Lagarde urges Arab world to boost public investment

13 May 14
The Arab world should increase public investment to create jobs and boost economic growth and fairness, the head of the International Monetary Fund said yesterday

Addressing a high-level conference in the Jordanian capital Amman, Christine Lagarde said it was very important to improve the composition of government spending in the region to achieve more fairness, more efficiency, and ultimately more inclusive growth. 

‘In this context, I strongly concur with you that there is a need to find resources to boost public investment,’ Lagarde told delegates at the Building the future conference, which was convened by the IMF, the Arab Fund for Economic and Social Development and the government of Jordan.

‘Let me say as well that I was very happy to hear [the] strong voices... that called for building strong targeted safety nets and for phasing out expensive and inefficient generalised subsidies. I have no doubt that these reforms will be difficult. But I am confident that they can be achieved if explained well and done gradually.’

Also more transparency and better governance in both the public and the private sector will depend on civil society, including genuine and better representation of youth and women, Lagarde added. 

‘Let me be clear here: sustainable development will not be possible without phasing out corruption and the rent seekers’ economy,’ she continued.

Creating more employment for young people was of paramount importance, she said but acknowledged that the task would require a comprehensive approach that involved reforms in many areas.

She said that it would include redefining the role of the state from that of an employer to an enabler for the private sector, creating education systems that provide bridges to employment, redesigning labour market regulations and establishing a business climate conducive to greater competitiveness. 

‘As we leave Amman, we have to scale up what many governments are already doing, and do so in a big way and with urgency,’ she said. 

‘The challenges in the region don’t allow for complacency.’

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