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The International Monetary Fund (IMF) head, Christine Lagarde, has warned the
global economic crisis has started to hurt growth in emerging economies.
She said that uncertainty surrounding the global economy was hampering
policymakers' ability to take measures to boost growth.
Earlier this week, the IMF warned that the global economic recovery was getting
weaker.
The fund has also cut its global growth forecast amid the ongoing crisis.
Separately, the World Bank has cut its forecast for major Asian economies,
including China and India, citing global risks.
"Whether you turn to Europe, to the United States of America, to other places
as well, there is a level of uncertainty that is hampering decision makers from
investing, from creating jobs," Ms Lagarde said during a press conference in
Tokyo.
"We need action to lift the veil of uncertainty."
Delayed recovery?
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Good news is the fact that this European Stability Mechanism that had been
discussed and in the making for the last months has now been christened
Christine Lagarde IMF
One of the key concerns among policymakers across the globe has been the
ongoing debt crisis in the eurozone and its impact on global growth.
The crisis has dented consumer confidence in the region and hurt growth in the
bloc's economies.
That has already had an impact on demand for exports from Asia to the region,
hurting growth in export-dependent countries such as China, Japan and South
Korea.
Ms Lagarde, who was speaking in Tokyo on the eve of the annual joint meeting of
the IMF and the World Bank, said that while eurozone policymakers had taken
measures to allay fears about the crisis worsening, a fast recovery was not on
the cards.
"Good news is the fact that this European Stability Mechanism that had been
discussed and in the making for the last months has now been christened," she
said.
"In terms of speed, the bad news is that for it to actually operate there will
be a legislative and often parliamentary process for the fund to effectively
work."
Closer ties
The meeting is taking place at a time of increased political tensions between
Asia's two biggest economies, China and Japan.
Relations between the two have deteriorated in recent weeks after Japan said it
had purchased a set of disputed islands in the East China Sea, which are
claimed by both the countries as well as Taiwan.
Lagarde: "We hope that differences, however long-standing, can be resolved"
The islands lie in important shipping lanes and fishing grounds and also close
to waters thought to contain natural resources.
Japan's announcement of its purchase of the islands in September had sparked a
diplomatic row and led to anti-Japan protests in China.
On Wednesday, the governor of China's central bank pulled out of the IMF and
World Bank meetings.
The country's finance minister is also unlikely to go, as state media said that
Vice-Minister Zhu Guangyao would attend.
Ms Lagarde called upon the two nations to resolve their differences.
"All economic players and partners in this region are very critical for the
global economy," she said.
"We hope that differences, however long-standing, can be resolved harmoniously
and expeditiously so that from an economic point of view the co-operation can
continue and can be beneficial not only to those countries... but also to the
global economy."