Intergovernmental Group of Twenty Four on International Monetary Affairs and Development
IMF News, April 11, 2019
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Bibliographic details
- Published: April 11, 2019
Meeting leadership and logistics
- Meeting held in Washington D.C., April 11, 2019.
- Chair: Julio Velarde, Governor/President of the Central Reserve Bank of Peru.
- 1st Vice‑Chair: Ken Ofori‑Atta, Minister of Finance of Ghana.
- 2nd Vice‑Chair: Peyman Ghorbani, Vice‑Governor of the Central Bank of Iran.
- Secretariat and IM F contacts listed for the meeting (IMF Communications Department; MEDIA RELATIONS Phone: +1 202 623-7100 Email: MEDIA@IMF.org).
Global outlook, risks, and international cooperation
- Findings and projections:
- Global growth is expected to moderate in 2019 but is projected to pick up in 2020, with continued dynamism of emerging market and developing economies (EMDEs), though projected growth would be uneven across EMDEs.
- Important downside risks include ongoing trade tensions, sharp tightening in financial conditions, and large swings in commodity prices, amid more limited policy space to address downturns.
- Major structural challenges cited: weak productivity growth, increasing inequality, climate change, migration, demographic shifts, and policy uncertainty.
- Policy recommendations:
- Call for stronger international cooperation to ease global risks and address identified challenges.
- Collective response to resolve trade tensions within a modern, open, rules‑based, non‑discriminatory and equitable multilateral trading system.
IMF resources, quotas, governance, and SDRs
- Lending capacity and quotas:
- Reiterate call for a strong Global Financial Safety Net with a quota‑based and adequately resourced IMF at its center.
- Call to at least maintain the IMF’s current lending capacity, preferably by increasing quota resources.
- Deep regret expressed at insufficient support so far for a quota increase under the 15th General Review of Quotas, which could require continued reliance on borrowed resources and has delayed quota realignment.
- Support continued progress in quota and governance reforms in the IMF, including agreement on a new quota formula.
- Special Drawing Rights (SDRs):
- On the 50th anniversary of the reform that included SDRs in the IMF Articles of Agreement, reiterate call for a more active use of SDRs as a reserve asset.
- Surveillance and policy spillovers:
- Call for intensified integrated surveillance to assess spillovers of domestic policies of systemically important countries on EMDEs.
- Request for balanced, context‑based IMF assessment within the Institutional View on measures used to deal with capital volatility.
- Welcome of the Fund’s work on an Integrated Policy Framework.
IMF lending toolkit, PRGT, and contingency arrangements
- Lending toolkit and program design:
- Urge IMF to continue adapting lending toolkit, including program design and conditionality, to members’ evolving circumstances and needs.
- Welcome proposals to strengthen lending toolkit for low‑income countries (LICs).
- Call for more tailored engagement with fragile situations and small developing states.
- Poverty Reduction and Growth Trust (PRGT):
- Support a significant increase in access limits within the PRGT to address erosion relative to Gross Domestic Product (GDP) and trade growth over time.
- Urge the Fund to ensure adequate resources for the PRGT to support growing balance of payments needs of LICs.
- Contingency instruments:
- Encourage IMF to reconsider a short‑term liquidity swap instrument in a way that addresses member concerns and to consider a broader set of contingency arrangements for EMDEs.
Debt vulnerabilities, creditor coordination, and capacity building
- Observations:
- Debt vulnerabilities have increased in many countries, including LICs.
- Welcome the joint IMF/World Bank Group multipronged approach for addressing rising debt vulnerabilities and look forward to a review of relevant policies.
- Recommendations:
- Urge international community to strengthen support for developing countries’ efforts to deal with interrelated challenges of debt and growth.
- Call for stronger action from the WBG, IMF and other international organizations to support capacity building for fiscal and debt management, increase efficiency of investment programs, ensure debt transparency, build a comprehensive database and develop domestic capital markets.
- Emphasize joint responsibilities of debtors and creditors in fostering debt sustainability and stress that creditor coordination should be strengthened in debt restructuring situations to facilitate sustained debtor economic and fiscal recovery.
Climate change, MDBs, and financing commitments
- Commitments and expectations:
- Members committed to meeting undertakings under their Nationally Determined Contributions.
- Call on IMF, WBG and other IFIs to intensify efforts to address climate risks.
