IMF Youth Dialog Summary of the Roundtable Discussion Held at the University of JordanRoundtable Summary
March 9, 2010
A group of 20 students from the University of Jordan’s faculty of economics and political science discussed economic priorities for their country, lessons from the global financial crisis, and the role that the IMF should have in their country. Reducing unemployment emerged as a major priority for the students. They called upon the authorities to ensure economic stability and encourage investment to promote growth and job creation. They asked the IMF to help Jordan by providing technical advice and to engage in discussions more widely with all stakeholders across the country. The global crisis had clear implications for reforms (including regulatory reforms) and for early warning systems.
The message from students at the University of Jordan was that macroeconomic stability is an essential requirement to solve the country’s unemployment problem. Economic security, low and stable inflation, sound public sector finances, and an investor-friendly environment are necessary if Jordan is to attract investment, particularly foreign direct investment, and acquire a vibrant small and medium enterprise sector that could absorb the large labor supply. Upgrading the country’s infrastructure and easing access to credit were also important for investment to flourish.
“We lack natural resources,” argued one student, “which means we need to focus on investing in our human resources.” One way to do that is through education—upgrading programs and providing courses of study in line with labor market needs. Another suggestion was to create job centers to facilitate job search and help clear the labor market: these centers would intermediate between job seekers and employers by providing information to each group on available supply in the other group.
Many students viewed tourism as a cornerstone of the Jordanian economy. They thought the government should increase investment and marketing in that sector to allow it to reach its full potential. “There is no reason why Egypt should have more than double the number of tourists compared to Jordan, as was the case last year,” noted another student. “Touristic sites are abundant in Jordan as well; we just need to promote them better.”
Given Jordan’s economic needs, how could the IMF best help the country? Students welcomed the advice provided by IMF experts and stressed the benefit of such advice, given that it is based not only on the technical ability of the staff, but also on the knowledge of what works and what doesn’t from the experience of other countries. Several students asked for more research and studies focused specifically on Jordan, and called upon the IMF to pay greater attention to the country’s social needs and to the financial sector.
One student welcomed the quota reform recently agreed by the IMF member countries, but noted it was not enough. A greater shift in voice towards developing countries was needed to ensure their buy-in with respect to IMF advice and to instill greater attention to the needs of developing countries within the institution. This concern echoed that of several students from the University of Jordan, as well as from other universities in the region, that the IMF is advancing the interests of developed countries, which are sometimes at odds with those of its other members.
Turning to the global financial crisis, students noted that it uncovered important flaws in the international financial system. In their view, the world and the IMF were not well prepared to face such a crisis; this is why they are now striving to undertake the reforms that will hopefully help address the next crisis more successfully, or even avert it. “To derive the lessons from the crisis, we need to figure out its causes,” noted one student. “And the main cause was too much credit in bad conditions.” “The crisis was primarily a moral crisis” said another student, and showed that “the invisible hand is crippled.” The main lesson, therefore, is the need for better regulation—of credit, in particular, but also of the financial sector and corporate governance more generally.
Some students suggested that reduced integration and increased reliance on domestic investment would have mitigated the pain from the crisis and limited the number of affected countries. Others, however, refused the motion to combat globalization. One student insisted that “we live in a connected system, and no part can survive without the other.” Barriers to the flow of goods and ideas should continue to be lowered, but adequate safeguards need to be put in place, and countries need to be prepared to face crises should they happen. In this respect, it is essential to devise an effective early warnings system. Had the countries (and the IMF) seen the crisis coming, they may have been able to quickly implement policy responses to deflect it, or at least alleviate its impact.