More WB, IMF assistance to emerging markets sought
Credit to Author: MAYVELIN U. CARABALLO, TMT| Date: Mon, 21 Oct 2019 16:28:51 +0000
Multilateral institutions World Bank (WB) and International Monetary Fund (IMF) should adopt bold, out-of-the-box solutions in assisting emerging markets (EMs) like the Philippines amid a changing global economic landscape, Finance Secretary Carlos Dominguez 3rd said.
In his statement during the 102nd meeting of the ministers and governors of the Intergovernmental Group of 24 (G-24) at the IMF headquarters in Washington D.C. on October 15, Dominguez acknowledged that the Philippines is in the middle of rising global uncertainties.
On behalf of the Philippines, he said the country is concerned on the impact of trade tensions, the rise of protectionism, negative interest rate policies, increasingly debilitating effects of climate change, and profoundly disruptive technologies to global economic growth.
“A slowdown in the world’s economic performance will have significant adverse effects on low-income countries and emerging economies,” the Finance chief said.
He added all the work that EMs have put in preparing their economies for competitive trade, improving domestic efficiency, and maintaining the highest standards for fiscal discipline will fail if present trends persist.
“Nothing threatens peace and stability more than economic stagnation, especially one inflicted by growing hostility to free trade,” Dominguez emphasized.
“We have now reached a critical threshold. Beyond this point, we fear seeing a world thrown into economic decline,” he added.
The Department of Finance chief also expressed deep concern over an estimated 47 percent of low-income developing countries being in debt distress.
He added that development aid in the world has also dropped 2.7 percent in 2018, with bilateral official development assistance to least-developed countries falling by 3 percent.
Dominguez also highlighted the Philippines uneasiness “with how relevant states and institutions are responding to the impending global economic crises.”
With this, he said the IMF and WB must “help emerging countries in mitigating, if not reversing, these factors that threaten prospects for global growth.”
The Cabinet official also mentioned that interaction between international institutions and national governments with pivotal junctures throughout history must be adaptive and strong-willed.
“We call on the IMF and the World Bank to re-examine the traditional interventions and discard those that no longer work in favor of bold, out-of-the-box solutions for the institutions to remain in the foreground of the global economic landscape,” he added, noting that this should underpin the concept of the “new multilateralism.”
Dominguez also pointed out the IMF and WB should also remain engaged in supporting high-impact reforms to improve domestic resource mobilization of developing countries, which will aim to sustain growth, boost long-term growth prospects, and increase resilience to economic shocks.
He said they should also closely collaborate with regional multilateral institutions as they have a more intimate understanding and appreciation of the socio-cultural and economic contexts of the member countries in the region and hence, their development needs.
“Institutional reforms must also continue, under their commendable leadership, to promote exemplary practices and efficient coordination in the multilateral system,” the Finance chief stressed.