11 October 2013

2013 IMF-World Bank Annual Meetings: Policy action needed to spur faster, more balanced recovery / No more business as usual

From 11-13 October 2013, the Annual Assemblies of the World Bank and IMF group brought together the main leaders from the public sector - central banks, finance and development ministries - and from the private sector together with experts from universities, to address world issues linked to the world economic outlook, to the fight to counter poverty, towards economic development and the effectiveness of aid.

IMF

As the world begins to move on from the Great Recession, Lagarde noted that we are now moving toward a period of “Great Transition". Lagarde observed that the patterns of economic growth, especially affecting the advanced economies and emerging markets, and changes in the financial sector are shifting. Monetary policies adopted by many central banks are also in transition, she said.

Lagarde explained that these transitions will take time and will need to be managed carefully and in close cooperation. These solutions need to be “as country-specific as they can", and done “with as much cooperation as possible", Lagarde told reporters at the start of the Annual Meetings in Washington, which involve economic policymakers from the IMF’s 188 member countries, government officials, civil society organisations, journalists and invited participants from the academic and private sectors.

Lagarde also announced that, after a multi-year effort, IMF members have agreed to contribute more than 90 per cent of windfall profits from IMF gold sales to a key lending facility for poorer countries. “We have just reached the threshold of enough approval from our membership to transfer the existing gold profit to meet the financing needs of our low-income countries". Our concessional lending capacity is now sustainable, Lagarde added.

Working together

The Managing Director called on countries to adopt stronger policies on a broad front to make growth more inclusive and more sustainable:

The United States needs to manage the exit from highly accommodative monetary policy very carefully. It also needs to get its fiscal house in order. “Failure to raise the debt ceiling would cause serious damage to the US economy but also to the global economy as a result of the spillover effect", she warned.

The euro area needs to finish cleaning up its banks, forge ahead with Banking Union, and break down the barriers that are holding back growth and job creation.

Lagarde addressed a broad range of topics in her opening news conference, tackling subjects ranging from the global economy, IMF’s governance reforms, the spillover impact of the US debt ceiling, and country issues, including on China, Greece, Portugal, Nigeria, Spain, Slovenia and Egypt.

Press release

See also:

• Transcript of a press conference
• The Path Forward: A Talk with Tharman Shanmugaratnam
• Video: 2013 Annual Meetings Highlights with Gerry Rice

World Bank

President Kim announced a new initiative to provide universal financial access to all working-age adults by 2020.

“Globally, 2.5 billion adults have no mechanisms to save money, let alone pay bills through a transactional account or through a mobile phone. We believe we can chart a path toward universal financial access by bringing together multiple approaches and technologies. This is exactly the type of ambitious project that can help lift many people, especially women, out of poverty.”

Kim called for a new approach to measuring whether Bank-financed projects are successful and said he was creating a “Presidential Delivery Unit” to focus on the Bank Group’s performance as an institution and to share data and lessons across the institution and with the rest of the world.

Kim described three aspects of the Bank Group’s work in which the new delivery unit will measure outcomes:

“First, we know we must decrease administrative barriers. We promise to reduce transaction times by a third from conception of a project to first disbursement of funds.

Second, we must become a better listener. Last year, we had beneficiary feedback on 34 per cent of our projects. We promise that for our projects with clear beneficiaries, we will get feedback – from every single one of them, 100 per cent.

Third, we know that our partners and clients need to know where we work in order to better coordinate all of our collective resources. We promise to add rich details to our maps so that anyone will be able to go online, click on maps, and immediately learn where we are working and what we are doing.”

Press release

Written statements to IMF/WB:

• IMFC/Shanmugaratnam
• OECD/Gurría
• VP Rehn
• ECB/Draghi
• ECOFIN/Šadžius 
• George Osborne

See also VP Rehn's blog after IMF/WB 'jamboree': Better to be safe than sorry when exiting monetary stimulus, 15.10.13