Peace, Economic Stability Interconnected, Says Strauss-Kahn
| Author | International Monetary Fund |
"It was not just good luck. It came from the bold decisions taken by policymakers the world over, and-just as importantly-from an unprecedented degree of economic policy cooperation. In the face of crisis, countries came together to face common challenges with common solutions, focusing on the global common good. We saw this in fiscal policy, in monetary policy, and in financial sector policy," he said in a speech in Oslo.
Strauss-Kahn stressed that the crisis is by no means over, and many risks remain. "Economic activity is still dependent on policy support, and a premature withdrawal of this support could kill the recovery. And even as growth recovers, it will take some time for jobs to follow suit. This economic instability will continue to threaten social stability," he added.
The IMF has said that recovery is expected to be slow, as financial systems remain impaired and support from public policies will gradually have to be withdrawn. Households in economies that suffered asset price busts will continue to rebuild savings while struggling with high unemployment, according to the October World Economic Outlook (WEO), released on October 1.
The challenge for the post-crisis world was to sustain the spirit of cooperation, he added in his October 23 speech. "In an atmosphere of great fear and uncertainty, cooperation was not so hard to achieve. But with optimism on the rise, and recovery on the horizon, countries may be tempted to go their own way, and to abandon the cooperative approach that served them so well during the crisis."
But he said recent decisions by the Group of Twenty (G-20) industrialized and emerging market countries gave a strong signal that multilateralism is here to stay.
Preserving international cooperation would be important in maintaining a peaceful world. Both peace and economic stability were intimately intertwined, he said.
"Ultimately, peace and prosperity feed on each other. I believe history teaches us this lesson. We all remember how the Great Depression created fertile ground for a devastating war. More recently, in many parts of the world, economic instability provoked political upheaval, social unrest, and conflict."
The IMF had played its part in the multilateral response to the current crisis, promoting the global public...
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