Obama: Strong US economy key to global recovery

Arriving in South Korea on Wednesday for the G-20 summit, Obama is expected to find himself on the defensive because of plans by the Federal Reserve to buy $600 billion in long-term government bonds to try to drive down interest rates, spur lending and boost the U.S. economy. Some other nations complain that the move will give American goods an unfair advantage.

In a letter sent Tuesday to leaders of the Group of 20 major economic powers, Obama defended the steps his administration and Congress have taken to help the economy.

"The United States will do its part to restore strong growth, reduce economic imbalances and calm markets," he wrote. "A strong recovery that creates jobs, income and spending is the most important contribution the United States can make to the global recovery."

Obama outlined the work he had done to repair the nation’s financial system and enact reforms after the worst recession in decades. He implored the G-20 leaders to seize the opportunity to ensure a strong and durable recovery. The summit gets under way on Thursday.

"When all nations do their part — emerging no less than advanced, surplus no less than deficit — we all benefit from higher growth," the president said in the letter.

The divisions between the economic powers was evident when China’s leading credit rating agency lowered its view of the United States, a response to the Federal Reserve’s decision to buy more Treasury bonds. Major exporting countries such as China and Germany are complaining that the Federal Reserve’s action drives down the dollar’s value and gives U.S. goods an edge in world markets.

Earlier Wednesday in Indonesia, the world’s most populous Muslim nation, Obama issued a strikingly personal appeal to the Muslim world to join the West in an unrelenting battle to defeat al-Qaida and violent extremism.

"Let me begin with a simple statement: Indonesia is part of me," he said in the language, cheering the audience of more than 6,000 mostly young people at the University of Indonesia. Obama had spent several years in the country as a boy.

He acknowledged the fraying that remains in U.S.-Islamic relations despite his best efforts at repair. He urged both sides to look beyond "suspicion and mistrust" to forge common ground against terrorism.

Obama praised this nation of islands for progress in rooting out terrorists and combatting violent extremism, and he resurrected a theme he sounded last year during visits to Turkey and Egypt: "I have made it clear that America is not and never will be at war with Islam. … Those who want to build must not cede ground to terrorists who seek to destroy."

In his university speech, Obama said he learned to appreciate the "humanity of all" people during the time he spent in Indonesia, with its thousands of islands, hundreds of languages and people from many different regions and ethnic groups.

His brief but nostalgic visit lent an unusually personal touch to the speech, portions of which were devoted to his childhood here. Obama reminisced about living in a small house with a mango tree out front, and learning to love Indonesia while flying kites, running along paddy fields, catching dragonflies and buying food from street vendors.

He also spoke of running in fields with water buffalo and goats, and of the birth of his half-Indonesian sister, Maya.

Obama, a Christian who was born in Hawaii, moved to Indonesia as a 6-year-old and lived with his mother, Stanley Ann Dunham, and Indonesian stepfather, Lolo Soetoro. He attended public and Catholic schools while in Indonesia and returned to Hawaii when he was 10 to live with his grandparents. Obama took care in his remarks to note that he is Christian; back home in the U.S., he continues to fight erroneous perceptions that he is Muslim.

Obama occasionally studied the Quran and visited a local mosque when he lived here. But he spent hardly any time in the speech discussing Islam or his religious background, except to describe Islam as a "great world religion."

Reaching out to the Islamic world, Obama said efforts to build trust and peace are showing promise but remain incomplete.

He said both sides can choose to either "be defined by our differences and give in to a future of suspicion and mistrust" or "do the hard work of forging common ground and commit ourselves to the steady pursuit of progress."

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Associated Press writers Ben Feller, Niniek Karmini, Robin McDowell and Sarah DiLorenzo in Indonesia and Kelly Olsen in South Korea contributed to this report.