Intergovernmental Group of Twenty-Four on International Monetary Affairs and Development
IMF News, April 19, 2018
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- Published: April 19, 2018
Growth outlook and risks
- Welcome the recovery of global growth and investment.
- Growth prospects are firming up for emerging market and developing economies (EMDEs), while the growth outlook for several countries, mostly commodity exporters and small and fragile states, will improve more gradually.
- Heightened downside risks include:
- potential sharp tightening of financial conditions;
- further rise in protectionism;
- geopolitical tensions.
- Priority: sustaining inclusive growth while enhancing economies’ resilience through enhanced global cooperation and regional integration.
Trade, digitalization, and financial-system risks
- Recent trade restrictions are a major concern; call for work toward an open, rules-based, multilateral, and equitable trading system.
- Digitalization and technological change present opportunities and challenges; urge international financial institutions (IFIs) to strengthen cooperative work on policy responses.
- Encourage the IMF, other IFIs, and financial standard-setters to:
- assess implications of technological advances on the financial system, including crypto assets and cyber-security;
- support multilateral responses.
Capital flows, IMF Institutional View, and global financial safety net
- EMDEs have managed risks from volatile capital flows using a mix of policy measures, but there is scope to improve consistency and traction of the IMF’s advice regarding its Institutional View.
- Call for a balanced, context-based assessment of macroprudential and capital flow measures and greater international policy coordination to address capital flow volatility.
- Call for a strong Global Financial Safety Net with an adequately resourced, quota-based IMF at its center:
- call for at least maintaining the IMF’s current lending capacity and restoring the Fund’s historical ratio of own to borrowed resources;
- look forward to completion of the 15th General Review of Quotas, including agreement on a new quota formula, by the Spring Meetings of 2019 and no later than the Annual Meetings of 2019;
- reiterate call for a revised quota formula that increases the weight of GDP PPP within the GDP blend and further shifts quota shares from advanced economies to dynamic EMDEs;
- realignment of quota shares must not come at the expense of other EMDEs and should protect the quota shares and voice of all countries eligible for the Poverty Reduction and Growth Trust (PRGT) and small developing states;
- call for a third Chair for Sub-Saharan Africa to enhance the voice and representation of the region, but not at the expense of other EMDEs’ Chairs.
Special Drawing Rights (SDRs) and low-income country facilities
- Support further work by the IMF on broadening the role and use of SDRs as an instrument of international policy cooperation and their more active use as a reserve currency, including through sizable and more frequent SDR allocations.
- In the review of IMF facilities for low-income countries (LICs), support:
- a more comprehensive engagement including expanding resources of the PRGT;
- increasing access commensurate with countries’ needs;
- introducing a precautionary instrument.
- Welcome IMF and World Bank Group (WBG) efforts to prepare countries to implement the revised Debt Sustainability Framework for LICs.
- Welcome IMF Independent Evaluation Office’s assessment of the Fund’s work on fragile states, fully support its recommendation to enhance engagement with fragile states, and look forward to the Fund’s follow-up plan.
Refugee crises, migration, and correspondent banking
- Urge continued support from IFIs and the international community to developing countries disproportionately affected by refugee crises; encourage developmental approaches.
- Look forward to outcomes of the UN Global Compact on Migration and call for more analytical work on macroeconomic and developmental impacts of tightening immigration regulations.
- Call for concrete solutions to address decline in correspondent banking relationships; concerned about increased cost of remittances and call on international organizations to identify obstacles and means to reduce the cost to 3 percent of the amount remitted, as per the Sustainable Development Goals (SDGs).
Debt sustainability and liability management
- Risks to debt sustainability have increased in many countries, particularly in LICs.
- Recommend using debt responsibly to finance growth-enhancing investments, ensuring fiscal sustainability through domestic resource mobilization, and developing financing mechanisms to improve resilience in debt structures.
