Lesley Wroughton Washington
FINANCE and development ministers from around the world will warn this week of considerable downside risks to the global economy, and call for an effort to protect the world’s poor, according to the draft of a communiqué they are planning to issue after a meeting on Saturday.
With Europe flirting with deflation, Japan not far from recession and slowing growth in China, the second-biggest economy, there are worries that the recovery from the deep 2007 to 2009 crisis is losing traction.
“The global economy remains on a cautious watch and is subject to considerable downside risks that could dent global growth and confidence,” said the draft of the communiqué prepared for release by the joint International Monetary Fund (IMF) and World Bank development committee.
“The path to economic growth, job creation and shared prosperity will require a sustained multilateral effort to protect the poorest and most vulnerable.”
A copy of the draft, which was obtained by Reuters, praised the World Bank for its response to the Ebola outbreak that has killed more than 3 400 people in west Africa and called for quick and co-ordinated support to mitigate the impact of the disease.
The statement said 20 percent of the impoverished countries receiving aid from the World Bank’s fund for the poorest have not shown per capita output growth since 2000 and are particularly in danger of being hit hard if the global recovery founders.
It urged the bank and the IMF to monitor low-income countries’ vulnerability to shocks, including the dangers their public debts might pose.
It also called for similar short- and medium-term help from the World Bank and IMF for north Africa and the Middle East, especially countries in conflict. The World Bank was also encouraged to increase private investment opportunities in nations falling into conflict.
On other topics, the draft communiqué called for the two leading multilateral agencies, which are holding their annual meetings in Washington this week, to expand their emphasis on gender equality and climate change, while helping countries with energy supplies and infrastructure investment.
The development committee acts as a steering group on development issues for both the IMF and World Bank. – Reuters