Speech

Meeting with Asian Civil Society, Introductory Remarks by Naoyuki Shinohara, Deputy Managing Director, International Monetary Fund

May 4, 2012

As prepared for delivery

Partnership with ADB and Japan

I am very happy you could take the time to join us today amid what I am sure has been a very busy schedule at this 45^th ADB Annual Meeting of the Board of Governors. We are also grateful for ADB giving us the chance to host this informal session. IMF and the ADB cooperate on a number of levels, including in our in-country work on the ground in Asia (as we do the World Bank). But this is only our second year to hold events at the ADB Annual Meeting itself and our first event with civil society here.

For me, this is a valuable opportunity to meet civil society representatives. The IMF values its interaction with CSOs for many reasons—most importantly because of the perspectives that civil society can offer on Fund policies. It is also valuable to meet with representatives from Asia and Japan ahead of the 2012 IMF-World Bank Annual Meetings, which will be held in Tokyo later this year. It will be only the second time we held the Annual Meetings in Tokyo (the first was in 1964) and is happening in the year IMF and Japan celebrate 60 years of partnership. I certainly hope that all of you will be able to join us there in October.

Global economy

Dominating this ADB Annual Meeting has been continued concern about the prospects for the global economy. The attention of the international community has been focused on Europe for the past few years as the crisis there has become more severe. These developments are not distant from Asia. They pose significant challenges that can have a serious impact on every country in the region. So allow me to spend a few minutes talking about the current outlook, as we at IMF see it.

At our recent Spring Meetings in Washington, D.C., my colleagues at the IMF presented the Spring 2012 Global Economic Outlook. They pointed out that while the situation in Europe has calmed down in recent months, it remains an uneasy calm. There is a risk that the sovereign and financial stresses we have witnessed could return. This uncertainty poses many challenges—both for Europe and the world.

Global growth is projected to drop to about 3.5 percent in 2012 from 4 percent in 2011. We expect the Euro area to experience a mild recession this year, with a small rebound in 2013. And we foresee growth of about 2 percent in both the U.S. and Japan. The picture is brighter in the emerging market economies, where we expect strong growth—although a bit slower than over the past few years. For example, China is likely to grow 8.2 percent and India 6.9 percent.

Asia’s prospects

Just a few days ago in Kuala Lumpur, we launched our Regional Economic Outlook for Asia-Pacific. In the Asia and Pacific region as a whole, activity slowed markedly in the last quarter of 2011, mainly due to weakening external demand. But recent indicators suggest that growth will gain momentum over the course of 2012. Nevertheless, the fragile global economy exposes Asia to serious downside risks, and policymakers need to carefully calibrate their policies to support stable non-inflationary growth in this challenging environment.

Listening to Asia’s voice

Asia continues to be the main engine of world growth, and it is important that its voice is increasingly heard in global economic debates. Its voice needs to be heard speaking for the region’s interests and advocating global economic policies that bring about a sustained recovery from the current crisis.

This voice also needs to be heard in global institutions—and certainly in the IMF. In 2010, our membership agreed on a reallocation of quotas that would increase emerging Asia’s quota and voice in the Fund significantly. Three Asian economies (China, Japan and India) will be among the 10 largest shareholders in the Fund. This governance reform is critical to ensure that the structure of the IMF reflects the realities of today’s global economy.

As you may know, one of the key issues facing the international community has been the need to ensure that there are adequate financial resources available to prevent and fight financial crises. The provision of adequate global resources through the IMF is one objective we have been working for. To that end, I was extremely pleased that Japan in April pledged to provide $60 billion in additional resources to the IMF. By the end of the week, pledges totaled $430 billion, with Korea accounting for $15 billion and Singapore $4 billion of this. Indonesia, Malaysia, and Thailand could also soon be joining this international effort. This is a concrete example of Asia demonstrating its world leadership.

Activities at the Annual Meetings in Tokyo

When the IMF Annual Meetings are held in Japan in October, there will be an opportunity to highlight the region’s success and its place in the international community. We have already begun to set our sights on Tokyo, holding a series of events around the region (of which our attendance here is one) focused on the challenges faced by Asia as an integral part of the global economy.

For civil society organizations, the focus of the Tokyo meetings will be the Civil Society Policy Forum, which runs along similar lines to the program you are attending this week in Manila. Sessions cover a wide range of topics, most of them organized by CSOs themselves. I am told that the Japanese CSOs are planning major events as part of the Forum, and I am looking forward to the lineup of seminars and consultations.

Apart from our Spring and Annual Meetings, we have a constructive dialogue throughout the year with CSOs, whether on our policies, programs, or country surveillance. We always value your insights.

I am sure that you have questions that you would like to raise today, so why don’t I stop here and give you a chance to speak.