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U.S. Department of State

Diplomacy in Action

10. Global Economic Growth and Stability


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The Department of State's leadership, in cooperation with Treasury, in international economic organizations has helped put good governance, environmental sustainability, poverty reduction, and social safety nets at the heart of development strategies. Economic growth and political stability are mutually reinforcing; the Department played a critical role in efforts to promote economic integration and recovery in Southeast Europe, Africa, Asia, and Latin America.

Global macroeconomic conditions have an increasing impact on the ability of the United States to export and to sustain economic growth, while maintaining low domestic inflation and unemployment. Economic health is also a critical determinant of stability worldwide.

In order to increase global economic growth and stabilize economic crises when they occur, the Department encourages countries that have a major impact on the global economy to adopt market-oriented investment, legal, and regulatory reforms. Countries are also encouraged to establish public-private partnerships to take advantage of private sector expertise and demonstrate private sector commitment to a country or region. Also, strengthening the International Monetary Fund and other international financial institutions to achieve regional financial stability, a key ingredient to global economic growth, can facilitate reform.

National Interest

Economic Prosperity

Performance Goal #

EG-01

Strategic Goal

Increase global economic growth and stability.

Outcome Desired

Enhanced global economic performance and financial stability to support U.S. prosperity and exports and to maintain regional and global stability.

Performance Goal

Promote growth-oriented economic policies abroad and reduce the likelihood and severity of economic crises.

FY '01 RESULTS AS OF 9/30/01

         Goal partially achieved: cyclical slowdown in world growth, exacerbated by "September 11," but economic stability maintained.  Trade slump and lower cross-border investment flows worsened financial status of developing economies, contributing to additional demands for debt relief.

         Maintain strategy since economic recovery expected in 2002.

         Debt relief commitments to FRY, Turkey, Argentina, and Indonesia forestalled financial crises; pursuit of new trade round (Doha) and TPA affirmed U.S. commitment to global involvement.

         No program evaluations completed; none planned in FY '01.

         Performance Indicators are suitable "outcome" measures, with direct measurement of goals achieved.  Exception is "activity" measure of "IMF reform programs, where the activity does not always result in desired reform goal.

         Interagency coordination is adequate.

         Customers/stakeholders can expect further pressure for debt relief by distressed developing economies; return to faster world economic growth; and progress on developing parameters for global trade negotiations.      


Performance Indicator

FY '99 Baseline
FY '00 Actual
FY '01 Target
FY '01 Actual

Global GDP growth (IMF measure).

3.4%

4.2%

2.8%

2.4 (CY-2001); cyclical slowdown in world growth, exacerbated by September 11.

Key countries implementing IMF reform programs

Brazil, S. Korea, Indonesia, Thailand, Russia, Ukraine

Indonesia, Brazil, S. Korea, Argentina, Thailand

Indonesia, Argentina, Brazil, S. Korea, Nigeria, Thailand, Ukraine, Pakistan, Turkey

Indonesia, Argentina, Brazil, S. Korea, Thailand, Ukraine, Pakistan, Turkey; Nigeria failed to implement IMF reform program

Number of internationally approved telecom recommendations adopted by ITU member states

No consensus

40

+40

N/A

Status of new trade round

No data

No consensus reached to launch new round.

Consensus reached to launch new round.

Consensus built for decision to launch new round.

Number of countries liberalizing regimes for facilitating E-com/Internet

No data

5

+3

N/A

Verification

Source:  IMF, U.S. Government

Storage:  Department of State/EB



Countries

Worldwide

Complementary U.S. Government Activities (Non-Department of State)

Treasury:  Reform of international financial institutions, efforts to strengthen financial architecture and promote sound economic policies;

U.S. Trade Representative:  Bilateral and multilateral efforts to promote trade liberalization; and

U.S. Agency for International Development: Efforts to build capacity, combat corruption, improve health, and education.

Lead Agency

Department of State/EB

Partners

Regional bureaus, IO, INR, Treasury, U.S. Agency for International Development, U.S. Trade Representative, international financial institutions, and foreign governments



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