D-8 central bankers pledge to understand economic issues
Governors of State Banks of (D-8) countries have pledged to understand economic issues confronted by them enhancing co-operation among themselves to better comprehend challenges.
A joint communiqué of D-8 countries issued here said, “We Governors of Central Banks of Developing Eight (D-8) Countries, held our second meeting in Islamabad, Pakistan on Wednesday with Yaseen Anwar, Governor of the State Bank of Pakistan in the chair to achieve the objectives of increasing our mutual understanding of various economic and financial sector related challenges facing us, and enhancing co-operation among ourselves to confront these challenges”.
They said that since they last met in Abuja, Nigeria in July 2010, the global economy continues to face a number of challenges. External, fiscal and financial imbalances still persist, creating challenges on economic growth and employ- ment. Global growth is projected to drop in 2012 because of weak economic activity in the US and deteriorating sovereign and banking sector developments in the euro area. As a result, real GDP growth in the emerging and developing economies is going to further slowdown.
“Although the impacts and related challenges may be different from country to country, and region to region, we are all united in our resolve to achieve sustainable and inclusive growth in a collaborative way,” they said.
“Specifically, we will formulate monetary and financial policies to support sustainable growth strategy in D-8 countries in the backdrop of an uncertain outlook for the global economy, promote Innovative Financial Inclusion Policies, explore opportunities in Islamic Finance and establish information exchange and promote peer learning amongst D-8 central banks,” they said.
They said we must work together to formulate monetary and financial policies to support sustainable growth strategy for D-8 countries in the backdrop of an uncertain outlook for the global economy. The D-8 economies face a diverse set of economic challenges. Some of these are structural; others may be cyclical in nature, while others a direct consequence of the global credit crunch of 2007-08 and the recent Euro area crises. However, in formulating a growth strategy to deal with these issues – and to identify areas of potential cooperation between members – it is necessary to understand these challenges better. In order to achieve this, we have agreed to collaborate and focus on developing and using monetary and financial policy tools that can buffer the domestic economy against the global slowdown by striking a balance between nurturing sustainable domestic demand and an export-led growth model.
Reduce dependency on demand from traditional trade partners by rebalancing and diversifying the sources of economic growth in the domestic economies by focusing on opportunities for greater cooperation amongst regional blocs, such as the D-8. Establish correspondent banking relationship and currency swap arrangements amongst D-8 countries to promote trade and capital flows.
The need to bring the informal sector into the mainstream economy, and hence into the tax net, by improving the efficiency of public institutions, in order to increase fiscal space and the effectiveness of monetary management processes.
Developing the means (such as joint research projects and professional exchanges between the member countries for capacity-building) to better understand, and learn from member countries’ experiences, on the efforts undertaken to tackle challenges that are common to the D-8 e.g. enforcing better fiscal discipline; promoting investment in infrastructure; implementation of capital standards; incentivizing banks to lend to the real sector and sustaining low and moderate levels of inflation and contributing to financial stability.
Financial inclusion will remain a top priority as it alleviates financial constraints on poor and low income households, helps them to benefit from better economic opportunities, and creates employment. We also note the effectiveness of existing policy frameworks and institutions and progress made on various innovative new approaches to financial inclusion.