WASHINGTON, April 4 (Xinhua) -- Against the backdrop of the uneven and fragile global economic recovery, new approaches to tackle the global challenges and global cooperation are badly needed in the post-crisis era, Dominique Strauss-Kahn, Managing Director of the International Monetary Fund (IMF), said here on Monday.
The global economy continues to revive, but in a way that is unbalanced among various economies, the IMF chief said Monday in a speech at George Washington University adjacent to the Washington- based organization.
Economic recovery in advanced economies is still too sluggish and unemployment is still too high. Meanwhile, the emerging market economies, especially in Asia and Latin America, are powering ahead while grappling with overheating, he added.
"The low-income countries proved remarkably resilient, but are now being hit by high food and fuel prices," he said in a curtain- raiser address prior to the Spring Meetings of the IMF and its sister agency World Bank that are scheduled to kick off later this month.
"In Europe, some countries are at a crossroads -- they have taken difficult steps, but need to do more. Progress has been partial and piecemeal so far, and this is a key risk for the crisis countries as well as for overall recovery in Europe," he added.
"We should not rejoice too early, as there are still many downside risks," Strauss-Kahn warned.
The task on the way ahead was to rebuild the foundations of stability, to make them stand the test of time and to make the next phase of globalization work for all, he contended, adding that this rebuilding has three core dimensions including a new approach to economic policies, a new approach to social cohesion, as well as a new approach to cooperation and multilateralism.
Monetary policy must go beyond price stability, and look to financial stability, he said, adding that the global financial sector needs major regulatory surgery.
The former French finance minister stressed that the global financial crisis originated in a culture of reckless risk-taking, which is unfortunately still alive today.
The new global governance must also pay more heed to social cohesion, he contended, as this globalization had a "dark side" -- a large and growing gap between the rich and poor.
On the eve of the crisis, inequality in the United States was back to its pre-Great Depression levels, Strauss-Kahn pointed out.
"Like the Great Depression before it, the Great Recession was preceded by an increase in the income share of the rich and a growing financial sector," he added.
The IMF head argued that this is a "unique moment in history," as the global financial crisis not only devastated the global economy while inflicting pains around the world, but also destroyed the intellectual foundations of the global economic order of the last quarter century.
On the front of global collaboration, he noted that the global economy nowadays is too inter-connected to allow narrow national interests to prevail, cautioning that the willingness for global cooperation was not as strong as two years ago.
He noted that without the cooperation spearheaded by the G20, the world would probably have seen a second Great Depression, and this cooperation should be strengthened and not fade away in the post-crisis era.
Source: http://news.xinhuanet.com
The global economy continues to revive, but in a way that is unbalanced among various economies, the IMF chief said Monday in a speech at George Washington University adjacent to the Washington- based organization.
Economic recovery in advanced economies is still too sluggish and unemployment is still too high. Meanwhile, the emerging market economies, especially in Asia and Latin America, are powering ahead while grappling with overheating, he added.
"The low-income countries proved remarkably resilient, but are now being hit by high food and fuel prices," he said in a curtain- raiser address prior to the Spring Meetings of the IMF and its sister agency World Bank that are scheduled to kick off later this month.
"In Europe, some countries are at a crossroads -- they have taken difficult steps, but need to do more. Progress has been partial and piecemeal so far, and this is a key risk for the crisis countries as well as for overall recovery in Europe," he added.
"We should not rejoice too early, as there are still many downside risks," Strauss-Kahn warned.
The task on the way ahead was to rebuild the foundations of stability, to make them stand the test of time and to make the next phase of globalization work for all, he contended, adding that this rebuilding has three core dimensions including a new approach to economic policies, a new approach to social cohesion, as well as a new approach to cooperation and multilateralism.
Monetary policy must go beyond price stability, and look to financial stability, he said, adding that the global financial sector needs major regulatory surgery.
The former French finance minister stressed that the global financial crisis originated in a culture of reckless risk-taking, which is unfortunately still alive today.
The new global governance must also pay more heed to social cohesion, he contended, as this globalization had a "dark side" -- a large and growing gap between the rich and poor.
On the eve of the crisis, inequality in the United States was back to its pre-Great Depression levels, Strauss-Kahn pointed out.
"Like the Great Depression before it, the Great Recession was preceded by an increase in the income share of the rich and a growing financial sector," he added.
The IMF head argued that this is a "unique moment in history," as the global financial crisis not only devastated the global economy while inflicting pains around the world, but also destroyed the intellectual foundations of the global economic order of the last quarter century.
On the front of global collaboration, he noted that the global economy nowadays is too inter-connected to allow narrow national interests to prevail, cautioning that the willingness for global cooperation was not as strong as two years ago.
He noted that without the cooperation spearheaded by the G20, the world would probably have seen a second Great Depression, and this cooperation should be strengthened and not fade away in the post-crisis era.
Source: http://news.xinhuanet.com
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