Annual Meetings statements: Governors welcome signs of financial recovery, caution that results must be consolidated
| Author | Elisa Diehl |
| Position | Assistant Editor, IMF Survey |
| Pages | 340-342 |
Page 340
The global economy is showing signs of recovering from the financial crises of the previous two years, according to the governors representing the IMF's 182 member countries. Speaking during the plenary sessions of the 1999 Annual Meetings of the IMF and the World Bank, held on September 28-30 in Washington, D.C. most governors nonetheless cautioned that great care would be necessary to nurture the recovery, which they considered fragile. A second key message to emerge from the governors' addresses was one of unanimous support for the enhanced Heavily Indebted Poor Countries (HIPC) Initiative and approval of the strengthened link between poverty reduction and debt relief.
The governors' addresses ranged over a number of other issues on which the two institutions and their members had focused during the past year, including strengthening the international monetary and financial systems, liberalization of capital movements, international trade issues, exchange rate regimes, and collaboration between the IMF and the World Bank.
Speaking on behalf of the Nordic and Baltic countries, Svein Ingvar Gjedrem, Governor of Norges Bank, said that international financial markets had come closer to a state of normality during the past year and that the economic outlook appeared brighter in several regions. He noted, however, that these encouraging developments did not leave room for complacency. Chinese Finance Minister Xiang Huaicheng agreed, observing that "the global economic environment, though improved, has not stabilized completely." He said that governments around the world faced the challenging task of further consolidating the recovery and stabilizing the world economy. He stressed that the developing countries would need to continue their economic restructuring and urged industrial countries to increase resource transfers to, and imports from, developing countries. For its part, he said, the Chinese government has contributed to the recovery of the Asian economy by adopting a responsible policy stance and keeping the Chinese currency stable.
Many governors outlined the risks they saw facing the international community, including incipient short-term pressures on consumer prices related to the higher oil prices of the past months and a possible slowdown in the U.S. economy. Speaking on behalf of the Arab governors, Mahfoudh Ould Mohamed Ali, Governor of the Central Bank of Mauritania, expressed hope that Europe and Japan could increase their growth rates enough to compensate for any slowdown in the U.S. economy. In this context, Ram Binod Bhattarai, Finance Secretary for Nepal, exhorted industrial countries and international financial institutions to pay greater attention to creating an "enabling environment" that would provide for the interests of the poorest and least developed countries. Yashwant Sinha, India's Minister of Finance, expressed a similar view. He said there was a risk that such efforts might not go far enough, "especially if the longstanding concerns of the developing countries do not get due attention." Among those concerns, he listed...
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