2011 In Review: Four Hard Truths


By Olivier Blanchard

(Versions in  عربي中文, EspañolFrançaisРусский, 日本語)

What a difference a year makes …

We started 2011 in recovery mode, admittedly weak and unbalanced, but nevertheless there was hope. The issues appeared more tractable: how to deal with excessive housing debt in the United States, how to deal with adjustment in countries at the periphery of the Euro area, how to handle volatile capital inflows to emerging economies, and how to improve financial sector regulation.

It was a long agenda, but one that appeared within reach.

Yet, as the year draws to a close, the recovery in many advanced economies is at a standstill, with some investors even exploring the implications of a potential breakup of the euro zone, and the real possibility that conditions may be worse than we saw in 2008.

I draw four main lessons from what has happened.

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Showcasing a More Confident Africa


Christine Lagarde

Africa is on the move. While several other regions of the world have to address slowdown and uncertainty, many countries in Africa have been facing a contrasting challenge: to respond to the growing demand for their bountiful resources and manage rising investment in much-needed infrastructure. But at the same time, growing economic uncertainty in the world is raising concerns across the continent where vulnerability to global shocks remains high.

Christine Lagarde is visiting Africa for the first time as Managing Director of the International Monetary Fund this week and she says that she hopes to deepen the Fund’s partnership with Africa.

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Making the Most of Bad Situations


By Hugh Bredenkamp

Governments in low-income countries are having to deal with a lot of bad news these days. Slow growth in the advanced economies is dampening demand for their exports and affecting inflows of investment, aid, and remittances. Changes in credit conditions elsewhere influence the availability of trade finance. Volatility in commodity prices creates problems for both importers and exporters. Meanwhile, climactic and other natural disasters continue to occur at the local and regional level.

For low-income countries, the impact of these problems can be especially damaging. A surge in food prices can undo years of poverty reduction. A collapse in the price of a key export commodity can throw many people out of work and cause tax revenues to slip, just when expenditures on public services are needed most. For the poorest countries, events elsewhere can quickly affect employment, inflation, the budget, debt, and the balance of payments.

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The Arab Spring, One Year On


By Christine Lagarde

(Version in عربي)

Almost one year ago, countries in the Middle East region embarked upon a historical transformation. Today, the state of play remains uncertain, with the setbacks and intensity of disruptions larger than expected. Here, I am thinking especially of the deplorable loss of life in places like Libya, Syria, and Yemen. And we are now moving into the most difficult, risky, and uncertain period of all.

As I mentioned in a speech today hosted by the Safadi Foundation at the Wilson Center in Washington D.C., we are in the middle of a delicate transition between “rejecting the past” and “defining the future.” It is a period when hard choices must be made, when post-revolutionary euphoria must give some way to practical concerns. It also does not help that this is happening at a time of great turmoil in the global economy. But I remain hopeful. The final destination is clear: the Arab Spring is still poised to unleash the potential of the Arab people.

It will be important to manage this difficult transition in an orderly way.

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Africa: Changing the Narrative


Jeremy CliftBy Jeremy Clift

Enduring poverty and conflict are so stark in Africa that it is sometimes difficult to see what else is happening.

In April 2011, a study published by the Columbia Journalism Review titled “Hiding the Real Africa” documented how easily Africa makes news headlines in the West when a major famine, pandemic, or violent crisis breaks. But less attention is given to positive trends and underlying successes.

In many cases, despite accelerated economic growth over the past 10 years, the rise of a middle class of consumers, and a more dynamic private sector attracting indigenous entrepreneurs, the narrative about Africa has remained focused on the bad news.

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