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Group of Eight warns of energy menace to world economy
2/12/2006
MOSCOW, Feb 11, 2006 (AFP): Group of Eight finance chiefs met Saturday at a heavily guarded hotel near Red Square, warning that wild energy prices menace the world economy in 2006.
The G8 finance ministers gave the alert in a draft communique being debated behind closed doors at a Moscow hotel, according to a European source at the G8 who revealed the text on condition of anonymity.
"Growth remains solid and should be maintained in 2006," the draft said. But "risks remain, notably high and volatile energy prices," the major economic powers warned.
Moscow laid on strict security for the talks.
Sidewalks around the hotel, overlooked by the towering spires of the Kremlin, were blocked off to the public and guarded by police with dogs. Army trucks were seen delivering police reinforcements.
Oil prices and energy security dominated Russia's first hosting of G8 policymakers from Britain, Canada, France, Germany, Italy, Japan, Russia and the United States.
High oil and gas prices have delivered a windfall to Russia, the world's second biggest oil exporter, giving it greater economic clout than in the past.
Russia's G8 partners were deeply concerned, however, when Moscow turned off natural gas supplies to Ukraine in January to push through sharply higher prices.
Russian Finance Minister Alexei Kudrin promised Friday that Russia would eventually ratify a separate 1991 energy charter aimed at facilitating gas flows across Europe and the former Soviet Union.
But Kudrin gave no date for actually ratifying the charter, and no mention of it was expected in the final communique.
US Treasury Secretary John Snow and other ministers smiled and joked as they took a brief break from their talks to pose for photographs. But the topics for discussion were grave.
Besides energy, the G8 ministers also were discussing how to combat infectious diseases, interrupt terrorist financing and inject life into bogged-down world trade talks.
A Japanese official told reporters the G8 ministers may issue an alert on the spread of bird flu, which has spread to Africa, a continent ill-equipped to contain the virus.
World trade talks were the main topic at an informal breakfast between the G8 policymakers and their counterparts invited from China, India, Brazil and South Africa.
Russia's leadership of the G8 this year has thrown into relief tensions with the West.
Critics accuse Putin of enacting policies that concentrate too much power in the Kremlin, that curb civil society in Russia and amount to a rollback of democratic gains since the 1991 breakup of the Soviet Union.
But Putin's unexpected announcement in Spain this week that he planned to invite Hamas to Moscow after its victory in Palestinian elections appeared to be gaining some support.
The United States said Friday it had accepted Russia's move after Moscow gave assurances it would press the militants to renounce armed struggle against Israel.
Discussion of more technical issues such as currency markets traditionally addressed by G7 finance ministers -- Russia does not take part in these talks -- were skipped to avoid excluding Russia from meetings it is hosting.
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