## Intergovernmental Group of Twenty-Four on International Monetary Affairs and Development

_IMF News, April 20, 2017_

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**Canonical URL:** [Intergovernmental Group of Twenty-Four on International Monetary Affairs and Development](https://www.imf.org/en/news/articles/2017/04/20/sm17-intergovernmental-group-of-twenty-four-on-international-monetary-affairs-and-development)

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## Bibliographic details
- Published: April 20, 2017

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### Managing Growth under Global Uncertainty
- Meeting held: ninety-seventh meeting in Washington D.C. on April 20, 2017.
- Leadership: Abraham Tekeste, Minister of Finance and Economic Cooperation of Ethiopia (Chair); Ravi Karunanayake, Minister of Finance of Sri Lanka (First Vice-Chair); Julio Velarde, Governor of the Central Bank of Peru (Second Vice-Chair).
- Key observations:
  - Increased momentum in global economic growth; EMDCs expected to strengthen and continue to contribute the bulk of global growth.
  - Downside risks remain high, including:
    - sharper than expected tightening of global financial conditions;
    - potential turn to inward-looking policies;
    - reversal of financial regulatory reforms in systemically important advanced economies (AEs).
- Policy priorities and recommendations:
  - Boost inclusive growth to raise living standards and reduce poverty.
  - Reinvigorate investment growth via macroeconomic stability and strengthened fiscal, structural, and governance reforms tailored to country circumstances.
  - Use all policy levers to ensure broad sharing of growth benefits and reduction of high levels of income inequality.
  - Call on the IMF and WBG to support countries’ efforts toward inclusive growth.
- International monetary system and IMF role:
  - Call for a strengthened Global Financial Safety Net with an adequately-resourced, quota-based IMF at its center.
  - Request for an enhanced IMF toolkit addressing liquidity and precautionary needs and providing appropriate incentives.
  - Need to minimize perceived stigma attached to IMF facilities and provide timely, adequate support for primary commodity exporters.
  - Call for evenhandedness in lending decisions (access and conditionality) and tailoring policy advice to country circumstances.
  - Expectation of greater cooperation between the IMF and Regional Financial Arrangements.
- Other multilateral concerns:
  - Call for improved international policy coordination to minimize adverse spillovers from major economies’ policies.
  - Welcome IMF review of experiences with its Institutional View on management of capital flows; urge further work on macro-prudential and capital flow management interaction.
  - Support efforts to broaden role and use of Special Drawing Rights as a reserve currency.
  - Call for stronger multilateral cooperation to preserve an open, rules-based global trading system; concern about inward-looking policies in some AEs.
  - Encourage IFIs to broaden support for South-South cooperation and regional/subregional integration.
  - Welcome IFI and international community support for EMDCs disproportionately affected by the refugee crisis and encouragement of developmental approaches.

### Financing for Development
- Fiscal and tax policy:
  - Emphasis on strong fiscal frameworks to mobilize domestic resources for development.
  - Progress noted in improving tax revenue-to-GDP ratios and enhancing spending efficiency in EMDCs.
  - Support for progressive and growth-enhancing tax policies and expenditure measures to improve income equality and broaden opportunity.
  - Call for IFIs and donors to support capacity building for revenue mobilization and more peer learning among EMDCs.
  - Welcome work of the Platform for Collaboration on Tax and look forward to engagement with tax officials in EMDCs.
- International tax cooperation:
  - Welcome Automatic Exchange of Information (AEoI) and Base Erosion and Profit Shifting (BEPS) initiatives; call for framework ensuring effective participation of EMDCs.
  - Support development of a digital global platform with least compliance cost for AEoI implementation.
  - Appreciate UN Tax Committee work and encourage multilateral support to upgrade the Committee to an intergovernmental body.
  - Call for fair tax rules for multinational corporations, international cooperation to prevent harmful tax competition, mitigation of negative spillovers from tax policy shifts in major countries, and action on illicit financial flows.
- Infrastructure and MDBs:
  - Vital importance of scaling up investments in quality infrastructure for growth and sustainable development.
  - Call on IFIs to strengthen policy/institutional frameworks, prepare bankable projects, and crowd in private financing.
  - Call on MDBs to implement their Joint Declaration of Aspirations on Actions to Support Infrastructure Investments and enhance synergies with infrastructure initiatives.
  - MDB financing capacity depends on adequate capitalization and optimizing balance sheets while maintaining financial strength assessed with appropriate credit rating agencies’ methodologies.
- Concessional financing and IDA:
  - Concessional financing remains key; welcome successful 18th replenishment of the International Development Association (IDA).
  - As IDA integrates non-concessional lending, stress to preserve concessionality as a core element and ensure adequate concessional resources for the poorest and most vulnerable.
  - Welcome creation of the Private Sector Window, enhancement of the Crisis Response Window, and doubling of allocation to countries affected by fragility.
  - Call to smoothen graduation of IDA countries by providing adequate transitional support and waiving the acceleration repayments clause.
  - Welcome IMF decision to extend the zero interest rate on its concessional lending through the end of 2018.
  - Call on donors to ensure timely disbursements of financial commitments to low-income countries (LICs) and encourage the IMF to highlight negative implications of untimely disbursement.
- Climate finance and disaster support:
  - International commitment essential to implement the Paris Agreement; ensure availability of necessary concessional financing.
  - Look forward to developed countries delivering on commitment to provide US$100 billion per year additional financing by 2020 to support EMDCs’ climate actions.
  - Urge developed countries to authorize use of reflows from the Clean Technology Funds to implement new financing modalities.
  - Support increase in access limits in IMF rapid facilities for countries hit by very large natural disasters and welcome extension of WBG’s Catastrophe Deferred Drawdown Option facility to IDA countries.
- Debt sustainability and sovereign debt:
  - Note ongoing review of Joint WB-IMF Debt Sustainability Framework for LICs; look forward to a new, forward-looking and more flexible framework considering country-specific circumstances and impact of effective public investments on growth.
  - Encourage use of enhanced contractual clauses in sovereign debt to facilitate timely and orderly restructuring and explore solutions to address potential holdout problems.
- Financial regulation and inclusion:
  - Support continued reform of global financial regulations and strengthening AML/CFT framework while addressing unintended consequences.
  - Note FSB initiative to develop structured framework to evaluate effects of financial regulatory reforms.
  - Call for continued efforts by IMF, WBG, FSB and other standard-setters to find solutions to withdrawal of correspondent banking relationships and its disruptive impact.
  - Commitment to enhancing financial inclusion through peer learning; expect stronger IFI support for enabling digital financial innovations, managing their risks, and reducing remittance costs.
  - Call for support to promote deeper, more resilient financial sectors, including development of local currency bond markets.

