IMF, World Bank begin annual meetings in Tokyo

The weeklong event, involving a number of conferences, debates and seminars, will also highlight efforts to limit the economic impact of natural disasters, with the Japanese government co-hosting a meeting on Tuesday and Wednesday in the region worst affected by the March 2011 earthquake and tsunami, Kyodo reports.

The IMF released its latest World Economic Outlook report Tuesday, revising downward growth forecasts for the global economy to 3.3 percent for 2012 and 3.6 percent for 2013 from the July projections of 3.5 percent and 3.9 percent, respectively.

The world economic recovery "has suffered new setbacks, and uncertainty weighs heavily on the outlook," the Washington-based multilateral lender said in the report, pointing to insufficient policy responses by advanced economies and calling for U.S. and European policymakers to accelerate efforts to address challenges.

Participants from the fund's 188 members around the world will focus on the sovereign debt and banking crisis in Europe, with contagion spreading outside the region through trade and financial channels, hurting emerging market economies such as China.

Finance ministers and central bank governors from the Group of Seven industrialized nations -- Britain, Canada, France, Germany, Italy, Japan and the United States -- will gather on Thursday. The European members will explain what actions they are taking to contain the crisis ahead of this month's European Union summit.

In the informal meeting, the United States, meanwhile, is expected to brief others on its fiscal policy amid concerns about a looming "fiscal cliff," the anticipated termination of income tax cuts and a massive spending reduction in early 2013, while Japan will highlight its worries about the stronger yen, which is weighing on the country's exports.

Finance chiefs from the G-7 plus Russia, known as the G-8, will also meet on the sidelines of the annual meetings Friday to discuss how to support the Arab Spring democratization movement.

This year's IMF-World Bank meetings were originally scheduled to be held in Egypt. But political turmoil in the country forced its government to give up hosting the event.

Tokyo, which last hosted the annual meetings in 1964 when it was able to showcase the rapid economic development it had achieved following its defeat in World War II with support from the two international aid agencies, hopes to accelerate momentum in global assistance for the developing world.

With the international community paying closer attention to democratization and development in Myanmar, the Japanese government will host a meeting Thursday to study how to address the debt problems of the Southeast Asian country, which was isolated during decades of military rule until last year.

Japan, Myanmar's biggest creditor, pledged in April to conditionally write off part of its debt and restart yen loans and is expected to ask other creditors, including the World Bank and some European nations, to take similar steps.

Japan as host will also highlight the issue of how to ease the impact of natural disasters. Tokyo and the World Bank have conducted a joint study for that purpose and will report their work at a meeting on Tuesday and Wednesday in Sendai, the biggest city in northeastern Japan, the region worst affected by last year's earthquake and tsunami.

The International Monetary and Financial Committee, the policy-setting body of the IMF, and the Development Committee, a joint forum of the fund and the World Bank, will respectively meet Saturday.

The IMFC will continue to discuss governance reforms of the IMF aimed at helping enhance the voices of developing members of the fund, reflecting their growing importance in the global economy.

The committee is likely to fall short of producing any tangible result, however, as the United States, the biggest stakeholder in the IMF, has not completed domestic procedures for accepting a 2010 agreement on the reforms, apparently affected by the political situation in the run-up to next month's presidential election.

The reforms require acceptance by at least 113 members accounting for 85 percent or more of total voting power. The United States alone holds a voting share of 16.73 percent, which means its acceptance of the agreement is indispensable.

Emerging members such as Brazil and China have called for swift implementation of the reforms, showing reluctance to make additional financing contributions, known as quotas, to the IMF unless they are given prominent voices within the fund.

The fund has pledged to fully implement the quota and governance reforms by this year's annual meetings. But given the current conditions, it is likely to miss the goal.

Read more http://english.kyodonews.jp/