Paulson could face backlash at G-20 meeting *

CNN

WASHINGTON (AP) -- U.S. Treasury Secretary Henry Paulson may get an earful Saturday in a meeting with developing country officials whose economies have been harmed by the global credit crisis, analysts said.

Experts generally praised Paulson's decision, announced Wednesday, to call the meeting of a group of industrialized and developing countries known as the G-20.

The move puts emerging market economies such as China, South Korea, and India on a similar footing as the richer countries that make up the G-7, which will meet with Paulson on Friday.

"It's a global problem and the world is more than the G-7," said Edwin Truman, a senior fellow at the Peterson Institute for International Economics. In addition to the United States, the G-7 includes Canada, Japan, France, Germany, Italy and the United Kingdom.

On Monday, Robert Zoellick, president of the World Bank, said the G-7 should be expanded to include major growing economies such as Brazil, China, India, and Mexico.

The G-7 and G-20 meetings are occurring at the same time finance ministers from many of the 185 member countries of the International Monetary Fund and World Bank are in Washington for their annual meeting.

But the G-20 meeting could provide a forum for some developing countries to criticize the United States for allegedly igniting the credit crisis, Truman said.

"It's a little bit risky because the big emerging markets are even more upset with the Americans than the rest of the G-7," said Simon Johnson, an economics professor at MIT and the former chief economist of the IMF.

The economies of many countries outside the G-7, such as South Korea, have been harmed by the credit crisis, said Douglas Rediker of the New America Foundation think tank.

They may be especially put out after following the advice of the United States and IMF and building reserves after the Asian financial crisis 10 years ago, only to now be hurt by the United States' profligate ways, he said.

But by calling for a G-20 meeting, the United States may be able to keep the recriminations behind closed doors rather than out in public, Truman said.

The meeting is unlikely to achieve any major breakthroughs, the analysts said. The likely result is a "fairly vague statement of support" for whatever the G-7 says in its communique Friday night, Johnson said.

Still, it could set the stage for a broader move to reform organizations like the IMF and World Bank, Rediker said, which many developing countries feel are unfairly dominated by the United States and Europe.

"This could be the starting point of a global discussion on how to ensure that (the financial crisis) doesn't happen again," he said.

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