Ministers agree to tackle economic slowdown, money laundering and terrorist financing

• Author: Laura Wallace
• Position: Editor, IMF Survey
• Pages: 357-359

Page 357

The world's top financial leaders agreed that the international community must stand ready to take further timely action to combat the global economic slowdown, and called on all countries to move aggressively to stamp out money laundering and terrorist financing, when they met in Ottawa on November 17 for the biannual meeting of the International Monetary and Financial Committee (IMFC). The meeting--originally scheduled for late September at IMF headquarters but postponed in the wake of the September 11 terrorist attacks--was a reaffirmation of the need for the global community to work together to address the challenges facing the world economy.

Page 358

IMF Managing Director Horst Köhler-speaking at a joint press conference with IMFC Chair Gordon Brown, the U.K. Chancellor of the Exchequer-termed the outcome of the meeting "a milestone to build up confidence and make clear that the international community is united in its fight against money laundering and the financing of terrorism." Brown said "there is a new determination and political will to make the changes that are necessary to make the international economy work better, particularly in the interest of those people who are presently excluded" (see IMFC press briefing, page 365).

Combating the slowdown

For the financial leaders, the need to revive flagging growth topped the agenda. A joint statement by Köhler and World Bank President James Wolfensohn on supporting low-income countries noted that in the aftermath of the terrorist attacks, "economic policy throughout the world will need to be framed in an environment of unusually large uncertainty. Short-term economic forecasts have been revised downward for virtually all major economies; capital markets have tightened considerably, with a flight to quality across many investor categories; and slower world growth prospects have been translated into lower demand for developing country exports and lower prices for many primary commodities" (see joint statement, page 360). In recent weeks, the IMF has cut its global growth forecast to 2.4 percent for this year and next, just half of the growth registered last year (see table).

Even so, Köhler and Wolfensohn held out the expectation of a recovery during 2002."Fortunately, economic fundamentals in many countries were on a reasonably sure footing, and policy responses have already taken place or are under way to deal with...