Intergovernmental Group of Twenty-Four on International Monetary Affairs and Development
IMF News, October 12, 2017
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Bibliographic details
- Published: October 12, 2017
Meeting details
- Ninety-eighth meeting held in Washington, D.C. on October 12, 2017.
- Chair: Abraham Tekeste, Minister of Finance and Economic Cooperation of Ethiopia.
- First Vice-Chair: Mangala Samaraweera, Minister of Finance and Mass Media of Sri Lanka.
- Second Vice-Chair: Julio Velarde, Governor of the Central Bank of Peru.
- Deputies meeting: one hundred and tenth meeting of the Deputies on October 11, 2017 (Chair: Fisseha Aberra, Director of the International Cooperation Directorate at the Ministry of Finance of Ethiopia).
Managing the impact of developments in the global economy (communiqué highlights)
- Global context and risks:
- "We welcome the increasing momentum in global growth, trade and investment."
- EMDEs will "continue to account for the bulk of global growth."
- Commodity prices are "stabilizing," allowing commodity exporters to "rebuild buffers" and "further diversify their economies."
- Medium-term downside risks identified: "a potential increase in protectionism, sudden tightening of global financial conditions, roll back of regulatory reforms, and geopolitical risks."
- Emphasis on "international cooperation and policy coordination" and "multilateral commitment" to maintain "an open, rules-based trading system."
- IMF and global safety net:
- "The IMF is central to the Global Financial Safety Net."
- Calls to "encourage greater cooperation between the IMF and the Regional Financial Arrangements."
- Welcome ongoing review of the IMF’s toolkit, including "possible new instruments" to meet liquidity and precautionary needs; look forward to its "early conclusion."
- Call for "evenhanded surveillance and lending decisions" and extension of the mandate of the IMF’s Evenhandedness Committee to include the Fund’s lending activities.
- "More work is needed to address and minimize the stigma attached to IMF’s facilities."
- Support for work to "broaden the role and use of the Special Drawing Rights (SDR) as a reserve currency."
- Support for Low-Income Countries (LICs):
- In the 2018 review of the IMF’s Facilities for LICs, support for "a more comprehensive engagement with LICs."
- Proposals include "substantially expanding the resources of the Poverty Reduction and Growth Trust (PRGT)," "increasing access commensurate with countries’ needs," and "introducing a precautionary instrument for LICs."
- Capital flows and macroprudential measures:
- Welcome IMF review of country experiences addressing systemic risks from volatile capital flows.
- Call for "a fair assessment of the intent, content and design of macro-prudential and capital flow management measures."
- Climate and disaster response:
- Call for all countries to implement the Intended Nationally Determined Contributions under the Paris Climate Agreement, reflecting "the principle of common but differentiated responsibilities."
- Note that "Extreme weather events have substantial adverse human and economic consequences in developing countries, in particular LICs and small island states."
- Call for "a strong global response to the recent devastating hurricanes that hit the Caribbean."
- Request that developed countries deliver on their commitment to provide "US$100 billion per year new and additional financial resources by 2020" to support developing countries’ climate actions.
- Urge developed countries "to authorize the use of reflows to enhance financing from the Clean Technology Funds."
- Refugees, fragility, and migration:
- Urge continued support from IFIs and the international community to countries disproportionately affected by the refugee crisis, including internally displaced populations.
- Encourage "developmental approaches" and call on IFIs to "monitor and address the macroeconomic and development consequences of tightening migration regulations."
- Call on IFIs to strengthen support for "conflict affected, fragile, and small states," including "deploying innovative financial instruments and partnerships."
- Financial integrity and correspondent banking:
- Welcome global efforts against money laundering and financing of terrorism but call for "more concrete global actions to address the decline of correspondent banking relationships."
- Call for "stronger multilateral cooperation to effectively combat illicit financial flows."
Building the foundations for inclusive growth
- Growth, jobs, and inequality:
- Key objective: "transform our economies to boost growth, improve job creation and reduce inequality and poverty."
- Emphasis on "improving productivity and diversifying our sources of growth" and capturing benefits of trade and technological change.
- Support for African Caucus focus on "agricultural transformation" and the "G20 Compact for Africa."
- Call on IFIs to strengthen support for "human capital development, skill building and labor market policymaking" to foster quality jobs and smooth labor market adjustments.
- Ask IFIs to support "greater financial inclusion and economic opportunities for women" and to "encourage their stepped-up support for south-south cooperation on trade, knowledge and investments."
