Thank you Tom ! Here is the text of the PDF.
Statement by His Excellency Minister Obaid Humaid Al Tayer,
Minister of State for Financial Affairs for the United Arab Emirates
On Behalf of Bahrain, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Maldives, Oman,
Qatar, Syria, United Arab Emirates, and Yemen
International Monetary and Financial Committee Meeting
October 11, 2014
1. Prospects for the global economy point to a rebound in growth in the near term
although the recovery is still unfolding at an uneven pace. Despite supportive central bank
policies for an extended period, the firming of the recovery did not materialize as was
expected when we met during the Spring Meetings. The Fund’s analytical work highlights
downside risks to financial stability from the prolonged period of low interest rates that has
encouraged excessive financial risk-taking. The optimism in financial markets has kept
equity prices high, compressed spreads, and lowered volatility, in spite of the uncertainty still
surrounding the growth outlook from the anticipated withdrawal of the monetary stimulus.
The risk of prolonged low growth is now of concern and underscores the need for policy
actions to support productivity and aggregate supply.
2. We therefore appreciate the key messages of the Managing Director’s Global Policy
Agenda which gives prominence to growth-enhancing measures and policies to safeguard
financial stability. Without concerted policies in major economies, the pick-up in growth may
again fall short of expectations in spite of the easing of both financial conditions and the pace
of fiscal consolidation. In this regard, we appreciate the recent supportive measures by the
ECB to tackle low inflation and address fragmentation, including through a reduction in
policy rates and targeted easing. In addition to avoiding a premature normalization of
monetary policy, we see merit in increasing public infrastructure investment in all advanced
economies (AEs) and emerging market economies (EMEs) based on well-identified needs
and where fiscal space exists. Meanwhile, the authorities should remain vigilant to the buildup
of financial risks and deploy macroprudential tools.
3. EMEs continue to be the main drivers of world growth, but they face slower growth
prospects compared to pre-crisis levels and remain vulnerable to market volatility. Some of
the capital flows that helped buoy those economies may well reverse direction with the
normalization of monetary policy in major AEs. Efforts in these countries should continue to
focus on strengthening fundamentals, policy buffers and implementing efficient
macroprudential policies, which will mitigate the potential impact of higher interest rates and
tighter external financing conditions. We welcome the indication that growth in low-income
and developing countries is expected to exceed 6 percent in both 2014 and 2015, reflecting
sound economic policies in many of these countries in recent years.
4. For the countries in our constituency, we broadly concur with the assessment of a
favorable but uncertain growth outlook given the exogenous shocks and policy challenges
faced by the authorities. For the oil exporting countries, higher oil production and
government spending have underpinned economic activity in 2014. The GCC countries
continue to exhibit robust growth in the non-oil sector, expected to remain around 6 percent
in 2014-15, while oil GDP growth has tapered in line with modest increases in global
demand and rising supply in North America. These countries are pursuing strategies to rebalance growth towards more productive public spending and to strengthen the non-oil fiscal balance consistent with the objective of preserving the oil wealth for future generations. Meanwhile, continued progress is being achieved in diversifying these economies away from oil, raising productivity, and promoting employment of nationals in the private sector. For the non-GCC oil producing countries in our constituency (Iraq, Libya,Yemen), domestic strife has adversely affected both oil and non-oil production, but activity expected to rebound in 2015 as domestic frictions dissipate.
5. For oil importers in our constituency, average growth is projected to rise in 2015 on
the back of confidence gains, higher demand from trading partners, and structural reforms
that are nurturing competitiveness and foreign direct investment. Ambitious energy subsidy
reforms, recently initiated in a number of countries, have not only contributed to improving
the fiscal position but also had a positive impact on business confidence and investment. On
the revenue side, further efforts should be exerted to enhance reforms. For countries
experiencing domestic strife, the Fund should stand ready to upscale technical support on
policy priorities once domestic stability is restored and to support international reconstruction
efforts as soon as feasible.
6. We appreciate recent Fund work on policy priorities to raise medium-term growth,
create jobs and improve living standards. To support domestic efforts toward a more
inclusive development strategy, future Fund analysis and policy advice could provide deeper
and country-specific analysis of policy options that balance fiscal sustainability and jobcreating
growth. Quantitative analysis of the distributional and growth impact of fiscal measures would be welcome, in collaboration with country authorities. We agree with the Fund’s view that domestic reform efforts can be supported by the international community through financing, investments, and enhanced access to markets.
7. We welcome the fund’s support for Arab Countries in Transition (ACTs) and
substantial donor support from the region, and call on the Fund to scale up assistance to these
8. We value the timely provision of technical assistance to our countries which helps
underpin crucial policy reforms. Given the importance of financial deepening for inclusive
growth, we encourage Fund support of domestic efforts to achieve more financial integration,
deepen local currency financial markets, and develop non-banking financial institutions and
sectors. We appreciate IMF contributions to the ArabStat initiative to enhance the provision
of statistics in the region as this will undoubtedly underpin sound policy formulation. We
welcome the call for a balanced policy dialogue that takes account of country perspectives as
highlighted in the recently completed Triennial Surveillance Review.
9. On the subject of quota reform, we emphasize again that such reforms should ensure
a fair representation of Arab countries, with due regard to their role in the global economy. In
particular, shifts in quota shares in favor of dynamic emerging and developing countries
should not come at the expense of other emerging markets and developing countries.
Finally,we take note of improvements in staff diversity and call for intensified efforts to address the underrepresentation of Arab nationalities, particularly at the level of managers and high level