Geithner says force of global recession receding
RIYADH, Saudi Arabia -- U.S. Treasury Secretary Timothy Geithner said Tuesday his country has a "special responsibility" to help guide the world through its worst recession in decades, and stressed that while recovery is ongoing, setbacks are likely.
The prediction came as Geithner kicked off his first official visit to the Middle East, courting leaders of a Gulf Arab region that has seen its global financial muscle grow on the back of petrodollar fueled investments.
"The force of the global recession is receding," Geithner told Saudi business leaders in the commercial hub of Jiddah, noting that the International Monetary Fund has revised up growth forecasts in the second half of 2009 and into 2010. "Global trade is just starting to expand again," he said.
But the "process of repair and recovery is going to take considerably more time," Geithner said, adding that given the damage the meltdown inflicted globally, "it seems realistic to expect a gradual recovery, with more than the usual ups and down and temporary reversals."
Geithner, who was in London Monday, said the Obama administration is committed to preserving the openness of the U.S. economy and recognizes the country's role in spurring global recovery efforts. He said the U.S. realizes it has "a special responsibility to play" when it comes to protecting the value of the dollar.
While offering a broad takeout on the economic crisis, Geithner's stop in Saudi Arabia following meetings Wednesday with officials in the United Arab Emirates, is seen by analysts as a key push by the Obama administration to secure continued backing from a region that has morphed from one synonymous with oil into a rising financial force.
Saudi Arabia, the Arab world's largest economy and OPEC's de facto leader, recycles significant petrodollars into U.S. Treasury bonds. Government-run investment funds in the United Arab Emirates — Geithner's second Arab stop — have poured billions of dollars into U.S. banks and other companies.
