In the International Monetary and Financial Committee (IMFC), finance ministers and central bank governors will discuss the global economic outlook. This includes the joint assessment by the International Monetary Fund (IMF) and the Financial Stability Board (FSB) on possible future risks to the global financial system. For 2009 the IMF anticipates shrinkage in global economic growth of just under 1 percent and a moderate recovery for 2010 of close to 3 percent growth. This upturn will be carried primarily by a strong expansion in the Asian emerging countries. In contrast, growth in the industrialised countries will remain relatively modest at around 1 percent in 2010. Risks identified by the IMF are the premature or uncoordinated withdrawal of public support measures, renewed weaknesses in the balance sheets of financial institutions and constrained financing possibilities in the corporate sector. In the medium term the Monetary Fund anticipates only a gradual recovery of the global economy with lower potential growth.
Other topics of discussion in the IMFC will be reforms relating to the governance of the IMF, also with regard to the quota reforms to be concluded in January 2011. The issue of total IMF quotas and resources is linked to that of the mandate of the institution. The Swiss delegation will emphasise that an increase in total IMF quotas must be guided by the long-term financial requirements of the institution and that changes in quota shares must be effected on the basis of objective criteria. The quota reforms are to be discussed together with ways of strengthening the IMFC, of selecting the management of the IMF transparently, and the mandate of the IMF.
The Development Committee will deal with the question of whether a capital increase of the World Bank is necessary due to the considerable expansion of credit allocation in the wake of the financial crisis. From Switzerland's point of view, this question must be considered within the context of the long-term strategic direction of the World Bank. In this light, a capital increase would not appear to be imperative at this point in time.
In the Development Committee, the Governors will also deal with the issue of how the voting rights and financial participation rights in the World Bank will have to be adapted. Two criteria will guide these adaptations, on the one hand the economic position of the members in the global economy and on the other their contribution to the development mandate of the institution. The main issue of the discussions will be how these criteria should be measured. In principle Switzerland supports these governance reforms, so long as they contribute to strengthening the legitimacy of the World Bank and make the institution more efficient and more effective.
In the run-up to the Annual Meetings, on 2 October there will be a meeting of the Swiss constituency in the IMF and World Bank in Belgrade hosted by the National Bank of Serbia. Along with Switzerland members of the constituency include Poland, Serbia, Azerbaijan, the Kyrgyz Republic, Tajikistan, Turkmenistan and Uzbekistan.
Address for enquiries:
Paul Inderbinen, Head of the International Monetary Fund and International Finance Division, Federal Finance Administration (FFA), tel. 031 322 61 66
Raymund Furrer, Head of the Division for Multilateral Cooperation, State Secretariat for Economic Affairs (SECO), tel. 031 324 08 19
Olivier Chave, Head of the Division for Global Institutions, Swiss Agency for Development and Cooperation, tel. 031 322 86 09