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Summers fears imbalance
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April 13, 2000: 4:08 p.m. ET
Strong U.S. growth, but weak growth elsewhere, could disrupt global expansion
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WASHINGTON (CNNfn) - Imbalances in the global economy, with overtly strong growth in the United States and exceptionally weak output in other parts of the world, is a growing concern, and steps must be taken to address it, U.S. Treasury Secretary Lawrence Summers said on Thursday.
Outlining the agenda for this weekend's meeting of finance officials from the Group of Seven (G-7) industrialized nations, Summers said Japan and Europe needed to work further at boosting domestic demand and reforming their economies to ensure they operate in a way that produces more output.
At the same time, Summers suggested that the robust pace of the U.S. economy, now in its 109th month of record economic expansion, is also causing imbalances by bringing in way more in goods and services than it sends out to the rest of the world. The United States posted a record trade deficit of $28 billion in February.
"We believe the global expansion needs to be balanced up, not balanced down," Summers told reporters. "An adjustment should take place in our countries through increased public savings. Internationally, there needs to be an adjustment through an increase in exports rather than reduced imports."
Not focusing on stocks: Summers
Summers also commented on the recent volatility of the U.S. stock market - a phenomenon a growing number of analysts on Wall Street and in Washington have suggested is behind the growing disparity between the progress of the U.S. economy and that of other economies around the world.
 Summers made similar remarks that Federal Reserve Chairman Alan Greenspan made before senators Thursday, indicating that focusing on the fundamentals of the economy and ensuring that growth continues at a moderate, non-inflationary pace is more of a concern for the Treasury than the ups and downs of the stock market.
"I think the approach we have taken in the administration, of focusing our energies and concerns on the fundamentals and working to strengthen those fundamentals, has been the prudent approach rather than focusing on the stock market," Summers said.
Summers also said he expected Russia to be a "major focus" of this weekend's meetings among the G-7, which includes representatives from Britain, Canada, France, Germany, Italy, Japan and the United States. "We will focus on the importance of crucial reforms to strengthen the rule of law, as well as comprehensive economic and structural reforms," he said.
How to pick a leader
Russian officials will attend part of Saturday's closed-door gathering, which takes place on the sidelines of the spring meetings of the International Monetary Fund and the World Bank.
And Summers took the opportunity to address the process that institutions such as the IMF and World Bank take in choosing their leaders, indicating that the practice needs to become more transparent and involve more input from a variety of outside sources in other countries.
"I believe that it is important to move toward a procedure for selecting the heads of these institutions that reflects the principles of transparency and accountability that are increasingly important to the IMF and other (international financial institutions)," he said.
His remarks come in the wake of a four-month-long battle over the new leader of the IMF. Horst Koehler of Germany was appointed to succeed outgoing managing director Michel Camdessus, who officially resigned from the post on February 14. The United States had refused to support Germany's first candidate for the job, Deputy Finance Minister Caio Koch-Weser. 
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