FROM THE OFFICE OF PUBLIC AFFAIRS

Good morning. Tomorrow I will host a G-7 meeting in advance of the spring meetings of the IMF and World Bank. These meetings provide an excellent opportunity to advance the Administration's priorities on key international economic and financial policy issues. In the course of these discussions, I will make three fundamental points.

First, I have confidence in the resiliency of the U.S. economy. Although the U.S. economy has slowed, its fundamentals - productivity growth, the flexibility of our labor and capital markets, and low inflation - remain strong. The slowing economy reinforces the need for immediate and permanent tax relief to undergird more vigorous economic growth. At the same time, I attach tremendous importance to strong and balanced global growth in the context of interdependent U.S., European, and Japanese economies. A healthy global economy requires all of us to perform to our full potential. I look forward to meeting my new Japanese counterpart, Masajuro Shiokawa, and learning of his policy plans.

Second, the World Bank and other multilateral development banks (MDBs) remain central to promoting economic development. These institutions need to be even more sharply focused on the essential goal of increasing productivity in developing economies. Productivity - the amount of goods and services that each worker produces - is the ultimate driver of higher income per capita and reduced poverty. In specific terms, I look forward to discussing the outlook for loan pricing reforms and increased coordination among MDBs so that each institution focuses on its comparative advantage.

Third, I believe that the international financial institutions (IFIs) are necessary and important, and we who are the shareholders of these institutions must lead them to success. Too often they have been associated with failure. These institutions, with our leadership, can do a better job of crisis prevention. This means making clear diagnoses of problems that are still at an early stage and taking the proper policy response before a problem turns into a crisis.

This is the right thing to do for people all over the world, in the developed and developing nations. It is proper stewardship of the taxpayers' money that we in Washington provide to these institutions. Plumbers and carpenters around the nation who earn $50,000 a year and send 25% of it to Washington expect us to use their money wisely.

Tackling tough decisions is a responsibility we bear as leaders of the free world. We cannot simply follow in the wake of a crisis, when leadership could have prevented a financial meltdown from creating economic strife and destroying people's lives.

Ultimately, the less the IFIs are associated with fire-fighting and crisis, the more support they will have both internationally and here in the United States. I expect to have a meaningful discussion with the institutions' management and major shareholders on how we can make further progress on these important issues.