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IMF meet in Tokyo to address anxiety about growth

11 october 2012, 10:24
0
IMF chief Christine Lagarde. ©AFP
IMF chief Christine Lagarde. ©AFP
Finding ways to boost the slowing global economy and helping poor nations fend off financial shocks will be on the agenda at meetings this week of the International Monetary Fund and World Bank in Tokyo, AFP reports.

Upwards of 15,000 people are expected to converge on the Japanese capital and the city's downtown Tokyo International Forum for a slew of conferences and symposiums.

While the event officially began on Tuesday, the gathering's highlight comes Friday at a plenary meeting with representatives from the Washington-based institutions' 188 member states.

IMF head Christine Lagarde and her World Bank counterpart Jim Yong Kim will air their views on the global economy, which the IMF warns is slowing markedly, and address issues such as stabilising volatile food prices.

The focus will be on "building resilience against crises and giving voices to developing countries", World Bank vice president Cyril Muller said.

Saturday sees a meeting of the International Monetary and Financial Committee, the body that takes many of the operational decisions for the IMF, including its governance.

The Tokyo meetings were originally supposed to usher in governance reforms passed two years ago, amid calls from emerging nations for a greater say in the IMF's affairs.

However, the changes are on ice as the United States has yet to ratify the reforms with the US presidential election looming in November.

Holding the event in Japan, nearly 50 years after it last hosted the meetings in 1964, comes as the nation of 128 million moves past last year's quake-tsunami disaster and nuclear crisis.

It is a "good opportunity for us to show to the world the recovery of our country", said Tadehiko Nakao, vice finance minister for international affairs.

But a blistering spat between the hosts and China over disputed territory is threatening to cast a pall on the meeting, with the Chinese finance minister and central bank chief staying away.

Alongside the annual IMF-World Bank meetings, finance ministers from the G7 industrialised nations -- Britain, Canada, France, Germany, Italy, Japan and the United States -- meet on Thursday in Tokyo.

"We will focus very much on global growth prospects," said a senior US Treasury official.

Japan's new finance minister, Koriki Jojima, who has been in the job just over a week, said he may use the G7 to discuss the strength of the yen.

"The yen's recent one-way rise isn't reflective of Japan's economic fundamentals," Jojima said last week.

With the US Federal Reserve starting a third burst of monetary stimulus known as quantitative easing, other economies fear a repeat of the previous rounds when the dollar eroded in value to the detriment of their exporting firms.

The yen has risen around 50 percent in nominal terms against the dollar over the past five years, squeezing Japan's exporters, who are also having difficulty with the European debt crisis and the rift with China.

But Japan needs cover from fellow G7 nations if is to intervene in currency markets to weaken the yen.

The meetings, held outside the IMF and World Bank's US headquarters every three years, come against the backdrop of the simmering debt crisis in Europe, uncertainty about a US economic recovery and slowing growth in China.

On Tuesday, the IMF slashed its global growth forecast for this year to 3.3 percent, from a July estimate of 3.5 percent.

Growth will only hit 3.6 percent next year -- lower than the 3.9 percent predicted in July -- as even powerful emerging economies like China, India and Brazil hit the brakes, the Fund said.

But that assumption of marginally better growth in 2013 hinges on Europe's leaders getting on top of their crisis soon and US politicians averting a savage austerity plan dubbed the "fiscal cliff", the IMF said.

"Failure to act on either issue would make growth prospects far worse," it warned in its latest World Economic Outlook.

The World Bank, whose new chief was inaugurated in July, will meanwhile focus on ways to help poor countries "strengthen their resistance to natural disasters but also to economic shocks", Muller said.

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