Ministers Resolve to Counter Slowdown, Combat Food Hikes

• Author: Laura Wallace
• Position: IMF External Relations Department
• Pages: 49-51

Page 49

Against a backdrop of financial turmoil, soaring energy and food prices, and worries that a U.S. slowdown could drag down other regions, the world's top economic and financial leaders-who gathered in Washington April 12-13 for the IMF- World Bank spring meetings-backed a series of measures to support global growth, strengthen the international financial system, and combat high food prices. They also gave the IMF the green light to wrap up a package of reforms aimed at strengthening the institution's legitimacy and financial soundness, and they called on the Fund to sharpen its oversight of the global economy.

IMF Managing Director Dominique Strauss-Kahn told reporters after the International Monetary and Financial Committee (IMFC) meeting on April 12 that "what was obvious was that there is a kind of revival of the multilateral spirit, the idea that we are facing global problems and that to those global problems there must be global answers." IMFC Chairman Tommaso Padoa-Schioppa noted that "the discussion on global economy and financial markets reflects what is the mood at this moment, the sense that the chain of bad news may not have come to an end."

The IMFC-the policymaking committee of the IMF's Board of Governors-said it was "confident that the key reforms recently agreed by the Fund's Executive Board, including the strategic refocusing of the Fund on its core mandate based on its comparative advantage, will strengthen the Fund's role in promoting global financial stability and international monetary cooperation and in serving its universal membership effectively at this critical juncture."

A global slowdown

Since its previous meeting in October 2007, the IMFC said, global financial instability has increased, world economic growth has slowed, and growth prospects for 2008 and 2009 have deteriorated. It agreed that "policymakers should continue to respond to the challenge of dealing with the financial crisis and supporting activity, while making sure that inflation is kept under control. While each country's situation is different, coherent action must be taken, taking due account of cross-border interactions." As for emerging market and developing countries, it noted that, so far, they have "continued to grow strongly and show resilience in the face of the ongoing financial crisis, though their growth prospects have...