THE WHITE HOUSE
Office of the Press Secretary
For Immediate Release April 20, 1999
REMARKS BY THE PRESIDENT
ON THE ECONOMY
The Roosevelt Room
4:34 P.M. EDT
THE PRESIDENT: Thank you very much. Ladies and gentlemen, let me
begin by saying that we all know there has been a terrible shooting at a
high school in Littleton, Colorado. Because the situation, as I left to
come out here, apparently is ongoing, I think it would be inappropriate
for me to say anything other than I hope the American people will be
praying for the students, the parents, and the teachers. And we'll wait
for events to unfold, and then there will be more to say.
I have just met with my economic team to discuss the steps that we
will be taking in the weeks and months ahead to continue to advance our
prosperity at home and abroad. As you know, the economy continues to
grow in ways that benefit ordinary citizens that are virtually
unprecedented. This is happening thanks in no small measure to policies
we instituted in 1993 to help to change America to meet the changing
challenges of the new economy.
We recognized that the new economy demanded fiscal discipline, so
we balanced the budget. Now we're working to use the surpluses to
strengthen Social Security and Medicare. The new economy requires and
rewards greater skills, so even as we reduce spending in many areas, we
have almost doubled the national government's investment in education
In the new economy, we are linked to all the nations of the world
in a web of commerce and communications. So we have worked to expand
and to build -- to expand trade and to build a 21st century trading and
financial system that will benefit ordinary citizens in our country and
throughout the world.
The financial crisis that began in Asia in 1997 put our progress
at risk, and presented a very severe test to the global system that we
have worked so hard to build. Though our economy has continued to grow,
we have been affected by the Asian financial crisis -- as you can see by
the trade figures, by what has happened in steel, and by the loss of
markets by our farmers.
It's clear to me that we had to do something to contain the
crisis, to restore growth, to prevent such crises from happening in the
future. In September, I went to the Council on Foreign Relations in New
York and set out a strategy with concrete steps to speed the recovery.
We joined with other major industrial nations to act to spur growth.
Now, seven months later, we see a growing number of signs that those
steps have taken hold. Some economies once in crisis are beginning to
turn the corner.
But substantial risks and challenges remain. This is not a moment
for complacency. It's a moment to act to prevent financial crisis from
reaching catastrophic stages in the future.
In a world of 24-hour markets, we will never be able to banish such
crisis altogether, and no single proposal will solve all the problems
we have seen over the last two years. But acting on the lessons we
have learned from this experience, we can find a way to harness the
benefits of an open economy while taming the global cycles of boom and
bust, just as we have found ways to moderate those swings in our own
domestic economy. That is the central challenge we face on the
Working with the other industrial nations in the G-7, we have already
taken several important steps from developing a new contingent line of
credit for countries with strong economic policies, to helping to
restart the economies of Asia, to limiting the fallout of the crisis in
Now, the leading industrial nations must be prepared to take the next
steps in the design of a strong financial architecture that can be a
platform of prosperity for all of us in the next century. We have
worked to shape an international consensus and to develop an agenda for
long-term reform of the global financial system.
I know this is something that is very hard to grab headlines with,
but if you think about what the world has been through in the last two
years because of the problems in the global financial system, and if you
account for the fact that 30 percent of our growth until last year has
come from expanded trade, it is clear that for the United States, for
ordinary citizens in the United States, and for their counterparts
throughout the world, there are few more important things for leaders to
be doing than working on building a stable financial architecture for
the new century.
Tomorrow, Secretary Rubin will outline in greater detail our
proposals on a series of important initiatives. Starting with this
weekend's gathering of financial officials in Washington, we will work
to build support for these proposals among our colleagues at the summit
of the world's leading economies in Cologne later this year. And
eventually, we want to bring in all nations who have a stake in the
health of the global economy.
The emerging national economies need to be a part of this dialogue,
and all of them need to be convinced that we are trying to do things
that will improve the lives of average working families everywhere.
Our approach includes the following key elements: First, we
industrial countries should take steps to reduce the entire financial
system's vulnerability to rapid capital flows and excess leverage. For
example, we should strengthen bank regulations so they actually take
into account the real risks of lending.
Second, we should continue to develop a better way to respond to
crises, including appropriate sharing of responsibility by the private
Third, developing countries should take more responsibility as well,
by strengthening financial regulation and bank supervision, and
developing sustainable debt management policies, thus avoiding excessive
reliance on short-term debt. We will seek to reinforce these policies
through the actions of the international financial institutions.
Fourth, the international financial institutions should
focus their efforts on encouraging developing countries to adopt
sustainable exchange rate regimes and the macroeconomic policies
necessary to support them.
Fifth, we must ensure that the most vulnerable citizens do not bear
the brunt of these crises. That means the IMF and the World Bank must
pay more attention to social safety nets, working with countries to lay
strong foundations during good times and to maintain adequate
protections during bad times. In moments of crisis, budgets for core
social programs should be preserved, or at least should not bear the
full brunt of necessary cuts.
Sixth, we must remember that the poorest countries -- nations that
private capital flows are bypassing altogether -- need help because they
are burdened with unsustainable levels of debt. Last month, I asked the
international community to take actions to forgive $70 billion in global
debt, at a meeting we had here with representatives of over 45 African
countries. No nation committed to good governments and economic reform
should be crushed by a debt burden that it is so heavy it will punish
ordinary citizens and prevent growth, no matter what people do.
Now, if we take these steps, we can build an international
marketplace that reflects our values. And we can achieve something that
I think people in the United States want very badly -- we can put a
human face on the global economy. We can show people, here and around
the world, that there won't just be economic numbers showing growth, but
their lives will be actually improved by the work we do to draw closer
Thank you very much. (Applause.)
END 4:43 P.M. EDT
Economics and Community Systems
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