UVA to host global economic conference

By Brian McNeill
Media General News Service
Published: May 30, 2008

High-ranking financial leaders from around the world will convene this fall at the University of Virginia to address issues arising in the rapidly evolving global marketplace.

The officials - from the United States, France, Germany, Spain, Iraq, Afghanistan, Nigeria, China, India and elsewhere - will participate in a major economic summit at the Miller Center of Public Affairs titled “The New Financial Architecture: A Global Summit” on Sept. 7-9.

The conference will aim to solve some of the planet’s most pressing financial problems, such as the subprime crisis, the impact of rising food and fuel costs, and challenges associated with the shifting centers of international economic influence.

Former U.S. Treasury Secretary John W. Snow will moderate the summit. The attendees will all be former top finance ministers from their respective countries.

“Because they are no longer bound by the constraints of their offices, their recommendations will be that much more frank and unfettered,“ said Gerald L. Baliles, a former Virginia governor and director of the Miller Center.

Snow and Baliles announced plans for this fall’s conference Thursday afternoon at the Miller Center. To give the crowd an “appetizer” of the September summit, Baliles questioned Snow about his views on the global economy.

Snow said the fast-growing economies of China, India, Brazil and Mexico are the biggest factors influencing the world’s economy. The emerging economic powerhouses are consuming more food, oil, concrete and other commodities, placing upward pressure on prices.

As these developing countries continue to grow and their quality of life continues to rise, Snow said, they will probably begin to buy more goods from the United States. Once that starts happening, the U.S. economy will likely boom, he said.

As new economic powers emerge, they will demand a louder political voice, Snow said. That could create some tension among existing powers, he said.

Regarding the record high fuel prices, Snow said he is skeptical that they will fall anytime soon. In the long-term, however, prices will drop as demand decreases. Last month, he pointed out, America’s fuel consumption fell by 5 percent. Plus, he said, high gas prices contribute to demand for new fuel-efficient vehicles, powered by such things as fuel-cell technology, hydrogen and batteries.

He scoffed at the notion of a gas tax holiday, which has been proposed by the presumptive Republican presidential nominee John McCain and Democratic presidential candidate Hillary Clinton.

“The idea of cutting 18 cents off the gas tax for summer driving? That seems to be a pretty shortsighted solution to the problem,“ Snow said.

Snow added that America’s ethanol policies must be re-thought, a sentiment that drew applause from the crowd.

At September’s conference, Baliles said, topics will include sovereign wealth funds, an emerging trend in which state-owned companies - such as in China - invest in foreign companies. In these cases, it raises questions if the state-owned firm is merely trying to make money or if it is attempting to exert the influence of its country.

Snow said he expects the summit will also tackle what he called a need to reform international financial institutions such as the G7, the G8 and the International Monetary Fund.

The summit’s participants will create a joint statement that lays out what they see as the world’s most pressing financial issues and will offer a blueprint to address those issues.

Coverage of the conference will air on CNBC.