By Peter OBIORA InvestAdvocate
Lagos (INVESTADVOCATE)-The International Monetary Fund (IMF) said on Monday real per capita Gross Domestic Product (GDP) in non-fragile low-income countries has increased by almost 70 percent, Min Zhu, deputy managing director (DMD) of the Fund disclosed this in his address at the IMF, UN Conference on Financing for Development, Addis Ababa, Ethiopia.
“At the same time, however—and as we all recognise—fragile countries have tragically fallen behind. Across the world, the scourges of inequality and injustice remain: over a billion people still live in extreme poverty,” Zhu said.
According to the IMF chief, to move further ahead on the path of sustainable, inclusive growth the world must be united and be guided by three (3) key principles: partnership, commitment, and flexibility.
In terms of partnership, Zhu advised all countries—developing, emerging, advanced to work together, andwith civil society, the private sector, and international organisations.
“We know that developing countries are best placed to drive their own development. We know that sound macroeconomic policies are essential to help mobilise resources and use them efficiently and effectively,” he added.
He noted that developing countries cannot do it alone; but work with the international community who has a responsibility to create an enabling environment for sustainable growth and development—working hand-in-hand with the developing countries themselves. “Together—through partnership—we are greater than the sum of our parts,” he affirmed.
Zhu says for the second principle, commitment to be effective, partners must all demonstrate sustained commitment—not only for 2015, but for a generation.
“Speaking for the IMF—with our global membership and mandate to promote growth and stability—we are committed to help turn the new Accord into action. As well as enhancing our core functions of policy advice and capacity building, we will also strengthen our lending to developing countries—in three key ways,” he said
The three (3) areas include expanding access to all its concessional facilities by a full 50 percent, target that concessional financing even more on the poorest and most vulnerable countries and maintaining for the longer term the zero interest rate on the Fund’s Rapid Credit Facility loans—for fragile states and countries hit by natural disasters.
“In these very concrete ways, the IMF is strengthening the global safety net for low-income countries. And the IMF is strengthening its commitment,” he said.
The third principle on the path of sustainable, inclusive growth Zhu said there is need for flexibility. “What challenges await? Some—like demographics, technology, and the environment—are well known. But their future ramifications are not,” he noted.
He advised that the world need to be ready to adapt to new challenges as they arise. “I can tell you that the IMF is already moving to address what we see as some of the major forces affecting our future: fighting excessive inequality; promoting women’s empowerment; mitigating climate change—and, of course, eliminating absolute poverty. Going forward, you will see these issues feature increasingly in the work of an increasingly flexible Fund,” Zhu affirmed.
