Growth at 5%...but on which planet?

ONE thing, as Oscar Wilde said, is worse than being talked about - and that's not being talked about. Ministers and central bankers pouring into Washington for this weekend's economic summit know exactly what he meant.

With the US election a month away and with President Bush and challenger John Kerry squaring up to each other on television, the spotlight is well away from the International Monetary Fund headquarters on 19th Street, a short walk from the White House.

Even the obligatory 'anti-globalisation' protests seemed muted. When the IMF's annual meeting cannot even raise a decent demo, what is the world coming to?

On second thoughts, perhaps, the great and good of finance and economics assembling in Washington should be grateful for the lack of attention. In some years, the IMF meeting - which takes in the Group of Seven summit of major industrial nations and the annual get-together of the World Bank - is an amiable, back-slapping affair.

This is not one of those years. True, the IMF's 'world economic outlook' report last week was, even by the usual standards, a masterpiece of overoptimism. Dismissing the notion that soaring oil prices could be a serious threat to economic well-being, its response to the $50-a-barrel level reached last week was to raise its forecast for global growth this year from 4.6% to 5%.

Presumably, should the cost of oil reach the $80 level that some are predicting during the next 18 months, the IMF outlook will become still sunnier.

Back on planet earth, the international economy - especially its Anglo-American component - was looking less like a coltish young thoroughbred raring to get out of the gate and rather more like an exhausted old roue in a crumpled dinner jacket, dead on his feet after the bender of a lifetime.

In the US, a cocktail of powerful stimulants, chiefly huge tax cuts and rockbottom interest rates, is rapidly wearing off, leaving Bush having to explain the first net loss of jobs during any presidency since 1945.

In the wake of the dotcom bust of 2000 and the September 11 attacks in 2001, the US government ducked the painful hangover facing the world's locomotive economy, preferring a strategy of 'drinking oneself sober'.

This has worked as badly in economics as it does in real life, with each 'high' fading more quickly than the last.

One small example of this came last week with the news that several US airlines are on the brink of collapse, despite the industry having been stuffed full of about £3 billion of subsidies in the wake of September 11.

Meanwhile, Gordon Brown, escaping the near-permanent speculation back home about his political future, touched down on Thursday. The Chancellor is chairman of the IMF's ministerial committee, and he may well be wondering why he bothers with this burdensome and unpaid extra job.

Earlier this year, the IMF indirectly criticised his fancy accounting under which public-private partnerships are kept off the British Government's books. Then last month, the IMF unhelpfully suggested UK house prices could be set for a tumble.

And this weekend, Brown is faced with the tricky task of persuading the current US administration to honour a commitment made in the Bill Clinton era to boost the IMF's coffers by hundreds of millions of pounds, most of which would be paid by Washington.

This proposal involves the IMF's own funny-money, called Special Drawing Rights, a sort-of phantom world currency sometimes known as 'paper gold'. Given the spendthrift behaviour of the Bush administration, you might wonder why the US would worry about scribbling out another big cheque.

Unfortunately, the new SDRs would translate into no-strings handouts for countries combining membership of the IMF with membership of Bush's 'axis of evil'. Syria, for example, would get $90m (£50m) and Iran $465m.

If paper gold will soak up much of the Chancellor's less-than-infinite resources of patience and diplomacy, the real stuff will soak up some more.

The IMF is sitting on £42.2bn worth of the yellow metal, a legacy of the post-war version of the gold standard. Brown is steering through a scheme in which this useless stockpile can be put to work to help the poorest nations. It is complicated asset-shuffling that does not involve actual gold sales, and getting his fellow finance ministers to understand it, let alone approve it, has been a challenge.

But the looming storm clouds of an oil-price shock, a stalling of the US economy and deteriorating international security are not the whole story. For light relief, ministers can turn to Argentina, which owes the IMF huge sums that it is reluctant to repay, in punishment for which the IMF seems likely to lend it even more.

In an uncertain world, it is good to know that some things never change.