- Expectation that developed countries deliver on commitment to provide US$100 billion per year additional financing by 2020 to support EMDEs’ climate actions.
- Role of MDBs and instruments:
- Multilateral Development Banks (MDBs) positioned to scale up EMDE investments in sustainable infrastructure to contribute to growth and climate objectives.
- MDBs should pool and diversify risks across the MDB system, scale up financing and support country‑led programs.
- Note initiative to form the Coalition of Finance Ministers for Climate Action and strongly urge adequate resourcing of the Climate Investment Funds.
Mobilizing financing for growth, SDGs, and domestic resource mobilization
- SDG financing gap:
- LICs, on average, require additional annual spending of 15 percentage points of GDP in 2030 to achieve the SDGs; relying solely on domestic resources is not feasible.
- Call for coordinated support of IFIs to mobilize necessary financing for sustainable development.
- Call for advanced countries to deliver Official Development Assistance commitments and increase concessional resources, especially for LICs; look forward to meaningful replenishments of IDA19 and the African Development Fund.
- Domestic resource mobilization and capacity development:
- Strengthening domestic resource mobilization essential for development and fiscal sustainability.
- Call for continued IMF, WBG and other organizations’ technical support and sufficient resources for IMF capacity development activities, including regional technical assistance centers.
Corruption, illicit financial flows, and international tax reform
- Anti‑corruption and illicit flows:
- Intensifying fight against corruption and increasing transparency seen as essential for efficient resource allocation.
- Call for strong international cooperation to combat illicit financial flows and develop an international platform along the lines of the Stolen Asset Recovery (StAR) initiative to recover and return stolen assets and repatriate and prosecute fugitive offenders.
- Welcome accelerated IMF work on measurement of illicit financial flows and harmonization of anti‑money laundering and counter‑terrorism financing rules.
- Emphasize strengthening rule of law and fostering fair competition.
- International taxation:
- Views of developing countries should be central in reform of international tax system rules and standards due to disproportionate implications for fiscal revenues.
- Commend G‑24 Working Group on tax policies and international tax cooperation for advocacy and peer learning; WG articulated G‑24 perspectives in Base Erosion and Profit Shifting Inclusive Framework deliberations on digital economy taxation.
- Support a multilateral solution recognizing significant economic presence without physical presence, allocating profits according to rules that account for markets and users; solution should be fair, simple, and implementable effectively in developing countries.
Governance reforms at the Bretton Woods institutions and World Bank capital package
- IMF governance:
- Stress importance of deepening voice and governance reforms for legitimacy and effectiveness of the IMF and WBG.
- Concern over lack of progress on the IMF 15th General Review of Quotas; quota increases essential for realignment.
- Continue pursuit of completion of Board Representation Reforms under the 14th Review.
- Reiterate longstanding call for a third Chair for Sub‑Saharan Africa to enhance voice and representation without detracting from another EMDE Chair.
- World Bank Group (WBG) capital package:
- Look forward to full implementation of WBG’s Capital Package with a Bank that works effectively with all developing countries and leads in global public goods agenda as laid out in WBG’s Forward Look and Capital Package.
- Full implementation will benefit from strong country partnerships, WBG commitment to decentralization and focus on measurable development outcomes.
- Important that new Environmental and Social Safeguard Policies stabilize operationally before further changes to Bank accountability mechanisms.
- Urge immediate adoption of the IFC Resolution to implement its capital package.
- WBG will need necessary scale and impact to contribute to achieving the SDGs.
Representation, recruitment, and staff diversity
- Call for IMF and WBG to strengthen efforts to address severe under‑representation of some regions and developing 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.
Participants and observers (summary)
- Ministers and Deputies from the G‑24 membership attended; Chair and Vice‑Chairs noted above.
- Participants included representatives from African Group, Asian Group, Latin American Group, observers such as Arab Monetary Fund, G‑77, ILO, Islamic Development Bank, OFID, OPEC, Saudi Arabia, South Centre, United Arab Emirates, UNCTAD, UNDESA, UNECLAC.
- Special guests included Christine Lagarde, Managing Director, IMF; Kristalina Georgieva, Chief Executive Officer, World Bank; and Akhilesh Ranjan, Chair of G‑24 Working Group on Tax.
Intergovernmental Group of Twenty Four on International Monetary Affairs and Development — Communiqué, Washington D.C., April 11, 2019.