May 30, 2024

Treasury Secretary Janet Yellen Delivers Joint IMFC and Development Committee Statement on Global Economic Challenges and Priorities

U.S. Treasury Secretary Janet Yellen arrives at the G-20 Finance Ministers and Central Bank Governors' Meeting during the 2022 Annual Meetings at the International Monetary Fund. IMF Photo/Alison Shelley 13 October 2022 Washington, DC, United States Photo ref: AS221013214.cr3

The United States Secretary of the Treasury, Janet L. Yellen, recently made a statement at the Joint International Monetary and Financial Committee (IMFC) and Development Committee Meeting, which was held on April 12, 2023. In her statement, she discussed the current global economic environment and the challenges faced by low- and middle-income countries. Secretary Yellen expressed optimism in the collective efforts to address these challenges, but also highlighted the need for reforms in the multilateral development bank (MDB) system to better equip these institutions to respond to the increasing frequency, scope, and complexity of global challenges.

Secretary Yellen emphasized the critical role played by the World Bank and IMF in anchoring the international community’s response to shocks, particularly in the case of Ukraine, where the World Bank Group has provided a platform through which the international community has mobilized donor financial support of over $20 billion in emergency financing for the public and private sector. The IMF has also moved forward with a $15.6 billion program to bolster economic and financial stability and strengthen structural reforms. The United States remains committed to providing economic support to Ukraine and calls on the international community to stay resolute in its support for the country.

In the United States, the economy remains sound, but recent stresses at a few American depository institutions have necessitated actions to stabilize the U.S. financial system and protect depositors. The U.S. banking system is far more resilient and has a stronger foundation than before the Global Financial Crisis, and steps will be taken to ensure that the financial system remains strong. The United States is working with international counterparts, including the IMF and the Financial Stability Board, to monitor disruptions to global financial stability.

Secretary Yellen highlighted the importance of IMF macroeconomic and financial sector surveillance, policy advice, and capacity building, particularly as countries contend with elevated inflation, tighter financial conditions, and fiscal pressures. She also emphasized the need to address debt vulnerabilities in low-income and middle-income countries, and called on all bilateral creditors to take tangible actions to support debt sustainability. She welcomed the provision of financing assurances for Sri Lanka that allowed the IMF program to move forward, and urged all creditors to now complete the process of debt restructuring by the first review.

The IMF’s core mandate with regard to assessing external imbalances and exchange rate practices was also discussed, and Secretary Yellen encouraged ongoing work to enhance debt transparency, develop guidelines on the use of collateralized debt, and promote more timely information-sharing of debt sustainability analyses. She also urged the IMF to develop process improvements to the Common Framework and debt restructuring for low- and middle-income countries.

Secretary Yellen welcomed the recent review of the IMF’s enhanced governance framework and support measures to strengthen IMF engagement on governance and anti-corruption measures. She viewed the upcoming review on precautionary lending instruments as an important step toward better supporting members facing actual or potential balance of payments difficulties, and an opportunity to better incorporate political risk and governance considerations.

Secretary Yellen called for bold action to address global challenges such as climate change, and emphasized the need to mainstream climate science into economic policy. She highlighted the United States’ commitment to meeting its climate goals using tools such as the Inflation Reduction Act and Bipartisan Infrastructure Law, which are working to shift the U.S. economy along the energy transition and toward President Biden’s goal to reduce emissions 50-52 percent by 2030. She also called for increased investment in infrastructure sectors critical to equitable growth and support countries’ clean energy and digital transitions.

To sustain achievements in improving health security and response, Secretary Yellen emphasized the need to continue the important work on finance-health collaboration in the G20 with the IFIs to be better prepared for future, cross-border health threats.

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