Africa Conference in Tanzania to Share Lessons from Economic Successes
President Jakaya Kikwete of Tanzania and IMF Managing Director Dominique Strauss-Kahn will host a high-level international conference in Dar es Salaam on March 10–11, 2009, to discuss how Africa can meet the challenge of sustaining and building on its recent economic successes.
The conference—built around the theme “Changes: Successful Partnerships for Africa’s Growth Challenge”—will provide both senior policymakers and stakeholders an opportunity “to learn from successful economic reforms in Africa and elaborate on the evolving roles of private sector and official partners—particularly the IMF—in supporting African countries,” Strauss-Kahn said.
The conference will bring together more than 300 high-level participants—including finance ministers, central bankers, and representatives from partner countries, global and regional private sectors, civil society, media, academics, and private foundations.
Forceful Action Needed to Contain Crisis
“Time is of the essence,” said George Soros, chairman of Soros Fund Management. “Right now we are teetering on the brink of panic brought about by the failure of the authorities to anticipate and react. They have consistently been behind the curve. Now they have to get ahead of it.”
Soros was one of five leading financial market players participating on a panel to discuss “Turmoil in Global Financial Markets: Prospects and Policies” during the IMF-World Bank Annual Meetings.
Soros and the other financial experts at the October 12 seminar stressed that any policy package should be coordinated and comprehensive.
IMF to Sharpen Assessment of Risks Facing Countries
The IMF has announced a new set of priorities for its surveillance of the global and national economies. The institution will sharpen its risk analysis and focus more on linkages between the financial sector and the real economy as well as cross-country analysis.
The IMF’s Executive Board agreed the new priorities as part of a major review of the IMF’s surveillance work. The new Statement of Surveillance Priorities, which lays out medium-term objectives and priorities in surveillance, was announced as the world was rocked by an increasingly virulent financial crisis.
Economic priorities identified include resolving financial market distress, strengthening the global financial system, adjusting to sharp changes in commodity prices, and promoting the orderly resolution of global imbalances.
IMF Launches Lending Review
The IMF has launched a review of its financing role in member countries, to make sure it has the right instruments to meet countries’ needs in a world characterized by growing—and increasingly complex—cross-border financial flows.
“Although the Fund has a record of adapting to change, the truth is that our lending instruments are based on a model that may no longer be suited to the needs of a large part of the membership,” Managing Director Dominique Strauss-Kahn told IMF Executive Directors at the Board’s initial discussion of its financing role on September 22.
For the coming year, the study will focus on five broad areas: developing an analytical framework for the IMF’s lending; advancing work on a new crisis prevention instrument; reviewing access limits and financing terms for using Fund resources; re-examining the use of conditionality; and considering lending instruments for low-income members.
Making Fiscal Stimulus Effective During Downturns
A new IMF study finds that although fiscal policy is a potentially valuable tool for stimulating growth, it can easily do more harm than good if it is not implemented well. Tax cuts or spending increases that make debt unsustainable are likely to cause output to fall, not rise.
The study, published in the October 2008 World Economic Outlook, shows that a key challenge to policymakers is to make sure that discretionary fiscal policy measures—that is, changes in spending and taxation—are delivered quickly and that they do not cause concerns about future debt sustainability
For the full text of the study, see www.imf.org/external/pubs/ft/weo/2008/02/index.htm.
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