The IMFC recalls that on March 2, the United Nations General Assembly
by a majority of 141 countries adopted the resolution ES-11/1
“Aggression against Ukraine” 1 that “deplores in the strongest terms the aggression by the Russian
Federation against Ukraine in violation of Article 2 (4) of the
Charter” and “demands that the Russian Federation immediately cease its
use of force against Ukraine”. Thirty-five countries abstained from the
vote; five countries voted against the resolution; some countries
expressed no position.
The IMFC recognizes that Russia’s war against Ukraine has massive
humanitarian consequences and detrimental repercussions for the global
economy through direct and indirect channels. The IMFC calls for a
speedy resolution through diplomatic channels, including “political
dialogue, negotiations, mediation and other peaceful means”,2 and
for greater international cooperation and strengthened multilateralism
to prevent fragmentation and safeguard global economic integration.
****
The IMFC expresses its deep appreciation to Prime Minister Magdalena
Andersson for her leadership as IMFC Chair and welcomes Vice President
Nadia Calviño as the new Chair.
1. The recovery of the global economy continues but has slowed down owing
to new Covid-19 variants and is now facing a major setback from the war
against Ukraine and its ramifications, which will amplify existing
challenges. The resulting surge in energy and food prices has added to
inflationary pressures, while supply disruptions have further intensified,
and financial markets and capital flows are exhibiting increased
volatility. Against the background of unprecedented uncertainties, rising
interest rates, and record high global debt, the spillovers through
commodity markets, trade, and financial channels could exacerbate existing
vulnerabilities. Potential risks of debt distress, together with refugee
flows, increased food insecurity, and inequality could add to social
pressures. At the same time, climate change, together with other shared
challenges—such as energy security, affordability, and sustainability—are
becoming more pressing and require urgent attention.
2. In this context, strong domestic policies and international cooperation
are needed more than ever to preserve the global economic recovery and
safeguard macroeconomic stability, while battling the pandemic and, where
necessary, mitigating the impact of energy and food price increases on the
most vulnerable groups. We welcome the Managing Director’s call for urgent
action on food security, in collaboration with multilateral and bilateral
donors, to avert a food crisis by supporting the most vulnerable countries.
We will continue to prioritize health spending and we will provide
well-targeted support for vulnerable groups, including refugees and those
affected by energy and food price spikes, while preserving long-term fiscal
sustainability, including, where applicable, by bolstering medium-term
fiscal frameworks. Central banks are closely monitoring the impact of price
pressures on inflation expectations and will continue to appropriately
calibrate the pace of monetary policy tightening in a data-dependent and
clearly communicated manner, ensuring that inflation expectations remain
well anchored, while being mindful to safeguard the recovery and limit
negative cross-country spillovers. We will also continue to monitor and, if
necessary, tackle financial vulnerabilities and risks to financial
stability, including through targeted macroprudential measures and, if
needed, other complementary policies. We will intensify our joint efforts
to boost equitable access to a comprehensive COVID-19 toolkit, including
vaccines, tests, treatments, and enhanced in-country delivery in developing
countries, and remove relevant supply and financing constraints to overcome
the pandemic, including by boosting local production of vaccines. We will
take action to provide financial assistance to countries in need,
particularly those affected by the current circumstances, while supporting
their efforts to address heightened debt challenges, and strengthening debt
transparency practices by both debtors and creditors, public and private.
3. Against the backdrop of current uncertainties, we will intensify our
efforts to achieve the goal of a more resilient, sustainable, and inclusive
global economy, while remaining fully committed to fostering multilateral
cooperation. We will strengthen pandemic prevention, preparedness and
response to future infectious diseases. We also reiterate our strong
commitment to further accelerate climate action in line with the Paris
Agreement, taking into account country specific factors, and look forward
to strong ambition for COP27, including enhanced action on adaptation and
resilience. We recognize that timely, smooth, and just transitions to net
zero will be critical for efforts towards increasing energy security and
global resilience to current instability and future shocks. We will utilize
policy mixes based on all effective tools, ranging from fiscal, market, and
regulatory actions, including efficient policy instruments to reduce
greenhouse gas emissions, while protecting the most vulnerable groups. We
will ensure that the digital transformation process plays a key role in
making our economies more resilient and inclusive, being mindful of data
protection, data sharing, and interoperability and portability. We will
ensure that the design of legal and regulatory frameworks for crypto assets
can better protect against financial stability and integrity risks, while
fostering innovation. We reaffirm our commitments on exchange rates,
excessive global imbalances, and governance, and our statement on the
rules-based trading system, as made in April 2021.
