Milesi-Ferretti was speaking on the IMF’s World Economic Outlook October 2017 report, at a briefing hosted by the UJ College of business and economics on Monday.
The report indicated that emerging market and developing economies de- pendent on commodity exports would face weaker economic prospects than more diversified economies.
Milesi-Ferretti explained that com- modity pricing is one of the main driv-
ers of prospects in these commodity producing countries, which will hope- fully change if more diversified eco- nomic structures are introduced.
He explained that a lot of this de- pends on the “depth of pockets”. “Sau- di Arabia with a giant sovereign wealth fund, can be more aggressive in pursu- ing a strategy of that kind [beneficia- tion].
They have ambitious programmes to diversify the country.”
Diversifying economies is a medium- term challenge and cannot happen overnight, said Milesi-Ferretti.
These processes should also allow for market forces to “pick winners”. “Government is not always in the best position to decide what is tomorrow’s sector,” he said.