IMF head tells policymakers from 186 countries that, though global cooperation had contained the recent financial crisis, the world must cooperate even more to build a post-crisis world and that it must take advantage of the current “momentum”.
IMF Managing Director Dominique Strauss-Kahn told policymakers from 186 countries gathered in Istanbul that global cooperation had saved the world from a far worse crisis and leaders should now seize the opportunity to shape a post-crisis world.A year ago, people feared the worst. But after concerted action to combat the crisis, the world had pulled back from the brink. “Even if it is much too early to declare victory, we have at least stepped onto the road to recovery.”
Speaking at the IMF-World Bank Annual Meetings being held in Turkey, Strauss-Kahn told the world’s economic and monetary policymakers they have an historic opportunity to create the conditions necessary for “a virtuous cycle of peace and prosperity” if they continue to work together and with the IMF on key policy measures.
‘Istanbul Decisions’ comprises the following four reform issues:
• A review of the mandate of the IMF to encompass the whole range of macroeconomic and financial sector policies that affect global stability.
• Assessing how to build on the success of the Flexible Credit Line and provide insurance to more countries as the lender of last resort. Given that IMF resources are limited relative to the precautionary demand for reserves, the IMFC asked the Fund to look at whether enhancing its financing instruments and facilities might help it better address this issue.
• An assessment of whether the Fund’s enhanced financing instruments, such as the Flexible Credit Line, could help address the question of global imbalances by reducing the need for countries to self-insure against crisis by building up large reserves.
• The IMFC endorsed the Group of Twenty proposal for the IMF to help with their mutual assessment of policies. This represents a new kind of multilateral surveillance for the IMF.
Director Dominique Strauss-Kahn stressed that “We must build on this momentum. The G-20 is more representative than the G-7, but there are still many countries left out, especially in Africa. There are 186 countries in our membership. These countries include the low-income countries, home to billions who still live in poverty, who remain economically marginalized. Their voices too must be heard. They too deserve a stake in the global economy. We need cooperation among all the countries of the world”.
© International Monetary Fund
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