April 21, 2012 / 6:35 PM / in 6 years

RPT-TEXT-IMFC communique after meeting in Washington

WASHINGTON, April 21 (Reuters) - Below is the text of the
communique from the meeting of the International Monetary and
Financial Committee in Washington. The IMFC, with 24 members,
serves as the International Monetary Fund's steering committee.	
    The global economy is recovering gradually. Since we last
met, important policy actions have been taken in the euro area,
both at the national and regional levels, including through an
enhancement of the European firewall. Economic indicators in the
United States have improved. Emerging market and developing
countries on the whole remain a source of strength for the world
economy. But more remains to be done. The outlook remains one of
moderate growth globally, and risks remain high. We will
continue to act collectively to restore confidence, rekindle
growth, and create jobs.	
 * In advanced economies, further actions are needed in many
countries to achieve credible fiscal consolidation and
government debt reduction, while avoiding excessively
contractionary fiscal policies. Where conditions permit,
automatic fiscal stabilizers should be allowed to operate. In
all countries, viable medium-term consolidation strategies
should be in place. Monetary policy will need to remain
accommodative as long as inflation prospects remain anchored and
weak growth persists. The potential impact and cross-border
spillovers of such a policy should be closely monitored.
Structural reforms to boost potential output and employment are
critical, and need further momentum. In the euro area, continued
progress on ensuring debt sustainability, securing financial
stability, and undertaking bold structural reforms will be
crucial to boosting confidence and productivity, facilitating
rebalancing within the monetary union, and promoting strong and
balanced growth.	
    * Emerging market and developing countries continue to grow,
while facing spillovers from the advanced economies. Ongoing
stresses in Europe, high and volatile oil and commodity prices,
and large and volatile capital flows pose significant policy
challenges. This requires the right balance between attenuating
downside risks with appropriate policies to support growth and
curbing inflationary pressures. Rapid credit growth in some
economies warrants attention. Low-income countries should
preserve macroeconomic stability and debt sustainability while
pursuing their development objectives and addressing
infrastructure gaps to enhance their growth potential. We call
on the membership to complete the low-income-country financing
package under the Poverty Reduction and Growth Trust through
2014-15, and will consider proposals to ensure its long-term
sustainability, by our 2012 Annual Meetings. We call on the Fund
to support the efforts of Arab countries in transition with
policy advice, technical assistance, and appropriate financing
at this historic time; we support these efforts, including
through collaboration with the Deauville Partnership, to
facilitate economic transition while safeguarding financial
stability. We encourage the Fund to enhance attention to small
states, especially those that are most vulnerable to external
    * Global collaboration is key to sustaining growth
everywhere and ensuring stability. Further actions are needed to
build on the progress made to date in reducing global
imbalances. In general, deficit countries need to continue with
their efforts to strengthen national saving while enhancing
export competitiveness, and surplus countries need to continue
to implement structural reforms to strengthen domestic demand,
supported by continued efforts that achieve greater exchange
rate flexibility. It is also crucial to press ahead
cooperatively in strengthening financial systems by completing
and implementing the agreed international financial reform
agenda in an internationally consistent and non-discriminatory
manner, including in the area of Basel standards, derivatives,
and cross-border resolution of financial institutions. In
addition, fostering and protecting investment is crucial for the
global recovery. We reaffirm our collective responsibility to
avoid protectionism in all its forms.	
The next Consolidated Multilateral Surveillance Report provides
an opportunity to assess progress in our efforts. 	
We will ensure that the IMF has the tools and resources to
effectively support the membership and welcome the directions in
the Managing Director's Action Plan.	
    *Resources. We remain committed to take the necessary
actions to secure global financial stability. We welcome the
euro area members' decisions in March to strengthen European
firewalls as part of broader reform efforts and the availability
of central bank swap lines. Together with the G-20, we have
reached agreement to enhance IMF resources for crisis prevention
and resolution. This is the result of a broad international
cooperative effort that includes a significant number of
countries. There are firm commitments to increase resources made
available to the IMF by over $430 billion in addition to the
quota increase under the 2010 reform. These resources will be
available for the whole membership of the IMF, and not earmarked
for any particular region. The resources would be channelled
through temporary bilateral loans and note purchase agreements
to the IMF's General Resources Account. Should it become
necessary to use these resources, adequate risk mitigation
features, conditionality, and adequate burden sharing among
official creditors would apply, as approved by the IMF Board.
This effort, together with the national and regional structural,
fiscal, and monetary actions that have been put in place in the
past months, shows the commitment of the international community
to safeguard global financial stability and put the global
economic recovery on a sounder footing.	
    * Governance. We reaffirm the urgency of making the 2010
quota and governance reforms effective by the 2012 Annual
Meetings, to enhance the Fund's legitimacy and credibility. We
urge members to ratify these reforms expeditiously and call on
the Fund to monitor progress transparently and more frequently.
We look forward to an agreement, by January 2013, on a simple
and transparent quota formula that better reflects members'
relative positions in the world economy. We reaffirm our
commitment to complete the Fifteenth General Review of Quotas by
January 2014. Any realignment is expected to result in increases
in the quota shares of 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.
Steps shall be taken to protect the voice and representation of
the poorest members. We call on the Fund with the input from our
Deputies to report on progress at our next meeting.	
    * Surveillance. We welcome recent initiatives on Fund
surveillance, and agree that the current surveillance framework
should be significantly enhanced. We welcome the progress by the
Fund in advancing consideration of an integrated surveillance
decision and commit to support the decision process.
Strengthening surveillance should bring together bilateral and
multilateral perspectives in Fund policy advice and enable
better assessment of global and country level risks and
spillovers to economic and financial stability, and engage more
effectively with policymakers. The IMFC has a key role to play
in regularly guiding strategic and operational priorities for
Fund surveillance. 	
The next Action Plan provides an opportunity to report on
Next IMFC meeting. Our next meeting will be held in Tokyo on
October 12-13, 2012.
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