Building the Future: Jobs, Growth, and Fairness in the Arab World



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By Christine Lagarde

(Version in عربي and Français)

Returning from Amman, where we just wrapped up a conference on the future of the Arab countries in transition, I am truly energized by the optimistic spirit that I encountered. Following on the heels of my visit to Morocco, it was an extraordinary couple of days of better understanding the people and the challenges they confront in this fascinating region.

Christine Lagarde, IMF Managing Director, speaks to Syrian refugee woman during visit to Syrian al-Za'atari refugee camp in Mafraq city

IMF Managing Director Christine Lagarde speaks to Syrian refugee women at al-Za’atari refugee camp in Mafraq, Jordan. Photo: Pool/Ali Jarekjiali Jarekji/AFP/Getty Images

I did not start my visit to Jordan in a conference room, but at the Za’atari refugee camp. It is now home—hopefully a temporary one—to over 100,000 Syrians who fled the bloody conflict in their country. I saw firsthand how these refugees cope under extraordinarily difficult circumstances—and how Jordan, the region, and the international
community are coming together. It is heartening to see how Jordanian hospitality and determined support from UN agencies and many other aid organizations are preventing a bad situation from becoming even worse. But more help is direly needed. We at the IMF are doing our own part, by flexibly supporting Jordan with a $2.1 billion loan. Continue reading

Stabilizing Ukraine


moghadamsmallBy Reza Moghadam

(Version in Русский and Español)

Even before geopolitical tensions unleashed currency flight, bank deposit withdrawals and surging risk premiums, Ukraine faced serious challenges. The crisis there has been years in the making, reflecting deep structural problems that left it vulnerable to periodic funding shortfalls and near the bottom of transition country league tables. Thus, any program to tackle the immediate crisis in Ukraine must inevitably come to grips with this legacy.

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Seeing Our Way Through The Crisis: Why We Need Fiscal Transparency


by Carlo Cottarelli

Version in Français

Without good fiscal information, governments can’t understand the fiscal risks they face or make good budget decisions. And unless that information is made public, citizens and their legislatures can’t hold governments accountable for those decisions.

Fiscal transparency—the public availability of timely, reliable, and relevant data on the past, present, and future state of the public finances—is thus crucial to the foundation of effective fiscal management.

A new paper from the IMF on fiscal transparency, accountability, and risk considers the progress we have made in opening up the “black box” of fiscal policymaking over the past decade, the lessons of the recent crisis for current fiscal reporting standards and practices, and the steps we need to take to revitalize the global fiscal transparency effort.

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Without Better Data, Middle East Policymakers Risk Getting Lost


By Nemat Shafik

(Version in عربي)

Recently I went orienteering with my children as part of a school trip.  Orienteering is a sport whereby you have to find your way to various checkpoints through unknown terrain with only a compass and a topographical map.

Wandering through the woods with six 9-year-olds was a good lesson in the value of good directions and data to find your way when you are in unchartered territory.

Likewise, making policy decisions without adequate and timely data would also result in getting lost, wasting time and money, and making policy mistakes with obvious negative consequences for growth and development.

The Middle East and North Africa (MENA) region suffers significant shortcoming in data, which are particularly problematic at a time economic transition (see table below).  There are important data gaps, poor data quality and in many cases, internationally agreed standards of statistical methodologies, compilation periodicity and timeliness, and data dissemination practices are not followed.  I emphasized these issues during my participation at the ArabStat Conference in Morocco this month.

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Beyond the Austerity Debate: the Deficit Bias in the post-Bretton Woods Era


By Carlo Cottarelli

(Version in Español)

The austerity vs. growth debate has raged in recent months, pitting those who argue that fiscal policy should be tightened more aggressively now to bring down high levels of debt, even though economic growth remains weak, against those who want to postpone the adjustment to better times. This is a critical issue for policymakers, perhaps the most important one in the short run.

