|
Washington: World finance officials have urged the International Monetary Fund (IMF) to keep closer tabs on the global economy in the hope future crises like the one currently shaking world markets can be prevented.
After one of its twice-yearly meetings, the IMF's 24-nation steering committee said global financial instability had increased and inflation risks had risen due to a sharp run-up in the cost of food and other commodities.
"Policy-makers should continue to respond to the challenge of dealing with the financial crisis and supporting activity, while making sure that inflation is kept under control," the International Monetary and Financial Committee (IMFC) said in a post-meeting communique.
As rich countries struggle to get a handle on fin-ancial turmoil that has rocked markets for nine months and worry the US dollar may have fallen too far, emerging and developing nations wondered whether they would be spared from a crisis that may have already pushed the US economy into recession.
The IMFC said developing economies had shown resilience in the face of the crisis sparked by mounting US mortgage defaults, but cautioned that inflationary risks had picked up.
"For many counties, containing inflation and addressing vulnerabilities remain key priorities," it said.
Concerns over rising prices for food and other commodities, and related shortages of key staples, has shaken developing economies worldwide.
Developing countries called on the IMF and World Bank to stand ready with emergency funding to help the poorer nations of the world in case financial market woes spread to their economies and the food crisis worsened.
Just 12 months ago, finance ministers and central bank chiefs were basking in five straight years of strong world growth, unaware a US housing boom was about to go bust.
All of this has taken place at a time the IMF has sought a new role for itself amid a sharp decline in borrowing from emerging and developing economies.
The lender has also sought to boost its relevance by giving emerging economies China, India, Brazil, Mexico and South Korea more voting power in the institution.
While voting power changes and a new financial model aimed at putting the fund on sounder footing still need the approval of all of the IMF's 185 member countries, they were endorsed by the IMFC.
"The fact that the most relevant economic and financial multilateral institution in the world shows the capability to reform itself at this very moment, constitutes by itself a response to the crisis and an indication that a global crisis has to be addressed with a global view," IMFC chairman Tommaso Padoa-Schioppa said.
|
