More Action Needed for 'Right Kind of Recovery'

Economic recovery uneven across and within countries, Strauss-Kahn says

Unemployment, inflation, food and energy prices, pose risks

G-20 agreement on indicators on imbalances and reform of international monetary system.

Speaking after finance ministers and central bank governors from the world’s leading advanced and emerging market economies met February 18-19 to consider how to take forward moves to create a more stable global economy, Strauss-Kahn said that "while we have recovery, it is not the recovery we want." Although, on average, global growth has resumed, it is uneven—both across and within countries.

"So we need really strong policy action to deliver the right kind of recovery," Strauss-Kahn told reporters, "one that not only addresses global economic imbalances but also leads to better outcomes for everyone."

At the G-20 ministerial meeting, the first under the French presidency, ministers decided on a set of indicators to measure imbalances in the global economy, in the wake of the worst recession for more than 60 years, and said that they aimed to agree by their next meeting in April on indicative guidelines against which each of these indicators will be assessed.

Uneven recovery

Strauss-Kahn said that in parts of the world—in Asia, and Latin America, countries were doing well. Even in Africa, many countries had recovered faster than in previous crises and expected to see 4.5 percent growth. But in advanced economies, the outlook for the United States was uncertain and Europe had a lot of problems, particularly in the Eurozone.

Within countries, unemployment remained high, especially in the advanced economies. While the world had put the financial crisis largely behind it and was recovering from the economic crisis, the social crisis was still there. "Growth without jobs is not meaningful to the man in the street," Strauss-Kahn said, "so we are far from having done our job"

Beyond unemployment in the advanced economies, major issues to be addressed included the risk of overheating in the emerging markets and the problems of increased food and fuel prices, which he noted were now as high as they were in 2008, and a threat particularly for low-income countries and for vulnerable people everywhere. [listen to podcast about food price hikes].

Major issues requiring action

Strong policy action was needed both nationally and internationally. More needed to be done to reform and repair the financial sector. He said...