And yet, this debate—which, mea culpa, I have myself contributed to―is attracting too much attention.

This is bad for two reasons:

  • The debate is driven, to some degree, by ideology and is therefore more focused on the relatively limited areas of disagreement than on the far broader areas of agreement. Most economists would agree that fiscal consolidation is needed in advanced economies, and that the average annual pace of adjustment during 2011-12―about 1 percentage point―is neither too aggressive nor excessively slow. Most economists would also agree that countries under pressure from markets have to adjust at a faster pace, while those that do not face such constraints have more time. Of course, there is disagreement on some aspects of the fiscal strategy, but it relates to specific country cases.
  • The debate is detracting attention from policy issues that may seem less urgent, but which are nevertheless critical in the medium term. I am referring to what I would call the institutional gaps in fiscal policymaking that still exist in most advanced and emerging economies. These gaps have contributed to a bias in the conduct of fiscal policy in favor of deficits that is behind many of the current problems.

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BRICs and Mortar—Building Growth in Low-Income Countries


By Dominique Desruelle and Catherine Pattillo

(Versions in 中文PortuguêsEspañol,  Русский)

The so-called BRIC nations—Brazil, Russia, India and China—could be a game changer for how low-income countries build their economic futures.  

The growing economic and financial reach of the BRICs has seen them become a new source of growth for low-income countries (LICs).

LIC-BRIC ties—particularly trade, investment and development financing—have surged over the past decade. And the relationship could take on even more prominence after the global financial crisis, with stronger growth in the BRICs and their demand for LIC exports helping to buffer against sluggish demand in most advanced economies.

The potential benefits from LIC-BRIC ties are enormous.

But, so too are challenges and risks that must be managed if the LIC-BRIC relationship to support durable and balanced growth in LICs. Continue reading

Unleashing Growth Potential in the Middle East


By Masood Ahmed

Recent popular protests in the Middle East and North Africa region, although likely to have a negative economic impact in the short run, might actually help to unleash the countries’ long-term growth potential.

By providing the impetus for reforms, these events may encourage better governance, greater transparency, and more competition—in other words, tackling many of the constraints that have held back progress in these societies. Continue reading

Stepping Up the Fight Against Money Laundering and Terrorist Financing


By Sean Hagan and Jody Myers

The international community has made the fight against money laundering and terrorist financing a priority. The IMF is especially concerned about the possible consequences of money laundering and the financing of terrorism on our members’ economies and on international financial stability.

The IMF’s Legal Department has the lead on the Fund’s work in combating money laundering and the financing of terrorism, and our work includes assessments of countries’ compliance with the international standard on anti-money laundering and combating the financing of terrorism (AML/CFT), technical assistance, research, and policy development.

Investors in pyramid scheme company VEFA speak to official in Tirana, Albania, in 1998 (photo: AFP)

Building on the results of our recent work on the risks from money laundering and the macroeconomic impacts of money laundering and predicate crime, we are seeking to integrate AML/CFT more fully into the Fund’s surveillance and Financial Sector Assessment Programs (FSAPs).

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Freedom of IMFormation


By Reza Moghadam

With the global financial crisis, the world is increasingly looking to the International Monetary Fund—not just for financing but as the global institution charged with overseeing members’ economies and policies (what we call surveillance). It’s easy to forget that only 10 years ago the Fund was a secretive institution. That’s no longer the case. Communicating and engaging with the world at large is now a normal and essential part of the Fund’s business.

The IMF today is a very open institution. The vast majority of our reports are published. The public can search the IMF’s archives. And we are making lots of effort to reach out to external stakeholders.

The benefits of this increased transparency, both for the Fund’s surveillance and lending activities, are indisputable. Transparency allows us to engage with the public and to build a broader understanding and support of what we do. It benefits the quality of our advice by subjecting our analysis to outside scrutiny. And more generally, it makes us more accountable for our advice and financial decisions. In all, it makes us a more effective and legitimate institution.

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