Argentina says rich nations should focus on jobs

Tuesday, October 19, 2010 1:51 PM EDT

Argentina's economy minister called on developed nations on Monday to create more jobs rather than take measures that are weakening their currencies and hurting emerging powers.

Speaking ahead of this week's meeting of finance leaders from the G20 major developed and emerging nations, Amado Boudou said a "true currency war" was being waged, referring to policies rich nations have pursued that weaken their currencies and spur exports.

This has sent speculative cash flooding into higher-yielding developing markets, where currencies are firming at an uncomfortably quick pace.

"Developed countries should have expansive measures oriented toward their domestic markets that allow them to create jobs. This hasn't worked very well up to now but they have to insist on this," Boudou told Reuters.

Asked if he was suggesting that the world's top economies increase spending, he said: "We don't like people giving us advice, so we don't give advice either. But clearly the measures they've taken up to now have been insufficient."

The U.S. government came up with a roughly $800 billion stimulus package to help steer the U.S. economy out of recession in 2009.

It has since shied away from further big spending plans amid concerns among voters about the budget deficit. The U.S. Federal Reserve is now mulling new monetary stimulus measures which have weakened the dollar and fueled demand for emerging economy assets and currencies.

Currency tensions are sure to figure high on the agenda of the G20 gathering in South Korea, but Boudou said officials should focus on moving forward with previous commitments such as overhauling international financial regulations, diluting the power of credit rating agencies and eliminating tax havens.

"These three issues put together are related to international (capital) flows. So we think we should continue with this agenda," Boudou said. (Editing by James Dalgleish)

Source: http://www.ibtimes.com/articles/73573/20101019/federal-reserve-south-korea-argentina-g20-argentina-says-rich-nations-should-focus-on-jobs.htm