Speech

Opening Remarks by Deputy Managing Director Tao Zhang at the Financing for Development Forum

April 15, 2019

Secretary General, Excellencies, Ladies and Gentlemen:

Good morning—thank you for inviting the International Monetary Fund to join this important opening event.

At our Spring Meetings that just concluded in Washington our members agreed that the world economy is at a “delicate moment.”

The global expansion continues, but at a slower pace than previously anticipated. While we expect growth to pick up slightly next year, medium-term prospects continue to be moderate. However, we need to do better. Stronger medium-term growth will also be essential for developing economies to achieve the sustainable development goals (SDGs.)

Our work at the Fund is focused on how the global economy can do better. At the core is three complementary and reinforcing areas of policy action:

- Domestic policies to build resilience and promote inclusion;

- Upgraded international cooperation;

- And a commitment to work together on broader global challenges.

In my brief remarks today, I will highlight a few examples:

• No issue looms larger than trade. We must cooperate to resolve trade tensions and modernize the rules-based multilateral trade system. “Free, fair, and mutually beneficial goods and services trade and investment are key engines for growth and job creation.” [1]
• On climate change, joint action is essential to confront the broader challenges posed to the world economy. The IMF is working on areas such as fiscal policy for climate mitigation and adaptation, energy pricing, and building resilience in countries vulnerable to natural disasters.
• On taxation, a re-design of the international corporate tax system is urgent. Global efforts could reduce cross-border tax avoidance and minimize profit shifting. The current situation is particularly harmful to low-income countries who have the most acute SDGs financing needs.
• On public debt, I would highlight the risk in low-income developing countries, where over 40 percent are in debt distress or at a high risk of distress. Thus, we need actions to promote sustainable financing practices. The IMF and World Bank are implementing a strategy that aims to help countries identify vulnerabilities early and better manage their debt. We are providing diagnostic tools, expanding outreach with creditors, and scaling up technical assistance in debt management.
• We must strengthen financial integrity. Governments could save 1 trillion U.S. dollars in taxes by curbing corruption. This places a premium on transparency and accountability and supporting efforts to address money laundering, terrorist financing, and illicit financial flows.

In summary, we face important challenges at a “delicate” moment. To overcome these, as noted in the Financing for Sustainable Development Report, we need robust national actions and enhanced international cooperation.

Thank you.