### Reforming the Bretton Woods Institutions
- IMF governance and quotas:
  - Support a quota-based, adequately-resourced IMF less dependent on borrowed resources.
  - Call for full implementation of the 2010 Governance Reforms on Board Representation.
  - Call for completion of the 15th General Review of Quotas, including a new quota formula, by the Spring Meetings of 2019 and no later than the Annual Meetings of 2019.
  - Request for a revised quota formula that shifts quota shares from AEs to dynamic EMDCs, reflects growing weight of EMDCs, protects quota share of poorest countries, and puts greater weight to GDP PPP within the GDP blend.
  - Realignment of quota shares must not come at expense of other EMDCs.
  - Reiteration of longstanding call for a third Chair for Sub-Saharan Africa, provided it does not come at expense of other EMDCs’ Chairs.
- World Bank shareholding and financial capacity:
  - Look forward to World Bank Shareholding Review that upholds the Istanbul Principles to achieve equitable voting power between developed and developing and transition countries (DTCs), producing an outcome broadly acceptable to membership while protecting the smallest poor countries.
  - Call for timely implementation of the Lima Roadmap and exploration of options for meaningful realignment with balanced shareholding outcome, including allocations in line with agreed formula, special allocations, forbearance, and limits on dilution of individual DTCs.
  - Concern with IBRD’s and IFC’s strained financial capacity and expected decrease in annual lending over coming years, which may adversely affect WBG’s ability to engage members and catalyze private financing.
  - Call to explore all options to strengthen financial capacity of IBRD and IFC, including capital increases, further balance sheet optimization, and review of financial transfers from IBRD and IFC to IDA.
  - Recognition of importance of balanced portfolio for IBRD financial sustainability.
  - Welcome shift in WBG development financing approach toward strategic use of official resources to catalyze public and private investments and mobilize private capital.
- Institutional diversity and recruitment:
  - Call for strengthened IMF and WBG efforts toward greater representation of under-represented regions and countries in recruitment and career progression, including managerial levels.
  - Reiterate importance of staff diversity and gender balance at all levels, including diversity of educational institutions.

### Other Matters and Meetings
- Membership: Welcome Morocco and Haiti as new members of the Group.
- Next meeting: G-24 Ministers next meeting expected on October 12, 2017 in Washington, D.C.
- Participants: Ministers and Deputies list provided, including special guests Christine Lagarde (Managing Director, IMF) and Jim Yong Kim (President, World Bank).

*Intergovernmental Group of Twenty-Four on International Monetary Affairs and Development — Communiqué, April 20, 2017*

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## References

- [Peru and the IMF](http://www.imf.org/external/country/PER/index.htm)
- [Sri Lanka and the IMF](http://www.imf.org/external/country/LKA/index.htm)
- [The Federal Democratic Republic of Ethiopia and the IMF](http://www.imf.org/external/country/ETH/index.htm)
- [IMF Quotas -- A Factsheet](https://www.imf.org/en/about/factsheets/sheets/2022/imf-quotas)
- [Communiqués](https://www.imf.org/en/news/searchnews)
- [PRESS CENTER](http://presscenter.imf.org/)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2017/04/20/sm17-intergovernmental-group-of-twenty-four-on-international-monetary-affairs-and-development_