- Domestic resource mobilization and fiscal policy:
- Urge the IMF and the World Bank Group (WBG) to continue strengthening assistance in "improving domestic resource mobilization" through "progressive tax policies" and "more efficient and better targeted public spending."
- Recommend "peer learning among emerging market and developing countries (EMDCs) through collaborative platforms and capacity building through regional seminars."
- Welcome the Platform for Collaboration on Tax and look forward to its engagement with tax officials of EMDCs.
- IMF and WBG should "assess the social and distributional impact of fiscal adjustment programs" and ensure inclusion of "adequate social protection measures for the poor."
- International tax cooperation:
- Highlight importance of effective international tax cooperation for EMDCs.
- Support for the "Automatic Exchange of Information initiative" and the "inclusive framework on Base Erosion and Profit Shifting."
- Call for measures for their effective implementation in EMDCs and appreciation of the UN Tax Committee’s work; encourage multilateral support to upgrade the Committee to an intergovernmental body.
- Call for attention to "developing fair tax rules to guide the taxation of multinational corporations" and for "international cooperation to prevent harmful international tax competition."
- Infrastructure and MDB role:
- Reiterate importance of scaling up infrastructure investments to achieve sustainable development goals.
- Welcome IMF, WBG, and other IFIs support to increase "the efficiency of public investments in infrastructure" and their impact on connectivity, distributional and climate objectives.
- MDBs urged to activate financing approaches to "make renewable energy affordable" and to strengthen "policy and institutional frameworks, strengthening project preparation and catalyzing private sector financing."
- Welcome the WBG’s focus on "maximizing financing for development" and call on MDBs to deliver on their Joint Declaration of Aspirations on Actions to Support Infrastructure Investments, including "concrete and time-bound actions," development of "new risk mitigation instruments" and positioning infrastructure investment "as an asset class."
- Debt sustainability:
- Welcome reform of the Joint World Bank-IMF Debt Sustainability Framework for LICs.
- Stress need to provide "the necessary time for, and support to, country authorities to prepare and ensure readiness to implement the new framework."
- Insist debt sustainability assessments consider "the quality of public investments and the significant impact of reducing infrastructure gaps on growth."
- Governance and anti-corruption:
- Support strengthening collaboration between the WBG and IMF in supporting countries to "improve governance and tackle corruption comprehensively."
- Note the IMF’s review of its role in addressing governance and corruption issues "at the country level in an evenhanded manner."
Reforming the governance of the Bretton Woods Institutions
- IMF governance and quotas:
- Support for "a quota-based, adequately-resourced IMF that is less dependent on borrowed resources."
- Call for "at least maintaining the current lending capacity of the IMF."
- Expectation 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."
- Call for a revised formula that "emphasizes greater weight of GDP PPP within the GDP blend and further shifts quota shares from advanced economies to dynamic EMDCs," while "protecting the quota share of the poorest countries."
- "The realignment of quota shares must not come at the expense of other EMDCs."
- Reiteration of longstanding call for "a third Chair for Sub-Saharan Africa to enhance the voice and representation of the region," provided it "does not come at the expense of other EMDCs’ Chairs."
- World Bank governance and financial strength:
- Call for a Shareholding Review for the World Bank that upholds the Istanbul Principles to achieve "equitable voting power between developed and developing and transition countries (DTCs)" with an outcome that has "broad support from the membership."
- Call for successful conclusion of the Shareholding Review "by the Spring Meetings of 2018."
- Stress importance of enhancing and safeguarding the financial strength of IBRD and IFC through "capital increases, further balance sheet optimization, and review of financial transfers."
- Urge the WBG to put robust measures in place to ensure "the effective implementation of IDA18 by the time of the mid-term review."
- Representation and diversity:
- Call for strengthened efforts by the IMF and the WBG towards "greater representation of under-represented 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."
Other matters and participants
- Membership changes:
- Welcome Kenya and Ecuador as new members of the Group.
- Chairmanship and next meeting:
- Thank Ethiopia for its Chairmanship and welcome Sri Lanka as incoming Chair; welcome Ghana as the Second Vice-Chair.
- Next meeting of the G-24 Ministers expected to take place on April 19, 2018 in Washington, D.C.
- List of participants (persons who sat at the discussion table) includes ministers and senior officials from African Group, Asian Group, Latin American Group, Observers, Special Guests, G-24 Secretariat, and IMF Secretariat for the G-24. Special Guests included:
- Christine Lagarde, Managing Director, International Monetary Fund.
- Kristalina Georgieva, Chief Executive Officer, World Bank.
Intergovernmental Group of Twenty-Four on International Monetary Affairs and Development — October 12, 2017