IMF and World Bank annual meeting in Tokyo Tokyo – Shahir Idriss The annual meetings of the International Monetary Fund (IMF) and the World Bank group started in the Japanese capital, Tokyo. The meeting, which began October 9, will last until October 12, is in unprecedented logistic and security measures indicating the importance of these meetings in the current international financial crisis, especially the Euro-Zone.
Global Economic Prospects (GEP) report showed that the first announcement of the IMF warned that the slowdown in the world economy will deepen by 3.3 percent in 2012, which was confirmed by IMF chief economist Olivier Blanchard.
Blanchard said that the world economic growth is weakened further which will affect the developing nations through export. The worries about the Euro Zone decreased as the IMF says the Europe’s worst period will recover soon and the overall economy is expected to improve by 2013.
A number of ministers of economy and development, central banks’ governors, executive directors of the private sectors and academics participate to the meetings in Tokyo in order to discuss global issues including eliminating poverty, economic development and effective fund aids.
The IMF Deputy Managing Director Nemat Shafik said: “The worst scenario imagined through the general evaluation of the international economy is being unable to avoid the fall of the public finance, especially of the US.”
She warned that in case the Euro Zone does not show commitment, there will be serious risks of a global recession.
Shafik said that according to some statements, the international markets are not going well and that the new markets are also suffering from recession, which is a very bad scenario that can be avoided.
She added: “We are trying to transmit hope in our messages and invite countries to take reforming economic and financial procedures, as well as political decisions to avoid these situations.”
Nemat Shafik also said the Gulf countries will see a 6 percent growth in the current year, and 5.5 percent the next year.
According to Shafik, an IMF team will visit Egypt this month in order to discuss with the government about the Egyptian loan, and that the delayed decision is a result of the importance of reaching a consensual solution.
Shafik told Arabstoday she expects the Arab spring countries to have 2 percent growth, which will not be sufficient to solve the accumulated economic and social issues in Egypt, Tunisia and Yemen, as well as Jordan and Morocco. She excluded Libya because of the different circumstances and preferred to call the Arab spring countries “transition Arab countries.”
She mentioned four main risks in the Middle East which are the current situation in Syria and its implications on the neighbouring countries, the Euro-Zone crisis and its direct impact on Tunisia and Morocco where the growth decreases in North African countries, the increase in the prices of oil and food which means increasing the export value, and the doubts about the political conditions in the democratic transition countries.
Shafik expected $33 billion worth financial needs during the next year in the democratic transition countries, hoping the Arab Gulf countries continue financially supporting the neighbouring countries.
She stressed that the IMF welcomes the political changes in the region and does not foresee any surprises, especially since the investors are waiting and unable to take decisions because of the continuing doubts about the political situation.
Regarding Syria, Shafik said the delay in presenting the latest statistics and reports about the economic situation are because of the IMF’s inability to send a special team to Syria due to the volatile situation.
She added that the Syrian government can’t deal with this issue and as long as the conflict persists in Syria, the IMF will not be able to intervene.
Regarding warning about some of Lebanon’s banks supporting terrorist organisations as well as the impact of the Syrian crisis on Lebanon, Shafik said the IMF is cooperating with Lebanon minimise these risks.
She believes Lebanon did well in the last period reducing its work with the Syrian banks during the crisis.
There is no proof on any current cooperation between both countries and the capitals in the banks are stable, she added, pointing out that Lebanon has the experience of dealing with crises and maintaining financial stability.