At the IMF/World Bank Ministerial meetings in Washington, DC, the Treasurer highlighted that a successful conclusion of the Doha Round of multilateral trade liberalisation was the largest single positive factor that could boost the development of low-income countries, as well as be of major benefit to developed countries.
The Treasurer emphasised that trade barriers – among developing countries themselves, but particularly the harmful barriers that many developed economies impose on the exports of developing countries – subtract around $350 billion per year from developing countries’ potential income, as well as reducing the potential income of developed countries by about $150 billion.
The potential gains to low-income countries from a successful conclusion to the Doha Round is nearly five times greater than the total aid which developed countries give to low-income countries. Australia has called on the IMF and World Bank to increase their efforts in highlighting the benefits from trade liberation and the costs of protection.
It was agreed at the IMF meetings that the outlook for the global economy has strengthened and the IMF has revised up its forecasts for global growth. It was emphasised, however, that achieving a sustained period of global growth would require:
- all countries, including the major economies, achieving a sustainable medium-term fiscal position;
- using the opportunity of a strengthening in the international economic environment to push forward with structural reforms;
- focusing on the medium-term challenges many countries face from demographic changes;
- managing the adverse impact on activity of sustained high oil prices; and
- resisting protectionist pressures and advancing trade liberalisation.
The meetings also discussed the role of the Fund and Bank in the reconstruction of Iraq.