Highlighting annual meetings of Bretton Woods Institutions
Briefing by the World Bank and the IMF on the Outcome of the 2011 Annual Meetings of the Bretton Woods Institutions which took place in Washington, DC, on 23-25 September
On 14 October, DESA’s Financing for Development Office (FfDO) organized a briefing by the World Bank and the IMF on the Outcome of the 2011 Annual Meetings of the Bretton Woods Institutions (BWIs), which took place in Washington DC on 23-25 September.
The briefing was chaired by the ASG Thomas Stelzer and featured the following presenters:
(1) Mr. Jorge Familiar Calderón, Vice President and Corporate Secretary, World Bank Group, on the meeting of the joint World Bank/IMF Development Committee;
(2) Mr. Elliott C. Harris, Special Representative of the International Monetary Fund to the United Nations, on the meeting of the IMF’s International Monetary and Financial Committee;
(3) Mr. Sudarshan Gooptu, Sector Manager, Economic Policy and Debt Department (PRMED), Poverty Reduction Economic Management Network (PREM), World Bank Group, on the World Economic Outlook; and
(4) Ms. Carolina Sanchez, Senior Economist, World Bank Group, on the 2012 World Development Report: Gender Equality and Development.
Mr. Familiar briefed delegations on the outcome of the meeting of the joint World Bank/IMF Development Committee, where the two principal themes were jobs and gender equality. The Development Committee also discussed the economic performance of developing countries in the current situation of the world economy and noted rising financial instabilities, fiscal strains, volatile commodity prices and pressures on food security. Members of the Development Committee committed themselves to pursuing policies that supported strong and inclusive growth and job creation. Mr. Familiar informed that the next World Development Report will be on jobs.
Mr. Harris shared with delegations the economic background analysis undertaken for the meeting of the IMF’s International Monetary and Financial Committee (IMFC). The world economy was in a dangerous phase, with financial instabilities, insufficient demand, and sovereign debt problems in advanced economies threatening global recovery.
Against that backdrop, IMFC agreed that advanced economies would address sovereign debt problems, pursue medium-term fiscal consolidation, ensure strong capital positions of banks, maintain accommodative monetary policies, revive weak housing markets and undertake structural reforms to boost growth and job creation. Emerging economies and developing countries would rebuild policy buffers, contain overheating and enhance their resilience in the face of volatile capital flows.
The IMFC encouraged the Fund to focus on a more effective and even-handed surveillance framework, enhancements to the global financial safety net, a review of the adequacy of Fund resources, adequate policy advice and financing to low-income countries, and further work on a comprehensive and balanced approach for the management of capital flows.
The IMFC also agreed to intensify efforts to ratify the 2010 quota and governance reform, called on the Fund to complete a comprehensive review of the quota formula by January 2013, and committed to complete the 15th General Review of Quotas by January 2014.
Mr. Gooptu provided an assessment of the global economic outlook, based on the Bank’s biannual Global Economic Prospects, which examined growth trends for the global economy and their impact on developing countries. The global economic environment for developing countries had become more precarious. Contagion from financial instabilities and economic slowdown in advanced economies, commodity price volatility, inflationary pressures and increasing precautionary savings represented significant downside risks. Market concerns about the sovereign debt crisis, in particular in the euro area, had started to adversely affect sovereign debt markets worldwide, including hitherto unaffected countries, such as lower middle-income countries. Capital flows to developing countries had started to decrease in August/September 2011.
Ms. Sanchez provided an overview of the World Development Report 2012 on “Gender Equality and Development”. In terms of economic impacts of gender equality, the report pointed to significant economic costs of persisting gender inequalities. The report highlighted the relevance, underlying reasons and policy options to deal with gender inequality.
In the ensuing discussion, delegations raised a number of issues, including the recognition of the category of LDCs at the Bretton Woods institutions and financial facilities for LDCs (Nepal), current work on commodity price volatility (New Zealand), the process of implementation of the 2010 IMF governance reforms (France), the World Bank strategy towards middle-income countries (Turkey), and ongoing work at the BWIs on the measurement of development (Denmark).
The representatives of the BWIs responded that the lack of a separate category of LDCs at the BWIs did not represent a practical disadvantage. All concessional facilities were accessible for low-income countries. The IDA crisis response window was targeted to support low-income countries. Commodity prices were being watched and related research was ongoing, focusing on mitigating the impact of price fluctuations.
The implementation of the 2010 IMF governance reforms was lagging behind. To date, only countries representing 19 per cent of quota shares had ratified the reforms, while 85 per cent were necessary for the reforms to enter into effect. The World Bank was currently reviewing its strategy towards middle-income countries. The BWIs considered multi-dimensional development indicators, including social and environmental factors, more appropriate measures of development than purely GDP-based indicators.
For more information: http://www.un.org/esa/ffd/events/2011BWIBriefingprogramme13.10.11.pdf