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Goodyear's Gibara: 'Global recession can be averted'

17 September 1998

Goodyear's Gibara: 'Global recession can be averted'

    CLEVELAND, Sept. 16 -- An impending global economic recession
can be averted through quick and decisive steps that require strong, timely
collective actions of major governments including the United States, United
Kingdom, Germany and Japan, financial institutions and the global business
community.
    This was the message presented this evening by Goodyear Chairman and Chief
Executive Officer Samir G. Gibara to the Cleveland Committee on Foreign
Relations.
    "We all have a huge stake in the success of a one-world economy," Gibara
noted.  "We have come so far, so fast in reaping the benefits of global free
market economies that it would be a total shame to let an avoidable global
recession send dozens of emerging countries around the world with enormous
potential scurrying back to the parochial protectionism of the past."
    With the U.S. and Western European economies currently strong and healthy,
Gibara said the odds of averting a global recession remain favorable, provided
three decisive actions are taken to avert a major world economic problem.
    "First, the Federal Reserve and the Central Banks in the European Union
should immediately coordinate a meaningful reduction in interest rates," the
Goodyear chief said.
    "A coordinated interest rate cut would not only curtail a slump in the
U.S. and West European Economies, it would alleviate pressure on the dollar
and stop the slide of foreign currencies; aid in the revival of economies in
Asia, Latin America and other emerging markets; and help stabilize stock
markets around the world."
    The second action Gibara identified as requisite is the empowerment of the
International Monetary Fund.  "Today, the I.M.F. is not equipped to address a
crisis of this magnitude, and it is currently under fire from economists and
politicians for its handling of the crises in Asia and Russia."
    "With its mission redefined and its funding substantially increased, it
can help faltering economies stay on the path to free market capitalism."
    With the Japanese banking system hopelessly in debt, Gibara said the final
imperative -- and most challenging of the three -- is the critical need for
Japan to address its financial crisis.
    "A strong response is urgently needed to prevent the major economies from
slipping further into a possible global recession," he said.  "The U.S., the
European Union and Japan must react swiftly and decisively to keep the health
of the global economy on track."