First impressions from the IMF-WBG Meetings
I arrived in Washington D.C. on the evening of April 13 for the 2015 Spring Meetings of the World Bank Group and the International Monetary Fund.
There were no major events on April 14, so I used the day to meet up with friends as well as pay a visit to my friend and editor Esther, who lies next to her grandmother just north of the capital. As I am writing this column very early on April 16, I have been to only a couple of events so far- and so cannot relay my impressions yet. I can, however, summarize the agenda.
The timing of the Federal Reserve’s rate hikes and its impact on the global economy are in everyone’s mind. The IMF seems to be rather worried - but interestingly it is relatively sanguine on Turkey: During the press conference for their latest World Economic Outlook report, the Fund’s chief economist Olivier Blanchard outlined how the country could be affected:
“On the one hand, clearly U.S. rates are going to be more attractive to go from Turkey to the U.S., but the very low euro rates are going to make it more attractive to go from the euro to Turkey. So, what happens to Turkey depends on what determines the capital flows to Turkey, whether they are more sensitive to the euro or more sensitive to the dollar.”
The only other country probably getting as much attention as the U.S. is Greece: With German Finance Minister Wolfgang Schäuble having all but ruled out a deal next week, which would have released bailout funds to the Hellenic Republic, all eyes will be on his speech at the Brookings Institution on April 16 - as well as on his Greek counterpart Yanis Varoufakis’ right afterward in the same auditorium. Neither minces his words, so it should be fun.
There are two other countries in the headlines. Many are wondering how China’s Asian Infrastructure Investment Bank could affect the IMF and the World Bank, especially since BRICS officials are expected to discuss another institution geared towards development lending as well as a crisis lending arrangement.
Former U.S. Secretary of State Madeleine Albright devoted the majority of her remarks before the opening reception of Bertelsmann Foundation’s annual conference on April 15 to Ukraine. While she concentrated on the geopolitical risk aspect, the restructuring of the country’s sovereign debt is a major item on the agenda.
Academic economists, on the other hand, are still busy “Rethinking Macro.” The subtitle of the one and a half day of seminars on April 15 and 16 sums up the situation quite well: “Progress or Confusion.” I watched the first three sessions; it looks more like the latter. The IMF organized similar events back in 2011 and 2013, so let’s hope we’ll have the former in 2017.
Last but not the least, there is a very strong Turkish presence at the Spring Meetings this year: In line with Turkey’s G20 Presidency, the Union of Chambers and Commodity Exchanges of Turkey (TOBB) and the Economic Policy Research Foundation of Turkey (TEPAV), who are leading the business and think-tank arms of the G20, are holding two large events on April 16 and 17.
In my next column on April 20, I will sum up my impressions of all these meetings as well as the investor conferences of a couple of investment banks.