As the global economic recovery turns the corner but remains fragile, policymakers should pay more attention to structural reforms that will strengthen confidence and enhance growth capacity, top world finance officials said here on Saturday.
Progress is needed for "new balance" of policies for the "new phase" of global recovery, which means greater focus on the medium term than the short run, and much greater focus on structural reforms, said Singapore Finance Minister Tharman Shanmugaratnam, also chairman of the International Monetary Fund (IMF)'s policy setting committee.
Finance ministers and central bankers attending the Spring Meetings of the IMF and the World Bank "spent a lot of time discussing structural reforms" during the past two days, Tharman said at a news conference following the meeting of the International Monetary and Financial Committee (IMFC).
He noted there are concerns among the world finance officials not only about legacy of the last financial crisis, but about new financial risks, such as rapid rise in corporate leverage which is not matched by growth and investment, and continued volatility in capital flows in emerging market economies.
Tharman also emphasized the importance of the IMF quota and governance reforms, which was stalled as the U.S. Congress failed to pass necessary legislation.
In a communique following the meeting, the 24-member committee voiced deep disappointment at the continued delay in progressing the IMF quota and governance reforms agreed to in 2010, urging the United States to ratify it by the end of this year.
IMF Managing Director Christine Lagarde, who was also present at the news conference, said the IMF is encouraged to see that the European Central Bank has appropriate tools which can be used in due course to deal with persistent low inflation.
In response to a question of geopolitical risks, Lagarde said the Fund was engaged with Ukrainian authorities immediately upon request for assistance and has reached staff-level agreement with the country on necessary measures and financing needs.
She said Ukraine has to fulfill "prior actions" before a bailout program can be presented to the IMF board of governors for approval, hopefully by the end of April.
The IMFC usually meets twice a year, in September or October at the IMF and World Bank Annual Meetings and in March or April at the Spring Meetings. The Committee discusses matters of concern affecting the global economy and also advises the IMF on the direction of its work./.