Abstract
IN AN ARTICLE IN Foreign Affairs, IMF Managing Director Kristalina Georgieva issues a stark warning about the decline of international cooperation. A series of shocks have exposed the fragility of the global economy. Yet, at a time when cooperation is critical, the world is witnessing increasing fragmentation, which could end with nations breaking into rival economic blocs. In a shock-prone world, economies need to become more resilient—individually and collectively. The international community should pursue targeted progress where common ground exists and maintain collaboration in areas where inaction would be devastating. It will be crucial to shore up the global financial safety net and ensure international institutions such as the IMF are adequately resourced.
The Price of Fragmentation
IN AN ARTICLE IN Foreign Affairs, IMF Managing Director Kristalina Georgieva issues a stark warning about the decline of international cooperation. A series of shocks have exposed the fragility of the global economy. Yet, at a time when cooperation is critical, the world is witnessing increasing fragmentation, which could end with nations breaking into rival economic blocs. In a shock-prone world, economies need to become more resilient—individually and collectively. The international community should pursue targeted progress where common ground exists and maintain collaboration in areas where inaction would be devastating. It will be crucial to shore up the global financial safety net and ensure international institutions such as the IMF are adequately resourced.
“Policymakers need to focus on the issues that matter most not only to the wealth of nations but also to the economic well-being of ordinary people,” writes Georgieva. “They must nurture the bonds of trust among countries wherever possible so they can quickly step up cooperation when the next major shock comes.”
“Protectionism and decoupling come at a cost.”
—Kristalina Georgieva, Foreign Affairs September/October 2023
Overheard
“While low inflation may seem elusive, it is certainly no stranger, and central bank actions can deliver it. Unlike the characters in Godot, we are not waiting for a potential stranger to arrive; we are inviting an old friend to return.”
—IMF First Deputy Managing Director Gita Gopinath at the European Central Bank Forum on Central Banking 2023.
“International financial institutions must be the world’s apolitical institutional memory. They must keep reminding the global community of unresolved challenges before shifting resources to the crisis du jour. The international community should not abandon the Syrian refugees residing in Jordan just because headlines turn attention elsewhere.”
—Mohamad Al-Ississ, finance minister of Jordan (page 12, this issue of F&D).
AROUND AND ABOUT: IMF Managing Director Kristalina Georgieva (at right) pays a visit to the Noor Ouarzazate Solar Power Plant in Ouarzazate, Morocco. The largest concentrated solar power farm in the world, the complex is the cornerstone of Morocco’s strategy to invest in renewable energy. Over 85 percent of the country’s electricity could be generated from renewable sources by 2050, according to the World Bank. IMF Photo/ Kim Haughton.
By the numbers
Citation: Finance & Development 60, 003; 10.5089/9798400250804.022.A002
SOURCE: World Bank, World Development Indicators 2022 (estimates modeled by ILO).NOTE: MENA here includes low- and middle-income countries only. YOUTH = ages 15–24.By the numbers
Citation: Finance & Development 60, 003; 10.5089/9798400250804.022.A002
SOURCE: World Bank, World Development Indicators 2022 (estimates modeled by ILO).NOTE: MENA here includes low- and middle-income countries only. YOUTH = ages 15–24.By the numbers
Citation: Finance & Development 60, 003; 10.5089/9798400250804.022.A002
SOURCE: World Bank, World Development Indicators 2022 (estimates modeled by ILO).NOTE: MENA here includes low- and middle-income countries only. YOUTH = ages 15–24.
