Lew Urges Emerging Economies to Reduce Obstacles to Growth

U.S. Treasury Secretary Jacob J. Lew urged emerging markets to reduce obstacles to growth as economic conditions improve in most developed countries.

“Emerging markets need to make reforms that increase their resilience and address structural constraints to growth,” Lew said in testimony prepared for a hearing tomorrow before the House Financial Services Committee. Japan has taken “forceful action to begin ending deflation, but to achieve sustained success Japan needs to undertake structural reforms to strengthen domestic demand growth,” he said.

Lew also urged Congress to approve a plan on the International Monetary Fund’s lending capacity that tries to make good on a pledge made in 2010. The agreement among IMF member nations would double the amount the IMF has readily available for lending.

The Obama administration is seeking to boost the U.S.’s share, or quota, at the Washington-based IMF by shifting about $63 billion from an existing credit line. The hearing is the Treasury secretary’s annual testimony on the international finance system.

The IMF’s “quota and governance reforms are a good deal for the United States and the global economy,” Lew said in the prepared testimony, which was obtained by Bloomberg. The hearing is scheduled for 9:30 a.m. tomorrow.

Treasury spokeswoman Holly Shulman declined to comment.

“There are signs that economic conditions are improving in most advanced economies, led by the United States,” he said.

Lew also said China’s new leadership has made “bold commitments to reform. The pace and character of these reforms will shape China’s economic transition toward domestic consumption led growth, and away from resource-intensive export growth.”

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