Stalled post-crisis reforms must be restarted

When the financial crisis erupted, policymakers around the world gathered in Washington for the International Monetary Fund’s annual meeting, and responded impressively. They won the war against global depression by showing an unusual and much-needed common purpose. Now those returning to meet at the IMF in Washington this weekend, and especially policymakers from industrial countries, need to do much more to secure the peace. In the early part of this crisis, swift coordinated action saw a painful economic collapse replaced by employment gains and greater financial stability. The recovery in industrial countries was aided by an impressive rebound in emerging economies. Having entered the crisis with strong financial conditions, these developing nations demonstrated a resilience unthinkable a few years ago. Unfortunately, declarations of victory proved premature, especially for the U.S. In the middle of 2010 job creation slowed, talk of a “recovery summer” faded and growth projections were revised downwards. Even worse, global coordination through the IMF and the Group of 20 industrialized nations gave way to narrow domestic agendas. More recently, an escalating round of currency tensions is rightly being viewed by markets as “a race to debase,” which will ultimately do great damage to the world economy. This marked failure to continue coordinated action reflects two critical weaknesses that now must be taken seriously: an insufficient appreciation of the mix of post-crisis forces; and a growing void at the center of the international system.

Most Popular Articles

3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please