Global economics: State Bank governor addresses economic powerhouses

Specialised policies for least developed and small economies urged.

WASHINGTON: Governor State Bank of Pakistan Yaseen Anwar said on Monday that poverty alleviation and enhancing energy access to people should be at the heart of the post-2015 global development agenda and goals that the United Nations (UN) was in the process of preparing. “Distinct circumstances of countries should guide the implementation of global frameworks and agendas,” he told a special high-level meeting with the Bretton Woods Institutions (World Bank and IMF), the World Trade Organization and the United Nations Conference on Trade and Development. The State Bank governor said Pakistan would constructively engage with the global economic discourse at the UN and in other forays for a development agenda that is grounded in the needs and requirements of all countries.

Noting that the world economy was seeing some signs of recovery, Anwar said it was still mired in an economic and financial crisis. Developing countries had faced the worst consequences of the crisis, he said, adding deeper reform would be necessary to maintain stability. “Global economic stability is a common good,” he told delegates from around the world. As such, he added, it required shared understanding, not simply shared responsibility for its preservation. While many countries could withstand the intensity of the crisis, he said, shock absorbers in the developing world either were not available or were insufficient, as had been seen in the enhanced risk premium on lending and investments which in turn resulted in a surge in external financing costs.

Moreover, the continuation of the crisis aggravated the risks of debt distress in vulnerable countries, both due to exchange rate depreciation and borrowing at higher interest rates, Anwar added. If not stemmed, he said, the crisis would continue to worsen the budgetary position of many countries, due to the potential decline of Official Development Assistance. Many developing countries faced serious deterioration in their balance of payment positions.

Published in The Express Tribune, April 24^th, 2013.

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