By Maximilian Clarke
Addressing a meeting of APEC (Asia-Pacific Economic Cooperation) leaders in Hawaii, Christine Lagarde, Managing Director of the International Monetary Fund (IMF) stressed the crucial role on the global recovery that high-growth East Asian economies play, whilst cautioning that without action on the eurozone crisis, “the world economy could be swept into a downward spiral of collapsing confidence, weaker growth, and fewer jobs”.
“This would affect all nations and so we all have a stake in resolving that crisis.
“I also note that it is important to avoid other risks to the global economy, especially those related to low growth and unacceptably high unemployment. To meet these difficulty challenges, all countries must play their part to help rebalance the global economy.
“For APEC’s advanced economies, this means primarily adopting strong medium-term fiscal consolidation plans, which will create space to accommodate growth and jobs now. For APEC’s emerging market and developing economies, it means addressing underlying vulnerabilities including better social safety nets; investing in infrastructure, health and education; financial sector reform; and exchange rate appreciation where necessary.
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