2A -The Michigan Daily - Thursday, October 1, 1998
WASHINGTON (AP) - Worldwide
economic turmoil has cost millions
ofjobs and more than $600 billion in
output - the equivalent of a country
the size of Canada shutting down for
a year, the International Monetary
Fund said yesterday. The agency also
warned that global recession can't be
ruled out, especially if the U.S. econ-
omy weakens more than expected.
In a sobering assessment, the IMF
slashed its economic forecast, pre-
dicting the global economy will slow
to a 2 percent growth rate this year,
the poorest showing in seven years.
The world's economy will only
slightly rebound to 2.5 percent
growth in 1999, it said.
Both figures were a full percent-
age point below IMF estimates made
just five months ago.
And even that marked-down fore-
cast may not come to pass, the IMF
warned, given the spreading finan-
cial turmoil that began 14 months
ago in Asia, leveled the Russian
economy last month and is now
AROUND THE NATION
GOP lobbies for border-check law
WASHINGTON - Republican lawmakers are lobbying the House leadershi
to repeal a controversial law requiring all foreigners to be checked at Canadian ant
Mexican border crossings.
The law goes into effect today, and northern lawmakers fear traffic jams and los
trade at the Canadian border if it is not repealed soon. Sixteen Republican law
makers sent a letter Tuesday to House Speaker Newt Gingrich, urging him to re
the law to prevent "unacceptable disruptions and delays that would effectively
the border and severely harm trade and tourism."
Rep. Fred Upton (R-Mich.) and Rep. Jack Quinn (R-N.Y.) authored the letter
signed mostly by members of Congress from northern border states includin
Michigan Reps. Joe Knollenberg and Vernon Ehlers.
The group of lawmakers wants the repeal, already passed in the Senate, to b
passed in the House before lawmakers adjourn next month to campaign. For tha
to happen, the Senate language must be included in the final version of the bil
negotiated between both chambers.
The problem is the House and Senate have very different ideas on how to han
"We're trying to have the Senate language prevail. It's going to be a struggle'
Upton said. "We really have a full-court press" on the leadership, he said.
Russian army paratroopers carry food to the village of lilnskoye yesterday. In lieu of Russia's financial crisis,
the most basic goods have risen, making the soldier's job even more urgent.
prices on even
threatening Latin American coun-
"International economic and
financial conditions have deteriorat-
ed considerably in recent months,"
the 182-nation international lending
agency said in its "World Economic
Employing unusually blunt lan-
guage for an agency that normally
searches for a silver lining to any
economic cloud, the IMF warned:
"Chances of any significant
improvement in 1999 have also
diminished and the risks of a deeper,
wider and more prolonged downturn
Just a year ago, the IMF forecast
that the global economy would
expand by 4.3 percent this year, right
in line with the long-term growth
trend over the past 25 years. But at
that time the Asian crisis had not
spread from Thailand.
The IMF, which has assembled
more than $100 billion in bailopack-
ages for Thailand, Indonesia, South
Korea and Russia, has been forced to
steadily downgrade its economic
forecasts as the crisis has intensified.
The human cost already has been
significant: Millions of people have
been thrown out of work in the hard-
est hit countries of Asia, where
economies have plunged to depres-
Saudi Arabia seeks
oil help from U.S.
WASHINGTON - For the first
time in a quarter-century, Saudi Arabia
is seeking out U.S. oil companies to
help develop the kingdom's vast energy
reserves - dramatic evidence of a
changing global oil market marked by
low prices and tough competition.
Saudi officials began talks with
seven U.S. oil companies to explore
ways for the Americans to invest in the
kingdom's oil industry, including
exploration and production.
Industry experts expect the process
to take a year or more - and even then,
it may not be a certainty.
But the overture by Saudi Crown
Prince Abdullah in a private meeting
with oil executives over the weekend
was the first time the Saudis have
sought outside participation since the
kingdom nationalized its oil industry in
1973. No foreign companies have been
involved in exploration or production
in Saudi Arabia since then.
The Saudi's direct approach caught
some oil executives by surprise. Bu
industry analysts and Middle Eas
scholars said it wasn't unexpected.
The Saudis "desperately need capita
to invest in their oil sector to keep th
oil flowing," said Yehya Sadowski
associate professor of Middle Easi
studies at Johns Hopkins Unive*
iNme held in Texas
carnival death case
AUSTIN, Texas - The death of
15-year-old girl who fell from a carni-
val ride was an accident -not murdei
at the hands of amusement company
workers, as prosecutors allege,a
defense lawyer and industry official
Prosecutors took the extraordi
step of indicting nine amusement com-
pany executives, employees and
inspectors on charges of murder it
Leslie Lane's death six months ago.
