U.S., WASHINGTON, April 17. Most emerging markets need adoption of innovation in order to close the gap with developed countries, Era Dabla-Norris, Deputy Director in the IMF's Fiscal Affairs Department, said during a briefing on the Fiscal Monitor held as part of the IMF Spring Meetings in Washington, Trend reports.
"Productivity growth has been declining also for emerging market economies. The convergence gap between emerging market economies and advanced economies won't close that easy and could widen. What are the types of policies that are needed? In terms of the fiscal monitor, we talked about the importance of getting your fiscal policy in order to be able to pay for the needed public investments, to achieve sustainable development goals. There are a lot of structural reforms that countries need. In the Fiscal Monitor we also talk about one very important component, the innovation, and specifically technology adoption. For most emerging markets and developing countries, technology, diffusion or the adoption of innovation is absolutely critical in order to boost their own productivity growth and their longer-term growth prospects as well," she said.
Era Dabla-Norris noted that if emerging market economies were to increase their spending on education by one percentage points of GDP, this would allow for a faster transfer of technology, adoption and assimilation of technology from abroad and it could boost GDP by about 2 percent over the medium term, which is quite a sizable number.
"This can be an important way for them to close sort of skills gap in the digital domain. We also talked about the importance of improving infrastructure quality," she added.
Countries will also need to look out on the tax side of things and mobilizing revenues in an efficient way to pay up for these productive investments.
The Spring Meetings of the International Monetary Fund and the World Bank Group kicked off on April 15.
The main ministerial meetings and events will take place April 17-19 with other events and activities taking place during the week, April 15-20.
At the heart of the gathering are meetings of the joint Development Committee and the IMF's International Monetary and Financial Committee, which discuss progress on the work of the World Bank Group and the IMF.
The Spring Meetings bring together central bankers, ministers of finance and development, parliamentarians, private sector executives, representatives from civil society organizations and academics to discuss issues of global concern, including the world economic outlook, poverty eradication, economic development, and aid effectiveness.