The Group of 24, a chapter of the G77 made up of developing countries, said that emerging markets and developing countries (EMDCs) remain the key drivers for global growth, despite earlier comments by an IMF official that the slowdown will hit developing countries.
Maurice Obstfeld, IMF research director, had said during the meetings held 8-11 October in Peru that the global economic slowdown is expected to hit developing countries soon on the back of falling commodity prices.
The G24 acknowledged that downside risks have risen for many of its members, including tightening financial conditions, reduced capital flows, and persistent low commodity prices.
But the group called for "effective and well-sequenced policy that is adequately communicated to guard against potential financial instability risks, including those coming from normalisation of US monetary policy."
The group also stressed the importance of a more inclusive SDR basket and look forward to the completion of the work of the International Monetary Fund (IMF) on the method of valuation in view of recent changes in the economic weights in global trade and financial flows.
The Intergovernmental Group of Twenty-Four on International Monetary Affairs and Development also said that EMDCs are disproportionately affected by the influx of refugees and internally displaced populations, including as a result of terrorism and conflicts.
During their meeting they therefore called for strong and timely support from the international community to alleviate their impact, and for enhanced support, including through concessional financing from international financial institutions.
The group expressed its concern about the adverse impacts of illicit financial flows (IFFs) and harmful tax avoidances, especially by multi-national firms, on the sustainability of public finances, particularly in African countries. "We consider policies that combat IFFs as vital to raising revenues," said representatives of the group.
The group also reiterated their deep disappointment with the lack of progress in implementing the IMF quota and governance reforms agreed to in 2010 and strongly urged the US to complete ratification.
This remains an impediment to IMF credibility, legitimacy, and effectiveness and has considerably delayed forward-looking commitments, namely, a new quota formula and the 15th General Review of Quotas, the group said.
"Implementing the 2010 reforms remains our key priority", the group said.
Nevertheless, they believe that a decision to de-link quota reform from the board reform amendment, which is the element of the 2010 reforms that requires ratification by the US Congress, would be the preferred option in the interim, as it increases IMF resources and also realigns quotas to reflect the increased economic weight of EMDCs.