World leaders make inclusive growth their top priority

PTI Washington | Updated on January 16, 2018 Published on October 09, 2016

Finance ministers and central bank governors pose for IMFC family photo during the IMF/World Bank annual meetings in Washington, U.S.   -  Reuters

Acknowledging that the current model of development has increased disparity between the rich and the poor, world leaders, including US President Barack Obama, have called for global cooperation to promote inclusive growth strategy.

“We need to push back against threats to global cooperation and build a global economy that works for everybody,” Obama said in his address at a meeting of International Monetary Fund (IMF) and the World Bank leaders.

The meeting held here this week was attended by finance ministers from countries all over the world. The Indian delegation was led by Union Finance Minister Arun Jaitley.

In his address, Obama called IMF to continue promoting strong, inclusive and balanced global growth, with fiscal policies to increase demand, support structural reform and reduce economic inequality.

He asked the World Bank to continue addressing the most pressing global challenges, from tackling climate change to responding to the global refugee crisis, to championing investment in countries experiencing fragility, violence and conflict.

In its communique issued after the conclusion of the meeting, the IMF reinforced its commitment to strong, sustainable, inclusive, job-rich and more balanced growth. “We will use all policy tools — structural reforms, fiscal and monetary policies — both individually and collectively,” it said.

IMF Managing Director Christine Lagarde stressed on the need for more inclusive growth in the absence of which she warned of the threat to growth from the political backlash against globalisation. “We need growth, but we need inclusive growth. We need transition to the digital age, but a transition that benefits everyone. And we need to accelerate now,” she said.

Deputy Prime Minister of Japan and Governor of the IMF for Japan said inclusive growth was important for sustained macroeconomic growth.

The issue of shrinking middle class and labour market duality have been pointed out in Japan, too. “Under these circumstances, we plan to take measures that would contribute to achieving inclusive growth, such as raising the minimum wages by 3 per cent, which was implemented this month, and ensuring equal pay for equal work,” he said.

Chinese economist, banker and bureaucrat Zhou Xiaochuan said that in response to the global risks, all parties should adopt comprehensive and strong measures to promote strong, sustainable, balanced and inclusive global growth. “I believe the IMF should more boldly and forcefully advocate for strong, sustainable, balanced and inclusive growth by exhorting member countries to utilise all available policy levers to boost demand,” said US Treasury Secretary Jacob Lew.

Guy Ryder, Director-General International Labour Organisation called for urgent action to generate decent work needed for inclusive growth and development. “Eight years on the world economy has not fully recovered from the global financial crisis and there is a high risk that it will remain stuck in a slow growth trap unless urgent coordinated action is taken to boost growth and make it more inclusive,” he said.

The benefits from new drivers of economic growth should be more widely distributed and contribute to a reduction of inequality, argued French Finance Minister Michel Sapin. He stressed the need for more inclusive globalisation that benefits everyone. “Technological change must be backed up by changes in our training systems, support for occupational retraining and better social protection for workers. The new drivers of growth also call for new thinking about how to share value added to the benefit of the largest number of people,” Sapin said.

Mario Draghi President European Central Bank said all euro area countries should strive for a more growth-friendly composition of fiscal policies, prioritising public investment and reducing the tax burden on labour. “A strong and sustainable recovery of the euro area economy is the best contribution we can make to promoting balanced and inclusive growth around the world,” Draghi said.

The group of G-24 countries underscored the need of pursuing policies to boost demand and stimulate inclusive growth tailored to country circumstances and available fiscal space. “This entails exploring opportunities for economic diversification and, as appropriate, taking measures to improve agricultural productivity, deepen industrialisation, and more fully capture the potential of digital technologies,” it said.

In his address, World Bank President Jim Yong Kim said now there is overwhelming consensus among all the countries that “fostering robust, inclusive and sustainable growth” must remain the top priority.

Published on October 09, 2016
This article is closed for comments.
Please Email the Editor