Lagarde: Recovery hampered by uncertainty

Oct. 11, 2012 at 2:08 AM
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TOKYO, Oct. 11 (UPI) -- The head of the International Monetary Fund Thursday called for action to dispel the uncertainty over policy implementation that is hampering global recovery.

Addressing a news conference in Tokyo, the venue of the annual meetings of the World Bank and the IMF, Christine Lagarde said the uncertainty concerned whether policymakers would be able to move forward with their policy commitments.

Speaking in the wake of the IMF's downward revision of its forecast for world economic growth, Lagarde said many good decisions have been taken to secure global recovery, but they remain to be put in force.

"We need action to lift the veil of uncertainty," she said. "Many of us have debated what actions are needed, many of us understand what needs to be done, but it actually needs to happen."

Stressing the need for cooperation, the former finance minister of France said the task of securing sustained recovery has become more complex, involving multiple players.

She said new players are emerging on the world scene even as the traditional ones assume different roles.

"We really need to go through what needs to be done to make sure that recovery is not just a little bounce but is really here for the longer term and is sustainable'" she urged.

On the IMF's forecast revision, Lagarde said development of larger global ripple effects have spread the slowdown to emerging markets, particularly those in Asia.

"My message today: Countries need to take courageous and cooperative action to spur a lasting recovery," Lagarde said.

Replying to questions, Lagarde said discussions between the IMF and the Egyptian authorities would resume in Cairo this month and expressed confidence of reaching an agreement.

She said IMF officials were in discussions with the Greek authorities to resolve differences to address all the elements of Greece's IMF-backed program, while welcoming the European Stability Mechanism.

When asked about the absence of top Chinese officials at the meeting, Lagarde said all economic players and partners in Asia are critical for the global economy and the IMF is the forum for dialogue and improved relationships.

Japan's Kyodo News agency said Lagarde voiced concern that China had decided not to send its Finance Minister Xie Xuren and its central bank Governor Zhou Xiaochuan to the meeting.

"Our concern is that they will be missing this great meeting," she was quoted as saying. "The meeting is extraordinarily well-organized and we have a lot of substantive issues to be discussed."

Kyodo said China's decision reflected its growing tensions with Japan over Japan-controlled islands in the East China Sea which are claimed by Beijing.

Lagarde's news conference was followed by that of World Bank President Jim Yong Kim, who noted the that soaring food prices would hit the poor economies the most, Kyodo said.

"We are in challenging times. Food prices remain high and volatile," Kim said, adding the World Bank stands ready to address the problem.

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