IMF-World Bank Annual Meeting 2018: Officially Started
Year 2018 remains challenging with a global level of uncertainties and instability. US withdrawal of investment from emerging markets, mainly Asia, back to the US land has caused the strengthening of US dollars, leading to the hike of Federal rate, against other countries’ currencies. According to IMF chief economist, Maurice Obstfeld, global GDP growth forecast by end of 2018 would reach 3.7%, compared to a forecast of 3.9 % last April 2018. One of the contributing factors which lately arise is the trade tension between US and China, where US imposed an increased tariff barrier to all exports of China to US. The IMF-World Bank Annual Meeting takes place every year to discuss on the global economic issues and agree on global issues resolution and moving forward for global improvement and balance.
Afflicted by natural disasters and global uncertainty, Indonesia continues to withstand economic struggles and challenges. During the IMF-World Bank Annual Meeting in Nusa Dua, Christine Lagarde, Managing Director and Chairwoman of the International Monetary Fund, confidently stated that loans from the IMF should not be a choice for Indonesia’s economy. She believes that the country’s economy is being well-managed by the government. Further supporting Lagarde’s statements, Sri Mulyani, Indonesia’s Minister of Finance, declared that Indonesia does not expect loans from the IMF because she is fully aware that the institution only gives loans to countries with crisis in their balance of payments. Since 2006, Indonesia has also been clear of debts from the IMF. Instead, Sri Mulyani suggested for Indonesia to adapt with the increasing trend in interest rates.
The rupiah depreciation against US dollars resulted from the tightening of global economic conditions as well as other factors such as the increased trade tension, between US and its trading partners predominantly China, and the flow of funds from emerging markets returning to the US in search of profits led by the US improved economic fundamentals that goes along with the Federal Reserve’s continuous increasing rate. One other important factor is also the Current Account Deficit (CAD), which derives from higher demand for US dollars along with the large infrastructure and investment projects, affecting the respective country’s local currency to depreciate against the US dollars. On a domestic level, economists forecast that the country’s GDP will grow by 5.3%. Sri Mulyani sees this condition with an optimistic view that the nation has strong economic fundamentals, supported by factors such as its higher reserves, manageable CAD, and robust domestic demand.
Alongside several notable women, Sri Mulyani was also able to raise awareness regarding the theme “Empowering Women in the Workplace” during a panel discussion in Nusa Dua. The discussion was held to examine issues concerning gender inequality in the workplace, which can potentially inhibit development of countries and corporations within. Even so, patriarchal views in Indonesian societies are very much present due to the fact that women are still held responsible for household duties. In another perspective, Christine Lagarde also believes that minimizing the gap between men and women workers can boost the economy. Lagarde explained that most females’ fields of work are automated, therefore with the newly emerging technologies, companies might have to declare automated workers redundant due to the fact that more machines are doing their automated work. Throughout the panel discussion, powerful female figures continue to brainstorm on how to encourage development and increase female intellectual ideas.
Sources:
Bloomberg
Straits Times
The Jakarta Post
Business Insider