APEC gathering delegates the current crisis while Obama promises broader engagement with Asia

Asia- Pacific Economic Committee leaders stated today their concerns about the economical stimulus packages that were presented to financial markets from major economical power around the world; pointing out the importance of handling such programs and the timing of which they will be withdrawn

APEC leaders announcement doesn’t come as a shock to markets where central banks around the world is trying to determine the proper time to withdraw these stimulus plans without effecting the growth of the economy where if the stimulus programs were withdrawn too early the recovery process will pause and might take more time than expected on the other hand if withdrawn to late it will cause a new financial crisis or a bubble that could trigger another recession.

Asian markets were the first to recover where the U.S and Europe followed, the International Monetary Fund (IMF) fund director stated yesterday in APEC gathering that the fiscal monetary policies will need to separate an exit strategy along with a proper timing whereas policy makers will seek a equilibrium point to preserve and protect economical growth and halting any bubbles or crisis that could result from these programs.

It is obvious how stimulus measures helped boost the economy as conditions started to improve by the start of the second quarter of this year which enabled global indices and especially the U.S to rally adding more than $20.0 trillion since the rally started in March.

G-20 summit held last week pointed out the necessity of having a timed exit plan from stimulus programs in order to rebalance global economies which will also include tightened monetary policy from central banks around the world.

The U.S president Barack Obama’s first speech on Asia that was presented yesterday in had a little something for just about everyone, where Obama was tough in the matters of North Korea and nuclear weapon disarmament urging North Korea to come again to Six-Party negotiation table. Obama also stated that Japan and China economical rise should be welcomed and not fear whereas global recovery from the worst financial recession since the Great Depression is not possible without Asian countries.

(To Read the Full Speech of President Barack Obama click here)

Obama’s Speech promised further engagements with Asian countries to further develop the region that is currently leading world economies out of recession, Obama stated that “We look to rising powers with the view that in the 21st century, the national security and economical growth of one country need to come at the expense of another”. Obama vowed renewed ties between the world’s leading economy and the fastest expanding economies in the world where IMF projected last month that Asia region will expand by 5.75% in the upcoming year, compared with 1.25% growth for the G-7 economies.

Finally the president demanded further domestic spending cuts in the next budget where the U.S budget deficit came out last week bigger than estimates as the deficit reached $176.4 billion from the previous $155.5 billion deficit and markets expectation of $165.0 billion deficit.

APEC’s 21 member economies which includes the U.S and Canada accounts for more than 1/3 of the world’s population (2.6 billion) and generates 60% of world GDP and 47% of world trade volume.