Finance Ministers Pledge to Back Reforms

Finance ministers from the Americas pledged over the weekend to stay the course on economic reform by fighting inflation and working to live within their means so as to reduce the risk of another Mexican-style economic upheaval.

“We are committed to developing and maintaining fiscal and monetary policies that bring inflation down to low levels and keep it there,” said a communique issued after two days of intense and far-reaching discussions.

U.S. Treasury Secretary Robert E. Rubin told a news conference that a priority for the hemisphere is to generate a high rate of growth that would benefit all people. He said the “common view” is that it is necessary to develop stronger economies with policies that address poverty and strengthen and support market integration.

The participants agreed to work to strengthen open and competitive financial markets as a way to achieve prosperity as they improve market and banking supervision.

Rubin said the U.S., which suffers from some of the same ailments as other countries in the hemisphere--a pitifully low personal savings level among them--intends to give itself some of the same strong medicine, including pressing for lower budget deficits.

Rubin praised Mexico for its tough measures since the peso crisis last year but said that the worst might have been avoided had its problems had been detected sooner. He expressed support for a disclosure system being devised by the International Monetary Fund.

Officials from 27 countries agreed that their banking systems need better supervision.

Some of the largest Latin American economies still face banking crises exacerbated by either a lack of supervision or by a reluctance to institute reforms necessary to curtail political influence.