IMF urges boost to development

Christine Lagarde, managing director of the International Monetary Fund (IMF), called on the world to seize the once-in-a-generation opportunity this year to finance development.

The opportunity she referred to includes three upcoming meetings: the UN Conference on Financing for Development to be held in Addis Ababa, Ethiopia, next week; a meeting on the new sustainable development goals during the UN General Assembly in September; and the UN Climate Conference in Paris in December.

Speaking at the Brookings Institution in Washington on Wednesday, Lagarde noted the changing global development landscape.

"Over the past 15 years, most systemically important emerging markets have prospered. Many developing countries have become more integrated into the global economy," she said. "As a result, there has been a rapid expansion of growth, trade and capital flows."

The bad news, she noted, is that growth has not been shared equitably. And poor developing countries have been the hardest hit by conflicts and natural disasters.

Lagarde said that the developing countries that have performed the best in the last 15 years have generally been those that have assumed the greatest ownership to drive their own development. She emphasized the importance of macroeconomic stability, such as keeping inflation moderate and public debt sustainable, as a prerequisite for sustainable growth.

Lagarde also talked about the priority of expanding tax revenues and the importance of using the money efficiently and effectively. Another priority, she said, is to develop the financial sector in a way that supports growth and tackles poverty.

Lagarde announced that the IMF Executive Board agreed to increase access to all concessional facilities and target more concessional resources for the poorest and most vulnerable countries. The IMF will also maintain the interest rate on its Rapid Credit Facility loans - loans to fragile states and countries hit by natural disasters - at zero percent over the longer terms.

She called on all countries to help address these problems.

"This year marks a once-in-a-generation opportunity for global development. The only way to seize it is through partnership. To go far, we must go together," said Lagarde, quoting an African proverb that says, "If you want to go fast, go alone. If you want to go far, go together."

Sean Nolan, deputy director of the IMF's strategy, policy and review department, noted in a Wednesday morning briefing that large developing countries like China and India, though still developing countries, are not counted in their report on enhancing financial safety nets for developing countries released on Wednesday due to the huge scale of their economies. But he noted that China's growth has been vital in driving the growth of the developing world.

Nolan said IMF and the Chinese government are expected to conclude the Article IV consultation, namely IMF's annual consultation with member governments, this month when a list of macroeconomic challenges facing the Chinese economy will be unveiled.

The IMF concluded the consultation with the US on July 6 in which the IMF board of directors noted a range of challenges linked to fiscal health, lackluster business investment and productivity growth and growing inequality.

chenweihua@chinadailyusa.com