Lima, Peru: Obaid Humaid Al Tayer, Minister of State for Financial Affairs, headed the Arab Group at the meeting of the International Monetary and Financial Committee (IMFC) of the Board of Governors of the International Monetary Fund (IMF), on Saturday October 10.
This meeting covered topics around global economic issues, such as global economic prospects, the Fund’s future plans to develop mechanisms to face economic challenges and support the global economic growth.
The Arab Group includes the UAE, Bahrain, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Maldives, Oman, Qatar, Syria and Yemen. Obaid Humaid Al Tayer’s speech covered several elements; which were decided upon after discussions between members of the Arab Group on global economic issues and the IMF’s role in supporting the development process of Arab countries.
Al Tayer stated that the global economic recovery is still unfolding at an uneven pace, complicated by rising uncertainty and the recent volatility in financial markets compared to six month earlier. The Fund’s analytical work highlights a number of downside risks to global growth and to financial stability. The recent volatility in financial markets has raised pressures on exchange rates and prompted outflows from several emerging markets in developing country markets.
Policy trade-offs
Al Tayer added that the Arab Group agrees with the assessment in the Managing Director’s Global Policy Agenda that many countries are facing increasingly difficult policy trade-offs with respect to demand-enhancing measures and policies to safeguard financial stability.
He added that a growth rebound is expected in many emerging market economic (EMEs) in 2016 while a further growth slowdown is expected in China and in some Latin American countries; while stressing the need to work on minimising risks of economic activity such as low inflation and weak demand for long periods, which is of high priority.
Al Tayer said the group strongly concurs with the assessment of a favourable but uncertain growth outlook given the exogenous shocks and policy challenges. For most oil importers in our constituency, average growth is projected to rise in 2016 on the back of confidence gains, higher demand from trading partners, and structural reforms that are nurturing competitiveness and foreign direct investment.
Al Tayer highlighted that a number of oil importing and exporting countries have seized the opportunity of lower oil prices to step up energy subsidy reforms and improve targeting, while some have used available fiscal space for development related spending.
Regional support
Al Tayer mentioned that the Arab Group encourages the Fund to deepen its support for Arab Countries in Transition (ACTs) and mobilise other partners, noting that a large share of financial support has been provided from within the region. A number of the Arab countries are facing heightened demands on domestic resources from the influx of refugees and internally displaced populations.
He also values the timely provision of technical assistance to countries which helps underpin crucial policy reforms, as well as the Fund’s contribution to the new Social Development Goals, financing for development and addressing climate change to ensure more sustainable development.
Obaid Humaid Al Tayer concluded on the subject of IMF quota reform, emphasising again that such reforms, including any interim steps, should ensure a fair representation of Arab countries. In particular, shifts in quota shares in favour of dynamic emerging and developing countries should not come at the expenses of other emerging markets and developing countries.
