July 23, 2015
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|---|---|---|---|---|
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As Prepared for Delivery
Good afternoon. Let me begin by expressing my thanks to President Sanchez-Cerén and Secretary Roberto Lorenzana for hosting the 13th Regional Conference. I also thank all of you, central bank governors, finance ministers, and bank superintendents, and other distinguished invitees for attending today.
It is an honor for me to be here in El Salvador, as Deputy Managing Director of the IMF. This is the first time that I take part in this important regional policy dialogue. However, for thirteen years, this conference has served as a unique forum for discussion of key economic and financial issues and has become an integral part of the policy exchange between the IMF and the economic authorities in the region. As in the past, I am sure that this conference will provide an opportunity to analyze the key challenges affecting the region and the appropriate policy responses to address them.
Challenges for the region
This is the second time that the regional conference is held in San Salvador. Since the time El Salvador hosted this conference back in 2008, the region has made important strides in consolidating macroeconomic and financial stability.
The last two conferences, however, noted that more needs to be done to replenish the policy buffers that were used during the global crisis and create more opportunities for inclusive growth. The region now faces slightly brighter external conditions, not seen in many years, due to stronger growth in the United States (the region’s main trading partner) and lower oil prices. At the same time, global interest rates will likely rise gradually from their currently low levels.
Against this background, the first point I would like to make is that there is scope to strengthen fundamentals and protect the regional economy better against adverse shocks. Policy actions to achieve fiscal sustainability are needed, as well as further reforms to upgrade monetary and exchange rate frameworks and to improve financial systems.
These actions will help ease vulnerabilities and manage potential volatility from the normalization of monetary policy in advanced economies. Second, the region needs to grow faster and share income more fairly. Reducing poverty and satisfying long-standing social demands are essential. This faster and more inclusive growth will have to come primarily from higher private investment combined with productivity enhancing reforms to improve infrastructure, human capital, security, and governance.
Key Messages
Let me outline for you the broad program of the conference. We will begin this afternoon by an in depth discussion by IMF staff of the challenges and prospects for the region, followed by an examination of the experience on fiscal management in Peru, as shared by former finance minister Luis Carranza.
Tomorrow, Director Laura van Geest will focus on the lessons from achieving stronger fiscal institutions in the Netherlands, while Governor Agustín Carstens will discuss the impact on Mexico and other emerging economies of the normalization of U.S. monetary policy.
Before we jump into this ambitious agenda, I would like to share with you three thoughts: First, I wish to thank you for your commitment to this regional conference. On many occasions, the Managing Director has highlighted the importance of international cooperation as the best way of resolving key challenges facing the global economy. This forum, where the authorities meet to discuss the global outlook and solutions to their regional challenges, is an excellent example of international cooperation.
Second, I want to assure you that the Fund, its Western Hemisphere Department, and I personally, understand the multiple challenges that you face as policy makers. For this reason, we highly appreciate the close and candid relationship that we have developed with all the countries in this region. This motivates the Fund to be even more supportive of your efforts to maintain macroeconomic stability, boost long-term growth, and ease social inequalities in your countries.
Finally, allow me to share my hope that the presentations and supporting analysis that our distinguished speakers have prepared for this conference prove helpful in your endeavors to strengthen the region’s economies. One of the most important services the Fund can provide to its members is sharing its views on the relation between the global outlook and the prospects for a particular group of countries, and on the policies to improve the latter’s economic performance and resilience.
This is what we have striven for in preparing this conference. The test of our success will be whether what you take away from our two days together proves useful in your service to your countries.
Thank you very much.
