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Even as the global economy is recovering fast from crisis, it is subject to vulnerabilities from debt, commodities and natural disasters like the one in Japan, an IMF panel has said.
“Although we are in a better position now than where we were a year ago, the recovery has gained headway, there are significant vulnerabilities still in the global economic and financial system,” the chairman of the International Monetary and Financial Committee (IMFC), Mr Tharman Shanmugaratnam, said here on Saturday.
Briefing reporters on the discussions among the member countries, Mr Shanmugaratnam, who is also Singapore Finance Minister, said there is a sense around the table in all their discussions that they are still in a fairly fragile situation.
“We have to be extremely watchful, but we also need to develop the capabilities of the Fund to address risks proactively, to anticipate possible scenarios that could turn out to be ugly, and to require that countries, including especially systemically significant countries, take actions early to prevent another major crisis,” he said.
The Singapore Finance Minister said the IMFC has requested that the Fund enhance its work in surveillance, particularly to strengthen the linkage between multilateral surveillance, and traditional bilateral surveillance.
The IMF, he said, has also been asked to provide by its next meeting a consolidated multilateral surveillance report.
“Very useful surveillance reports that the IMF comes up with. Economic reports, fiscal reports, financial stability reports, but it is connecting the dots that is extremely important and by the time of our next meeting, the IMF will be producing a consolidated report that assesses how much progress we are making toward avoiding the prospect of another major crisis,” he said.
Underscoring the importance of employment creation for medium term sustainability, the IMFC said immediate economic impact of the tragic events in Japan and of developments in some Middle Eastern and North African countries also warrants close attention.
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