy would grow by 3.2 percent this year, barely up from 3.0 percent last year, before a rebound to 4.1 percent growth in 2004.
"Nobody can estimate today with any precision the lasting costs of the war in Iraq. But so far, the risks of the war for the global economy have remained contained," IMF managing director Horst Koehler said.
Economic weaknesses in advanced economies predated the war, however, and countries must now topple long-standing obstacles to growth, he said before weekend IMF-WorldBank meetings, which follow the G7 talks.
Police cordoned off streets around the IMF and the glass-and-steel World Bank headquarters but demonstrations later Saturday were expected to focus on the US-led war in Iraq.
Iraq's debts, amounting to up to 127 billion dollars, are not on the formal agenda of the G7 or the global financial talks.
But the United States has promised to raise the issue.
It is pressuring Group of Seven and other partners -- in particular, France, Germany and Russia, all opposed to the US-led war on Iraq -- to forgive the Iraq debts.
US Treasury Secretary John Snow said he expected "substantive discussions" on Iraq with the G7 finance ministers and central bankers, and in weekend talks at the International Monetary Fund and World Bank.
"It is important to recognize there that it is not simply recovering from 25 days of conflict but, rather, the task ahead is recovering from 25 years of economic misrule and mismanagement," Snow said.
Deputy US Defense Secretary Paul Wolfowitz began the arm-twisting Thursday, telling Congress that France, Germany and Russia could contribute to the reconstruction of Iraq by wiping clean Iraq's enormous debt.
Some movement on the debt question was visible.
Late Friday, Russia indicated it was prepared to think about waiving eight billion dollars owed by Iraq, or 16 billion dollars with interest payments, at a June summit of the Group of Eight -- the G7 plus Russia -- in the French resort of Evian.
"We are prepared to look into this question. We are prepared to discuss this," Russian President Vladimir Putin said.
Snow and French Finance Minister Francis Mer agreed Friday that it was important to deal with the Iraqi debt but they did not discuss a strategy. France estimates it is owed 1.7 billion dollars minus interest.
In Berlin, however, a spokesman for the German Finance Ministry said the question of wiping clean Iraq's enormous debt was a matter for the Paris Club of sovereign creditors and could not be decided bilaterally.
On the eve of the talks, the Group of 24, a coalition of developing countries from Africa, Asia and Latin America, expressed alarm over the destruction and misery left by the war as well as the economic impacts.
But the focus must not rest only on Iraq, said Lesotho Finance Minister Timothy Thahane.
"Clearly the attention is now on Iraq. Yesterday it was Kosovo and eastern Europe. We still have to struggle for resources. Development is a long-term process," he said.
FAIR USE NOTICE: This page contains copyrighted material the use of which has not been specifically authorized by the copyright owner. NoNonsense English offers this material non-commercially for research and educational purposes. I believe this constitutes a fair use of any such copyrighted material as provided for in 17 U.S.C § 107. If you wish to use copyrighted material from this site for purposes of your own that go beyond fair use, you must obtain permission from the copyright owner, i.e. the media service or newspaper which first published the article online and which is indicated at the top of the article unless otherwise specified.