Global Policy Forum

IMF, World Bank Set to Discuss Global Economic Challenges

World leaders meeting in Washington will discuss the spike in world food prices. World Bank President Robert Zoellick has said that greater transparency and early warning systems are necessary to mitigate the harmful effects of price shocks. But this analysis seems to ignore speculation in global financial and commodity markets which, coupled with the loose monetary policies of leading central banks, have stoked inflation and placed upward pressure on prices. Any future program that seeks to dampen price shocks should include an anti-speculative component.

By Mackenzie Babb
April 13, 2011

Economic ministers and finance leaders from around the globe are gathering in Washington to attend the annual spring meetings for the International Monetary Fund (IMF) and World Bank April 15-17.

As the world continues to recover from the financial and economic crisis, World Bank President Robert Zoellick said, leaders are set to discuss other challenges, such as high prices for food and fuel, political unrest across the Middle East and the risks of rising inflation in emerging markets.

"This is not a time for complacency or for turning our backs on international cooperation. The world needs multilateralism that works," Zoellick said in his opening statement for the spring meeting teleconference April 12.

He said the international community needs to better address future crises through enhanced early warning systems, improved prevention measures and more effective action. Zoellick highlighted the World Bank's reaction to events across the Middle East during the past three months as "a catalyst for examining how best to push economic and governance reforms in support of successful development."

He said World Bank teams are working throughout the region to address key challenges and to support reforms such as increased transparency in government, freedom of association and access to information, and training for unemployed workers. Zoellick highlighted unemployment as a major issue in the Middle East, and said the World Bank has called for a meeting of multilateral development banks in April to discuss how best to support the region. Zoellick said policy changes "will be as important as money" for recovery.

While economists often downplay the importance of creating short-term jobs, Zoellick said, there are ways to promote job creation quickly while simultaneously supporting longer-term job growth. He emphasized the importance of "devising ways to get people to work, to give them an ability to contribute to their families and their countries."

He also addressed the record price levels for food around the world, a problem compounded by serious price volatility. He said that right now, there are nearly 1 billion people around the globe who are undernourished, a number currently growing by about 68 people per minute.

The World Bank has outlined an action plan to protect the poor and vulnerable from food price volatility while boosting production to provide better food security. Zoellick said the World Bank is calling on participants in the spring meetings to implement changes such as increasing transparency about food stocks, exempting humanitarian aid from export bans and placing limited humanitarian food stocks in places at high risk for hunger with the help of the United Nations World Food Programme.

He highlighted the World Bank's continued commitment to agricultural production and to reaching out to find new development partners.

In addition to addressing these issues, Zoellick said, leaders at the spring meetings are set to discuss efforts to create widespread financial stability and how best to support emerging markets.

The meetings officially begin April 15, but events kicked off April 11 with the release of the IMF's World Economic Outlook, which reported analyses and projections of economic developments at the global level for major countries and regions around the world. The Group of 20 finance ministers are set to hold a working dinner April 14 followed by a longer session April 15 ahead of the larger group meetings. A total of 187 members are expected to participate in the spring meetings.

Zoellick is scheduled to speak again April 14, followed by remarks from IMF Managing Director Dominique Strauss-Kahn.


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