Speaking at a meeting of the International Labour Organization yesterday, Dominique Strauss-Kahn called for increased co-operation between the IMF and ILO, warning of the dire consequences of allowing the crisis to develop into a “wasteland of unemployment”.
He said the international economy could start to recover in 2010, but this is dependent on bold policy decisions, reiterating his call for a global fiscal stimulus of 2 per cent of international GDP.
Strauss-Kahn warned that there are particular dangers in emerging economies, that have been dependent on the international community for capital.
He said:“IMF support in this case is not enough.
“These countries need to rebuild their model and learn to live with less capital inflow. Financial help alone without a change of policy is not useful.”
He said that poor countries not only face the risk of unemployment and social unrest, but also threats to democracy and even war.