Group of 24 communiqué: Enhanced legitimacy of IMF and World Bank linked to greater voice for developing countries

• Pages: 125-127

Page 125

Ministers welcome the strengthening in global growth prospects but note that the recovery faces some significant downside risks, such as massive payments imbalances, an impending transition to a higher interest rate environment, and persistent geopolitical concerns. They note that while economic activity has strengthened in several regions, the gains have been unevenly spread, with growth in sub-Saharan Africa, in particular, falling well short of the requirement for achieving sustained poverty reduction and reaching the Millennium Development Goals (MDGs).

Ministers consider that while the U.S. fiscal expansion, combined with a stimulative monetary stance, has helped defuse deflationary tendencies and supported the global recovery, more resolute and credible action than currently envisaged will be required to put the fiscal balance on a sustainable footing and address the large current account deficit. This would help to minimize the risk of disorderly exchange rate movements and a sharp increase in interest rates that would undermine the global recovery. Ministers believe that higher growth in the European Union is essential to the continuation of the global recovery process and see a need for a more accommodative monetary policy stance and for a deepening of structural reforms. They welcome the incipient recovery in the Japanese economy and urge the authorities to address the lingering imbalances in the financial and corporate sectors to help boost domestic sources of growth. Ministers recognize the strong contribution that the Asian emerging market economies are making to the global recovery and encourage a greater role for these countries in international economic policy coordination.

Ministers consider that to effectively address global imbalances, a cooperative multilateral approach is essential and call upon the IMF to undertake a more proactive role in the surveillance of major economies and to establish mechanisms to ensure the effectiveness of this surveillance.

Ministers consider that in order to support growth and competitiveness in emerging and developing countries, IMF policy advice should allow for higher levels of investment in infrastructure. In particular, the IMF should ensure that financing from multilateral development banks for infrastructure investment, as well as the investment of commercially run public enterprises, is accommodated in the assessment of the fiscal stance of developing countries. Ministers welcome the World Bank's Infrastructure Action Plan to step up support to developing countries through increased infrastructure lending.

Ministers are concerned about the worsening security and economic situation in Iraq and urge the United Nations to play an active role in addressing the political, economic, and social problems of the...