Japan and the IMF: Working Together to Promote Inclusive and Sustainable Growth

IMF News, November 7, 2017

Source details

Canonical URL: Japan and the IMF: Working Together to Promote Inclusive and Sustainable Growth

Other formats

Bibliographic details

Published: November 7, 2017

I. Introduction & Theme

Partnership between Japan and the IMF forged over the past 65 years.
Japan as a founding member has supported IMF analysis, policy advice, financial assistance, and efforts to strengthen economic governance and institutions.
Shared priorities: inclusiveness and economic stability.
Historical references:
- 1964 IMF Annual Meetings in Tokyo: Prime Minister Hayato Ikeda on promoting stable economic growth and reducing disparity.
- Recent reforms under Prime Minister Abe with increased focus on women’s economic empowerment.
Central aim: strengthen partnership to promote more inclusive and sustainable growth.

II. Shaping the Future of the Asia Pacific Region

Regional transformation and growth:
- Over the past three decades, Asia has helped transform the world, creating the world’s largest middle-classes and driving the greatest poverty reduction in history.
- Over the past decade, Asia contributed two-thirds of global growth while other regions experienced weak recoveries.
- Global economy expected to grow 3.6 percent and 3.7 percent (this year and next).
Key long-term challenges for the region:
- Demographics (young/growing populations vs. rapidly aging populations).
- Productivity growth and reenergizing productivity to ensure higher living standards.
Country group opportunities:
- Countries with young populations (e.g., India and Indonesia) can reap a “demographic dividend.”
- Countries such as China, Japan, and Korea must mitigate effects of rapidly aging populations.
Japan’s policy experience and innovations:
- Scientific and technological innovation: public initiatives promoting a “fourth industrial revolution” (artificial intelligence, big data, robotics, biotech).
- Preparations for the 2020 Tokyo Olympics as a showcase of engineering excellence (examples cited: large, free-floating holograms; building a flying car to light the Olympic flame).
- Commitment to boost proportion of women in the workforce:
- Over the past five years, the number of female workers increased by 1.6 million.
- Policy priorities include expanding access to childcare, reducing long working hours, and promoting “equal pay for equal work.”
- Potential benefits: lift potential growth and improve inclusivity.
Distributional concerns and policy responses:
- Example statistic: combined wealth of 637 Asian billionaires increased by almost a third to US$2 trillion — compared to India’s GDP where the population is 1.3 billion.
- IMF research: when benefits of growth are shared more broadly, growth is stronger, more durable, and more resilient.
- Policy implications: retool tax systems and spending policies; emphasize conditional cash transfers for low-income families; expand access to health services and high-quality education.
- Importance of cross-country sharing of experiences and effective policies.

III. Fostering Stronger Cooperation

a) Asia, Japan, and the IMF

IMF capacity development and country engagement examples:
- Work with the National Bank of Cambodia to modernize its financial system.
- Helping countries raise public revenues more efficiently.
- Training nearly 30,000 individuals through free online economics courses.
Japan’s financial and institutional support:
- Over the past three decades, Japan contributed about $600 million to IMF capacity development efforts.
- These efforts benefited more than 130 countries and contributed to economic transformations, especially in Asia.
- Japan’s steadfast backing of the Regional Office for Asia and the Pacific in Tokyo; celebrating its 20th anniversary.
- IMF membership: 189 countries.
Personnel and knowledge exchange:
- Over the past 10 years, some 150 Japanese economists have worked at the Fund.
- Personal relationships and staff exchanges strengthen cooperation and mutual learning.
- Reference to “heart-to-heart communication” — I-shin-den-shin.

b) The Global Economy and the IMF

Shared global priorities with Japan:
- Joint efforts on the Sustainable Development Goals and assistance to low-income countries.
- Cooperation on international taxation, combating money laundering and terrorist financing, and addressing climate change.
Climate impact estimate:
- A 1 degree Celsius increase in a country with an average annual temperature of 25 degrees (examples: Bangladesh, Haiti, Gabon) could reduce per capita GDP by nearly 1.5 percent.
Strengthening the multilateral system and global safety net:
- Trade: example of the planned agreement between Japan and the European Union with provisions on antitrust, corporate governance, and sustainable development.
- Financial safety net:
- 2009: Japan committed $100 billion for IMF lending programs during the financial crisis.
- Ongoing work with Japan to deepen engagement with regional financial arrangements to help ensure the global safety net’s layers work together seamlessly.

IV. Conclusion

Closing principle: “Cherish the harmony among people.” (ancient Japanese moral principle)
This spirit captures the essence of the IMF–Japan partnership: fostering deeper understanding and trust among nations.
Core message: by working together and trusting each other, partners can help create a harmonious economy in which all people can benefit.
Closing remarks: “Thank you very much — domo arigato gozaimasu.”

Keynote Address by Christine Lagarde, Managing Director, IMF — IMF Office for Asia and the Pacific 20th Anniversary: IMF-Japan Collaboration for the Asia-Pacific Region, November 7, 2017.