- Call on the IMF and WBG to:
- increase assistance on liability management as a matter of priority;
- develop a comprehensive and transparent debt reporting system.
- Emphasize joint responsibilities of debtors and creditors, referencing G-20 Operational Guidelines for Sustainable Financing and UNCTAD’s Principles for Responsible Lending and Borrowing.
- Call for a better framework for debt resolution and encourage the IMF, coordinating with other relevant bodies, to facilitate creditor coordination.
Tax cooperation, illicit financial flows, and capacity building
- Urge IMF and WBG to strengthen assistance to improve domestic resource mobilization.
- Stress importance of international tax cooperation to develop fair rules, avert harmful tax practices and competition, and enhance tax transparency.
- Welcome progress of the Automatic Exchange of Information Initiative and encourage EMDEs to commit to international standards on tax transparency.
- Support the Base Erosion and Profit Shifting (BEPS) Inclusive Framework and call for measures to enable EMDEs to participate effectively, mindful of country-specific circumstances.
- Welcome the BEPS interim report on tax challenges arising from digitalization.
- Created the G-24 working group on tax policies and international tax cooperation; look forward to its interim report in the next meeting in October.
- Reiterate call for effective international cooperation to combat illicit financial flows.
Governance, corruption, and Fund engagement
- Welcome the IMF’s adoption of an enhanced Framework strengthening support to countries to address governance vulnerabilities including corruption, where macro-critical.
- Support promotion of transparent, candid, and evenhanded Fund engagement.
- Support addressing the role of the private sector in facilitating concealment of corruption proceeds.
- Encourage judicious use of external expertise and information, including cautious use of third-party indicators.
Climate, disaster resilience, and multilateral development banks (MDBs)
- Call for all countries to implement their Nationally Determined Contributions under the Paris Climate Agreement, reflecting the principle of common but differentiated responsibilities.
- Call on the WBG and developed countries to support EMDEs’ climate actions and resilience to climate-related disasters.
- Welcome WBG’s mainstreaming of disaster risk management and investments in early warning systems; encourage support for investments in new technologies to improve disaster resilience.
- MDBs should work jointly as a system based on comparative strength to maximize development impact and catalyze private financing, including by helping make infrastructure an asset class.
- Adequate financing and effective governance are essential for MDBs to deliver on their mandate.
- Encourage timely and successful completion of the WBG Capital Package and conclusion of IBRD and IFC’s Shareholding Reviews, upholding the Istanbul Principles to achieve equitable voting power while protecting the voting share of the smallest poor countries.
- Look forward to effective implementation of IDA18 to substantially increase assistance to LICs and deliver on its five themes, including jobs and economic transformation.
- Look forward to implementation of the WBG’s Gender Strategy and urge that it builds on countries’ efforts to improve gender equality and integrates gender issues broadly; promote peer learning in implementation.
Diversity, representation, and personnel
- Call on the IMF and the WBG to strengthen efforts to address severe under-representation of some regions and countries in recruitment and career progression, including at managerial levels.
- Reiterate importance of staff diversity and gender balance at all levels, including diversity of educational institutions and backgrounds.
Meeting and participation details
- Ministers of the Intergovernmental Group of Twenty-Four held their ninety-ninth meeting in Washington D.C. on April 19, 2018 with Eran Wickramaratne, State Minister of Finance and Mass Media, Sri Lanka in the Chair; Julio Velarde, President of the Central Reserve Bank of Peru, serving as First Vice-Chair; and Kenneth Ofori‑Atta, Minister of Finance, Ghana as Second Vice-Chair.
- The Deputies’ one hundred and eleventh meeting was held on April 18, 2018 with P. Nandalal Weerasinghe, Senior Deputy Governor, Central Bank of Sri Lanka, as Chair.
- Contact for media: PRESS OFFICER: Phone: +1 202 623-7100 Email: MEDIA@IMF.org
Intergovernmental Group of Twenty-Four on International Monetary Affairs and Development — April 19, 2018