WASHINGTON (Arête News) — World Bank and International Monetary Fund leaders called on 189 member nations on Friday for help in easing trade and geopolitical tensions that are rattling a slowing global economy and undercutting anti-poverty efforts.
The World Bank’s president, David Malpass, said the slowing global growth was compromising the work of encouraging developing economies and of lifting 700 million people out of extreme poverty around the world.
“Global growth has slowed; investment rates in developing countries aren’t sufficient to meet development needs; health systems, learning outcomes and technology are falling further behind needs; climate changes and extreme weather are taking a heavy toll; for some countries, populations are expanding much faster than resources and capacity; and many countries are facing fragility, conflict and violence, making development even more urgent and difficult,” Malpass said in a speech to the plenary session.
“The result,” he said, “is that several countries are facing rising poverty rates and falling median incomes, the opposite of our mission.” The World Bank is the biggest intergovernmental source of low-cost loans for international development. The IMF stabilizes the world’s monetary system and provides emergency loans for nations to weather economic crises.
Both were set up to rebuild postwar Europe and promote international cooperation at a U.S.-led meeting of 43 nations at Bretton Woods, New Hampshire in July 1944. Since that time, and particularly this century, their missions have shifted to focus more on development and poverty. In an era of rising anti-immigration populist rhetoric, their work notably also includes helping stabilize countries experiencing a flood of refugees escaping regional conflicts.
“In this process, countries need to provide strong leadership to choose a path that works economically, socially and politically,” Malpass said. “It’s clear that the quality of policies and institutions plays a key role in explaining why some developing countries have been able to make the leap out of poverty, while others have been unable to advance. It’s also clear that development cannot be imposed from outside — country leadership and ownership matter.”
.@KGeorgieva during the 2019 Annual #IMFmeetings plenary: The goal should be to move from trade truce to trade peace and build a better trade system, one that is fairer, more innovative, more inclusive. https://t.co/qXFPzjeIyM pic.twitter.com/pazE2GLr7l
— IMF (@IMFNews) October 18, 2019
‘Need to step up cooperation’
The World Bank and IMF annual meetings this week have been overshadowed by the U.S.-China trade war that began in 2018 when U.S. President Donald Trump raised tariffs and other trade barriers in the name of increasing America’s manufacturing jobs and lowering its massive trade deficits. His actions led to retaliatory tariffs from China and other nations, with serious negative impacts on the U.S. and other economies.
The IMF cut its forecast for the global economy’s growth rate down to 3 percent for 2019, the lowest rate since the beginning of the decade. The IMF’s managing director, Kristalina Georgieva, attributed the weakness in the global economy to the trade war between the world’s two biggest economies, weakness in Europe’s economy linked to Britain’s planned divorce from the European Union and rising tensions in the Middle East.
“Yes, the global economy is still growing — but too slowly. This is partly because trade tensions are now taking a toll on business confidence and investment. Add to this increased uncertainty — from Brexit to geopolitical tensions — and a further drag on growth from demographic pressures and record-high debt levels,” Georgieva said in her opening address to the plenary session.
“This all spells a troubling medium-term outlook, especially in countries already facing difficulties, including some of the fund’s program countries,” she said. “We estimate that 45 developing countries, a total of nearly 1 billion people, will grow more slowly in per capita terms than the advanced world. Instead of catching up, those countries are set to fall further behind. To meet this challenge, we need to step up cooperation within and across borders.”