Response to High Food, Energy Prices Should Focus on Most Vulnerable
Countries should allow international prices to pass through to domestic prices while protecting households that are most in need.
Trust and the Future of Multilateralism
By David Lipton
May 10, 2018
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Where trust exists and is reciprocated—where there is “confidence” in policies, institutions and systems—economies will achieve more (photo: iStock by Getty Images).
We live in an era of doubts and questions about the global order. We have seen an erosion of trust in bedrock institutions—political parties, national governments, regional authorities, and among international trade and investment partners. […]
Staying Ahead of the Next Crisis: Improving Collaboration with Regional Financing Arrangements
By Petya Koeva Brooks, Pragyan Deb, and Nathan Porter
December 21, 2017
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Festival of lights in Chiang Mai, Thailand: Regional financing arrangements, such as the Chiang Mai Initiative, are playing a growing role in crisis prevention (photo: Tejas Tamobhid PATNAIK/newzulu/Newscom)
A decade ago, regional financing arrangements played a limited role in the global financial safety net. However, the global financial crisis has drastically changed the landscape. Governments have created new arrangements—such as the European Stability Mechanism and the Chiang Mai Initiative Multilateralization—and the resources in the global financial safety net tripled between 2007 and 2016. Because of this evolution, and since the time to repair the roof is when the sun is shining, effective and efficient collaboration between the IMF and regional arrangements has become critical to preventing and mitigating crises in many parts of the world. […]
Strength in Numbers: A Safety Net to Prevent Crises in the Global Economy
December 19, 2017
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Walking on a safety net: countries need insurance in bad economic and financial times (photo: Vivek Prakash/Newscom).
If you are lucky, when the going gets tough, you have a group of people you can rely on to help you through a crisis. Countries are no different—a safety net to help them in bad economic and financial times can make the difference in peoples’ lives. […]
What We Have Seen and Learned 20 Years After the Asian Financial Crisis
July 13, 2017
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A trader in Seoul, South Korea: Asia is the largest contributor to global growth (photo: Ryu Seung-il/Polaris/Newscom)
Asia today is the fastest-growing region in the world, and the largest contributor to global growth. It has six members of the Group of Twenty advanced and emerging economies, and its economic and social achievements are well recognized.
But 20 years ago, July 1997 marked the beginning of the Asian Financial Crisis, when a combination of economic, financial and corporate problems triggered a sharp loss of confidence and capital outflows from the region’s emerging market economies. The crisis began in Thailand on July 2, when the baht’s peg to the dollar was dropped, and eventually spread to Korea, Indonesia and other countries. […]
A Stronger Financial Architecture for Tomorrow’s World
The international monetary system is a topic that encompasses a wide range of issues—reserve currencies, exchange rates, capital flows, and the global financial safety net, to name a few.
Some are of the view that the current system works well enough. I take a less sanguine view. Certainly the world did not end with the crisis that began in 2008 and a recovery is under way. But, it is not the recovery we wanted—it is uneven, unemployment is not really going down, there are widening inequalities, and global imbalances are back.
Reform of the international monetary system may be wide-ranging and complex. But concrete reforms are needed to achieve the kind of well-balanced and sustainable recovery that the world needs, and to help prevent the next crisis.
Global Safety Nets: Crisis Prevention in an Age of Uncertainty
As the global economics crisis abates, there is an emerging consensus that a better global financial safety net is needed to enable countries with good policies to insure against bad outcomes, especially when they are innocent by-standers caught in a financial turmoil. Last week the IMF took another step toward meeting this need by further enhancing its country insurance facilities. Reza Moghadam, head of the IMF’s Strategy, Policy, and Review Department, has authored this blog to coincide with a series of speeches about the reforms, including a scheduled speech at the Peterson Institute for International Economics next Monday. The blog outlines the two major changes: enhancements to our flagship insurance option—the Flexible Credit Line (FCL)—for countries with very strong policies and economic fundamentals; and the establishment of a new Precautionary Credit Line (PCL), which offers a new form of contingent protection for countries with some moderate vulnerabilities.
Listening to and Learning from Asia
In Daejeon, Korea earlier this week, a remarkable event took place that enabled the world to hear the voice of Asia and to learn how the region has been able to show such great resilience in the face of the worst global financial crisis since the 1930s. On July 12 and 13, more than 1,000 officials, economists, bankers, analysts, and media assembled for a conference titled Asia 21: Leading the Way Forward, hosted by the Korean government and the IMF. I personally learned a great deal about Asia’s growing stake in the global economy—and the global economy’s growing stake in Asia. As the world strives to leave the crisis behind, the economic center of gravity is shifting increasingly eastwards, and Asia’s role is more vital than ever before.
Turning up the Volume—Asia’s Voice and Leadership in Global Policymaking
Asia’s voice is getting louder and the IMF—and, indeed, the world—is listening. Blogging from the IMF and government of Korea-sponsored “Asia 21” conference in Daejeon, Korea, IMF Deputy Managing Director Naoyuki Shinohara reflects on the rise of Asia’s voice and leadership in global economic policymaking. The caliber of conference participants and the quality of dialogue speak volumes about the range and depth of expertise and experience in the region. The world needs Asian leadership, not only to sustain global growth, but also to develop policy mechanisms to contend with tomorrow’s economic challenges.
Asia and the IMF: A Closer Engagement
The Korean government and the IMF will jointly host a high-level international conference in Daejeon, Korea in just a few days time. In this blog, Anoop Singh outlines how the conference will be an important part of broader efforts by the Fund to enhance its strategic dialogue and partnership with Asia.