WASHINGTON: Global financial leaders on Saturday pledged to “resist all forms of protectionism” and redoubled their commitments to reinvigorate global trade as a critical measure to boost subdued global growth.
“The global economy has benefited tremendously from globalization and technological change. However, the outlook is increasingly threatened by inward-looking policies, including protectionism, and stalled reforms,” the International Monetary Fund (IMF)’s 24-member policy setting committee said in a communique during the annual meetings of the IMF and the World Bank.
“We reaffirm our commitment to communicate policy stances clearly and resist all forms of protectionism. We will also redouble our commitment to maintain economic openness and reinvigorate global trade as a critical means to boost global growth,” the International Monetary and Financial Committee (IMFC) said.
The IMFC also warned that the persistently low growth has exposed underlying structural weaknesses, and risks further dampening potential growth and prospects for inclusiveness.
Acknowledging that uncertainty and downside risks for the global economy “are elevated”, financial officials renewed their pledge to “use all policy tools-structural reforms, fiscal and monetary policies-both individually and collectively” to lift subdued global growth, the communique said.
In order to provide adequate time to “build the necessary broad consensus” , the IMFC supported IMF Managing Director Christine Lagarde’s proposal to reset the timetable for completing 15th general review of quotas by the spring meetings of 2019 and no later than the annual meetings of 2019.
“We are committed to concluding the 15th General Review of Quotas and agreeing on a new quota formula as a basis for a realignment of quota shares to result in increased shares for dynamic economies in line with their relative positions in the world economy and hence likely in the share of emerging market and developing countries as a whole,” the communique said.
The IMFC also welcomed the recent inclusion of Chinese currency renminbi (RMB) into the IMF’s Special Drawing Right (SDR) basket, and looked forward to the forthcoming examination of the possible broader use of the SDR.
The SDR is an international reserve asset created by the IMF in 1969 to supplement its member countries’ official reserves. It can be exchanged among governments for freely usable currencies in times of need.