Holding executives criminall)
responsible for the death of a rider ma)
be unprecedented in the nation'
amusement ride industry, the distric
attorney's office said.
Clinton reports a $70 billion budget surplus
Los Angeles Times
WASHINGTON - President Clinton ushered
America into a deficit-free fiscal year for the first time
in 29 years yesterday, announcing that the "spell that
had gripped America and led to the quadrupling of the
debt" had been broken by a $70 billion surplus.
"Tonight at midnight, America puts an end to three
decades of deficits and launches a new era of balanced
budgets and surpluses," Clinton said in a White House
From the White House to Congress, there was a rare
mood of celebration as both Republicans and
Democrats basked in the accomplishment brought
about by a combination of fiscal discipline, a hardy
economy and good luck.
But Republicans claimed that they deserved the
accolades, saying they had pressured Clinton in 1995
- after Democrats had lost control of Congress in the
1994 elections - to adopt their commitment to bal-
ancing the budget.
"Who led? Who followed? And who got out of the
way?" asked Sen. Phil Gramm (R-Texas). "The
American people led with a dramatic election in 1994;
I believe the Republicans followed; and I believe the
president reluctantly got out of the way."
Clinton was equally stingy with the praise, claiming
the credit for himself and congressional Democrats,
who helped him pass an austere economic plan in
1993 without a single Republican vote. He also used
the occasion to attack Republicans for trying to spend
away the surplus with a five-year, $80 billion tax cut.
"Now, I am well aware that it is a popular thing ... just
four weeks and change before an election day, to serve
up a tax cut;' Clinton said. "(But) I think most
Americans would like to see the ink change from red to
black and then just dry a little before we put it at risk."
Neither side spent much time talking about the
much-acclaimed bipartisan balanced-budget agree-
ment of 1997, which Clinton signed with House
Speaker Newt Gingrich (R-Ga.), in the background.
At the time, the leaders applauded their mutual
achievement and emphasized the cooperation that
went into it. What a difference a year makes.
With congressional elections around the corner and
Clinton facing Republican-led impeachment proceed-
ings, there was little talk of collaborative efforts.
But lawmakers of both parties did agree that bal-
ancing the budget - when federal deficits were run-
ning as high as $290 billion just six years ago - has
been good for the economy, which continues to chug
along despite a global economic crisis.
Budget expert Robert Reischauer stressed that three
factors produced America's balanced budget: sensible
fiscal policy, enlightened monetary policy at the hands
of Federal Reserve Board Chair Alan Greenspan,
and "lady luck."
"Just about everything broke right that could have
broken right,"said Reischauer, a former director of the
Congressional Budget Office now at the Brookings
Institution, a Washington think tank.
Positive influences on the economy included
the peaceful dissolution of the Soviet Union,
which allowed restraint in U.S. military spending;
a slowdown in the growth of health-care costs,
which allowed employers to increase taxable
salaries instead of nontaxable benefits; and the
boom in the stock market, which brought addi-
tional capital-gains taxes into the, federal coffer,
AROUND THE WORLD
WANT TO WRITE FOR THE DAILY?
at rival's injuries
KUALA LUMPUR, Malaysia -
One day after jailed dissident Anwar
Ibrahim appeared in court with a
swollen black eye and bruises, Prime
Minister Mahathir Mohamad said "it's
not impossible" that Anwar, his former
deputy, inflicted his own injuries to gain
a public relations advantage as he battles
to clear his name of sodomy charges.
Facing domestic and international
criticism after photographs of Anwar's
battered face were shown worldwide,
Mahathir said it was premature to
blame police for the beating. He also
suggested Anwar maybe "purposefully
did something to cause the police to try
to restrain him."
Mahathir promised to investigate
Anwar's assertion that he was beaten
unconscious on his first night in cus-
tody. But his remarks yesterday seemed
certain to further fuel the controversy
surrounding Anwar's arrest Sept. 20
and add to skepticism about a chain of
events in which Anwar was abruptly
removed from his position as
politician and subjected to what man
here consider a government-orchestrat
ed smear campaign.
Anwar, meanwhile, was back i
court again yesterday, this time in
urban Petaling Jaya, where he
charged with engaging in homosexua
sex. He pleaded not guilty.
Ousted official calls
for stricter measures
MOSCOW - The internationa
financial community should trea
Russia with tough love and cut of K
narcotic of foreign loans until it carrie
out specific measures to build a market
economy and balance its budget, oust
ed chief tax collector Boris Fedoro
"My advice in helping Russia is
don't give it drugs," said Fedorov, 'wh
also was fired from his post as a depu
prime minister last month. "Deman
from Russia drastic economi
- Compiled rom Daily wire reports.
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