IMF urges countries to boost welcome to refugees

IMF urges countries to boost welcome to refugees

WASHINGTON - Agence France-Presse
IMF urges countries to boost welcome to refugees

AP photo

The International Monetary Fund urged countries to expand their welcome for the massive flood of refugees in recent years.

In a pointed message ahead of this weekend’s summit of Group of 20 major economies in Turkey, IMF chief Christine Lagarde said that the surge of refugees to historic highs in the last few years, whether by people fleeing armed conflict or economic distress, would likely increase in the near future.

“Some countries have been willing to receive large flows of refugees and done their utmost to provide them with food and shelter,” Lagarde said on Nov. 11 in a blog post on the IMF website.

“Others, especially among the advanced countries, should look at how they might increase their scope for admitting more refugees.”    

Lagarde’s comment came as European Union and African leaders met in a summit in Malta to tackle the biggest flow of refugees and migrants since World War II, which has opened up divisions in the 28-nation European bloc.

“Migrants can boost a country’s labor force, encourage investment and boost growth,” she said. “Preliminary IMF calculations show a modest positive impact on growth from migrants in EU countries, for example.”

Migration also can help address the challenges of aging populations in a number of advanced economies and help reduce pressures on pension and health care spending, she said.

By contrast, she said, countries experiencing migrant outflows are often losing their youngest and brightest people.

But that potential hit to growth is offset by remittances from migrants to developing countries, which in 2014 amounted to $436 billion, more than three times as much as official development assistance, Lagarde said.

“We should strongly support the G-20’s commitment to reduce remittance transaction costs,” said the IMF leader, who is scheduled to attend the two-day G-20 summit in Antalya that begins on Nov. 15.

Fed ‘should wait’

The IMF also said on Nov. 12 that the U.S. Federal Reserve (Fed) should delay raising interest rates until there are clear signs of a pickup in inflation.

In a report on global economic issues prepared for the November 15-16 Group of 20 summit in Antalya, Turkey, the IMF singled out the prospect of higher US rates as a particular challenge to the slow-growing world economy.

In many advanced economies, it said, monetary policy “must remain accommodative, including through unconventional measures, to reduce risks to activity from low inflation and prolonged weak demand.”  

For the Fed, which could begin raising rates in December after holding the benchmark federal funds rate near zero since the end of 2008, the IMF urged waiting until it is clear that the downward pressure on inflation is past.