Highlighting recent developments in the world economy, a senior United Nations trade and development official has recommended strengthened macroeconomic policy coordination to lessen the impact of global imbalances, particularly on the growth prospects of developing countries.
Supachai Panitchpakdi, Secretary-General of the UN Conference on Trade and Development (UNCTAD), also said that strengthened macroeconomic coordination was needed to improve the coherence between international trading and financial systems, because unlike global trade, international money and finance is not organized around core principles and any of its adverse effects can be very damaging.
“Of course, the correction of the global imbalances must not be deflationary if the momentum towards meeting the MDGs (Millennium Development Goals) is to be maintained,” he told a high-level policy dialogue of the Economic and Social Council (ECOSOC) in Geneva, referring to the set of eight targets for tackling poverty, illiteracy and other global ills by 2015.
“Accordingly, we believe that the most promising approach to achieving an orderly adjustment would be through global macroeconomic policy coordination, involving also the major developing economies…Strengthened macroeconomic policy coordination is also necessary to improve the coherence between the international trading and financial systems.”
Mr. Panitchpakdi went on to say that a global monetary authority such as the International Monetary Fund (IMF) could play an important role in strengthening the international institutional framework in the monetary and financial area.
He also praised the many recent initiatives taken to cancel the debt of the poorest developing countries and emphasized that UNCTAD, as the lead agency for trade and development within the UN system, remained ready to bring its knowledge and expertise to assist developing countries in benefiting from the international trading system.