Treasury Secretary talks at IMF and World Bank on poverty and prosperity

Treasury Secretary Gabriel Makhlouf spoke in support of the World Bank Group’s twin goals of eliminating extreme poverty and boosting shared prosperity at a meeting of the Development Committee of the World Bank and International Monetary Fund this weekend. The Development Committee is one of the formal elements of the two organisations’ Spring Meetings, held in Washington D.C. each April.

Mr Makhlouf is New Zealand’s Alternate Governor at the World Bank, and also represented a constituency of thirteen other countries at the Development Committee.

“Eliminating extreme poverty is the Bank’s core mission, and economic growth is central to making that happen. We are fortunate that we have arrived at a point in history when, with hard work and commitment, we can explicitly and realistically aim for this goal,” says Mr Makhlouf.

“What’s clear is that societies around the world have learned that building shared prosperity is critical for long-term development and stability. This fits with the ‘living standards’ approach that the New Zealand Treasury is increasingly taking, where broad engagement in a range of economic and social opportunities is a key factor in success.”

Mr Makhlouf also took part in bilateral meetings with counterparts from other Treasuries in the Asia-Pacific region, and held discussions with senior World Bank and IMF officials on the global economic outlook. The IMF Spring meetings had a strong focus on progress in reducing fiscal deficits in advanced and emerging economies. This included discussion around the pace and impact of fiscal adjustment, implications for growth and inequality, and the optimal level of government debt in a post-GFC world.

Other discussions highlighted evolving thinking on the future role of macroeconomic policy, including monetary, fiscal, and macroprudential policy. It was noted that broad assumptions need to be adapted to individual circumstances such as size, openness and integration of economies, with New Zealand cited as an example. There was some debate about how transferable experience from small countries was to large economies, and vice versa, when tailoring policy frameworks and policy settings.

Mr Makhlouf’s statement at the Development Committee can be read in full here: http://search.worldbank.org/devcomm?_foldid_exact=Statements

The communiqué from the International Monetary and Financial Committee (IMFC) can be seen here: http://www.imf.org/external/spring/2013/imfc/index.asp

Note: the countries represented by New Zealand at the World Bank Development Committee were: Australia, Cambodia, Kiribati, Republic of Korea, Marshall Islands, Federated States of Micronesia, Mongolia, New Zealand, Palau, Papua New Guinea, Samoa, Solomon Islands, Tuvalu and Vanuatu.