Finance Ministers from Commonwealth member-nations have stressed the need for policy support measures to tackle the cost-of-living crisis as well as food insecurity, especially for member-countries dependent on imports of basic commodities.
At a conference on the sidelines of the World Bank-IMF Annual Meetings in Washington D.C, United States they resolved to do more in support of monetary policies outlined by Governors of the respective Central Banks of Commonwealth members who had met earlier on Tuesday, also on the margins of the global event.
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In a statement from the Commonwealth Secretariat’s Communication Division, the Rwandan Minister of Finance and Economic Planning, who chaired the meeting, Uzziel Ndagijimana, also emphasised the need to tame the run-away inflation affecting members.
“I am happy that today, one of the issues being discussed is tackling inflation from a fiscal policy stance. Fiscal authorities have important roles to play in combating inflation, but not in isolation of the central banks. These fiscal tools should cushion the effect on vulnerable households and businesses, helping them to cope with the rising cost of living and cost of doing business; as well as safeguarding food and energy security.”
The meeting with tbe theme, “A Road to Economic Recovery-A Macro-economic Perspective”, the effects of the Covid-19 pandemic, and the ongoing geo-political tensions and their impact on global output and supply chain disruptions was also deliberated upon.
The Commonwealth Secretary-General, Patricia Scotland, who addressed the Finance ministers, emphasised the importance of fiscal authorities.
In her words, “The economic challenges facing us necessitate concerted efforts to develop viable strategies to revive and revitalise our economies for the benefit and well-being of Commonwealth citizens. To achieve the future we want, a future that leaves no one behind, global and regional collaboration remains imperative. We need to acknowledge that while the rising cost of living affects everyone, it disproportionately affects climate-vulnerable, small, developing, and low-income countries. More needs to be done to provide inclusive debt relief and financial support for them all”
The statement added that the Commonwealth scribe also touched on debt overhang faced by many member-states. “Furthermore, there is also the need to strengthen debt management systems to contain public debt at manageable levels.”
The ministers touched on fiscal measures to tackle inflation, and outlined a document, A Fiscal Framework for Resilient and Sustainable Development; and
Managing elevated debt amid economic uncertainty among Commonwealth nations” which showed that the average inflation rose from 4.1 per cent in 2021 to an estimated 6.6 per cent so far in 2022.
It also came to the fore that Commonwealth small states have experienced larger increases, with inflation doubling from 2.7 per cent in 2021 to 5.4 per cent within the same fiscal year.
The statement adds that the meeting had recommendations such as the provision of fiscal support: Well-designed and carefully targeted fiscal support to reduce the negative impact on growth without adding significantly to inflation. Others include, the provision of support to address supply chain disruptions and that efforts must be directed at tackling the bottlenecks that cause supply chain disruptions.
On the call for effective debt management and promotion of debt transparency, the Ministers had frank discussions regarding the inflationary pressures facing their countries and considered the recommended measures that need to be taken to cushion the effects of inflation and boost economic growth.
The Commonwealth Finance Ministers welcomed the IMF’s newly-introduced tool, the “Resilience and Sustainability Trust”, which is aimed at helping low-income and vulnerable middle-income countries build resilience to economic shocks, but urged the IMF to put in place realistic and practical eligibility conditions, particularly for small and vulnerable countries.
(Editor: Terverr Tyav)
