Kanimba expects WB, IMF to discuss global economic outlook

Central Bank Governor, Francois Kanimba expects this year’s Annual Meetings of the Boards of Governors of the World Bank Group and the International Monetary Fund (IMF) to focus on the impact of the global financial crisis on developing countries. This would help affected economies to revive falling capital flows, trade, remittances and tourism. The meetings that are slated for October 6-7, 2009 in Istanbul, Turkey are part of the institutions’ annual gatherings where Governors of the World Bank Group and the IMF meet to discuss progress of their work. “Certainly this year’s meetings will be dominated by developments in the global economy. The main expectation for developing countries in general is to see how the commitment by the G20 summit last year and this year have been translated into concrete action,” Kanimba, told Business Times. During the Group of Twenty (G20) summit in April that took place in London, the leaders of the twenty industrial and emerging market economies pledged to treble resources available to the IMF to $750 billion and called for an allocation of $250 billion to IMF for Special Drawing Rights (SDR). The allocation, which has been effective since end August, is based on a long-term global need to supplement IMF members’ existing reserve assets and it provides liquidity to the global economic system. Kanimba revealed that Rwanda has been allocated $100 million from the fund which will increase the country’s foreign assets. About $110 billion of the combined allocations of SDR will go to emerging market and developing countries, including over $20 billion to low-income countries. “If we have any problem with our balance of payments we can use this money,” he said, adding that for countries with “serious” balance of payment problems, the volume of resources that they can access from IMF programs has been increased significantly. “For Rwanda we do not have significant balance of payment problems. The funds we get from foreign Aid are enough to cover our deficit,” Kanimba observed, though he mentioned that the price of exports and external transfers are still less than what the country got last year. “The import bill has declined following the global crisis. If the balance of payment does deteriorate, still the deficit will be offset by the increase in foreign Aid,” he said. Due to the financial crisis , Rwanda’s export earnings in the first half of this year dropped by 32 percent while the import bill rose by 26.9 percent to give a trade deficit of $ 532 million (Rwf.300.7b). Other issues on the agenda include the impact of climate change on developing countries and the World Bank’s role, against the backdrop of the upcoming climate change negotiations in Copenhagen. The Board of Governors for each institution consists of one governor from each of the institutions’ member countries, typically the finance minister, central bank governor, or minister of development. The Annual Meetings will be preceded by meetings of the International Monetary and Financial Committee (IMFC), the advisory body of the IMF, and the Development Committee, a forum of the World Bank and the IMF that facilitates consultation and consensus-building on development issues. Ends