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IMF Survey Vol.31, No.18 October 2002
Article

Closing press conference: What is wanted is better globalization, not less globalization

Author(s):
International Monetary Fund. External Relations Dept.
Published Date:
January 2002
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Macki: Our discussion covered a wide range of issues from poverty reduction to the global economic uncertainties to the ways the IMF and the Bank can continue assisting members to strengthen their economies. We emphasized that all of us must continue to work as partners if we are to make progress toward achieving the Millennium Development Goals.

Köhler: The meetings have been very productive and successful. I was encouraged because there was no doom and gloom, but some realistic confidence that the recovery will continue.

There is a broad consensus coming that globalization has created unprecedented opportunities to improve the wealth of nations, but members are also aware of the challenges and risks. They don’t want less, they want better globalization.

What I took from these discussions is that the IMF is strengthened by its members. It has to listen, learn from dialogue and experience, and adapt to new questions and challenges.

Wolfensohn: This has been a very positive meeting; I share Horst’s sense of something that is in between wild optimism and wild pessimism. I hope that you will all go out of here with a sense of enthusiasm. But we have a number of things to do. We should stop philosophizing and actually get on with our respective tasks and reach out and try to do a better job in working with civil society and the private sector.

Question: Mr. Köhler, now that you’ve had the meetings and talked to a lot of Japanese officials, what is your assessment of the Japanese economy and the Bank of Japan’s proposal to buy shares?

Köhler: It was very useful that the Japanese finance minister and Governor Masaru Hayami made the presentation and informed colleagues and the IMFC about the discussion in Japan. After this, I have a bit more positive assessment of this decision to buy stocks. I see it now as part of a more comprehensive package of measures and a clear awareness that they have to do something to get rid of nonperforming loans. It is also clear that they are working on tax reform that could have a positive impact on investment and demand. I am encouraged after these meetings, and I expect Prime Minister Koizumi to outline the full package in the coming weeks.

Question: What effect have the U.S. corporate scandals had on the World Bank and the IMF and its lending policies?

Köhler: It has had a great effect. We have had quite an intensive discussion about the need to improve corporate governance. There has been swift action, including legislative action, by the U.S. administration, and there was also agreement that, for instance, accounting rules should be harmonized at the international level. The IMF is, together with the World Bank, considering how we work further with our members on defining a standard and code regarding corporate governance that we would then be able to discuss with all our membership. So there is momentum to pursue it all over our membership.

Question: Representatives from two major emerging markets expressed doubts about the establishment of collective action clauses and an SDRM.

Köhler: I am not surprised there is some skepticism over the details. The emerging market countries could fear that this has an additional cost. But I take from these discussions that there is a broad understanding about the absolute need to have a better mechanism for a timely, orderly, less costly way to restructure unsustainable debt. We will do this very carefully, very professionally. We will have further talks with emerging market country representatives, with the private sector, with experts. It is a further work process, but I do think it is a kind of breakthrough here—a recognition that there is a gap in the international financial architecture and the international community is well advised to close it.

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