Finance ministers to warn of global economic risks in communique

WASHINGTON — Finance and development ministers from around the world will this week warn of considerable downside risks to the global economy and call for an effort to protect the world’s poor, said the draft of a communique they plan to issue.

With Europe flirting with deflation, Japan not far from recession and a slowing economy in China, the world’s No 2 economy, there are worries the recovery from the deep 2007-2009 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 a communique prepared for release by the joint International Monetary Fund-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 coordinated support to mitigate its impact.

The statement said 20 per cent 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 International Monetary Fund (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 communique draft 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, which will hold their annual board of governors meetings in Washington from Oct 10 to 12.

Meanwhile, Singapore’s Deputy Prime Minister Tharman Shanmugaratnam will be in Washington from Oct 8 to 12 to chair the meetings of the International Monetary and Financial Committee (IMFC), the body that sets policy direction for the IMF.

Mr Tharman, who is also Minister for Finance, has been chairman of IMFC since 2011. A joint statement by the Ministry of Finance, Monetary Authority of Singapore and the Singapore Workforce Development Agency said the IMFC meetings will discuss action to ensure a more robust and durable global recovery and foster economic resilience. AGENCIES