4. We welcome the Managing Director’s Global Policy Agenda. In the context
of current stress in the macroeconomic circumstances and outlook, we look
forward to the IMF’s swift and vital real-time and granular support to
members through its tailored cutting-edge policy advice, timely financial
support, and targeted capacity development in close and effective
collaboration with international partners.
5. We support the IMF’s increased surveillance focus on risk analysis and
contingent policy advice; and its efforts to continue strengthening
multilateral surveillance and analytical work on pressing policy issues,
including on inflation and its drivers, policy mixes and international
spillovers, financial, external, and corporate sector vulnerabilities,
fiscal adjustment, scarring from the pandemic, and inequality. We welcome
the IMF’s recently completed Review of the Institutional View on capital
flows and look forward to continued collaboration with other international
organizations on capital flow issues and continued work on the Integrated
Policy Framework. We look forward to the IMF’s guidelines on strengthening
the assessment of debt vulnerabilities and risks with the new debt
sustainability framework for market-access countries and the work on the
Multi-Pronged Approach. We look forward to the upcoming review of the IMF’s
Framework for Enhanced Fund Engagement on Governance.
6. The IMF has an important role in providing continued financial support
with adequate safeguards through its facilities to members experiencing
balance of payments needs, including countries that are particularly
affected by the current circumstances, such as those that are at high risk
from energy price increases and food insecurity. We welcome the progress on
voluntary channeling of SDRs and call for further contributions. In
particular, we welcome the recent decision to establish the Resilience and
Sustainability Trust (RST). The Trust aims to help low-income and eligible
small states and middle-income countries address longer-term structural
challenges that pose macroeconomic risks, including climate change and
pandemics. We reaffirm our support for broad-based voluntary contributions
in SDR or freely usable currencies, particularly from members with strong
external positions according to their domestic processes, to enable the
RST’s full operationalization later this year, while furthering IMF
collaboration with the World Bank and other relevant multilateral
institutions. We welcome our members’ commitment to treat the RST as a
preferred creditor, consistent with all IMF lending. We also urge members,
including through broader voluntary participation, to cover the remaining
resources to meet the total amount being sought for loans and subsidies for
the PRGT, helping ensure its self-sustainability, as well as to replenish
the Catastrophe Containment and Relief Trust to provide debt service relief
in the event of further shocks. We welcome the establishment of the IMF’s
Multi-Donor Administered Account to facilitate bilateral financial
assistance to Ukraine and will continue to work closely, in coordination
with international partners, to support Ukraine in meeting its external
financing needs, both immediate and for the post-war reconstruction. We
welcome the G20’s commitment to step up efforts to implement the Common
Framework for debt treatments, which is also agreed by the Paris Club, in a
timely, orderly, and coordinated manner, giving more certainty to debtor
countries, jointly supported by the IMF and the World Bank. We encourage
efforts to make progress in the cases of those countries that have
requested a debt treatment under the Common Framework. More generally, we
also support the IMF’s broad agenda on debt sustainability, transparency,
and restructuring. We also highlight the IMF’s work to help address high
and rising debt vulnerabilities.
7. We welcome the IMF stepping up its work as described—in line with its
mandate and in continued effective collaboration with partners—in the new
strategies on climate, on digital money and its implications for policies
and the international monetary system, and on fragile and conflict-affected
states, as well as the deepening of its macro-financial bilateral
surveillance, mainstreaming of gender issues, and its enhanced engagement
on policy issues affecting inequality. We reiterate the IMF’s important
role in responding to members’ diverse needs for guidance on the
macroeconomic and financial implications of climate change issues and on
effective policy responses, including as a forum for dialogue.
8. We support the IMF’s efforts to further integrate its capacity
development with its surveillance and lending activities, while remaining
agile to support members in implementing crisis-related responses,
addressing vulnerabilities, and strengthening institutional capacity. We
welcome the Fund’s country-tailored approach to capacity development and
support it in securing appropriate financing.
9. We reaffirm our commitment to a strong, quota-based, and adequately
resourced IMF at the center of the global financial safety net. We remain
committed to revisiting the adequacy of quotas and will continue the
process of IMF governance reform under the 16th General Review
of Quotas, including a new quota formula as a guide, by December 15, 2023.
We welcome the second progress report to the Board of Governors and will
build on recent constructive discussions to make further progress by the
time of our next meeting.
10. We support ongoing modernization projects in the IMF and call for
further progress on diversity. We support increasing gender diversity in
the Executive Board. We agree on the importance of strong institutional
safeguards and look forward to the outcome and the next steps of the review
by the Executive Board and management on Institutional Safeguards.
11. Our next meeting is expected to be held on October 13, 2022.