By Asmau Ahmad
The World Bank and International Monetary Fund (IMF), have restated their commitments to ensuring equitable global development.
The institutions made the pledge in a joint statement by Kristalina Georgieva, Managing Director of the IMF, and Ajay Banga, President of the World Bank.
They noted that the world was confronted with significant economic challenges, existential threat of climate change and digital transition.
According to them, these challenges are manifested in frequent shocks, high debt levels, limited policy space in many countries and rising geopolitical tensions.
As such, they said well-designed and appropriately sequenced policies were critical to help accelerate growth, alleviate policy trade-offs, and support the green and digital transitions.
Georgieva and Banga explained that both the World Bank and IMF had a critical role to play in helping member countries to address the challenges and leverage opportunities, working closely together and with partners.
“The world confronts major transformational challenges and more frequent shocks at a time of rising economic and geopolitical tensions.
“Growth in the world economy has slowed, with the medium-term outlook at its weakest in over three decades. Progress in poverty reduction has come to a halt. Conflict and fragility are on the rise.
“The world is facing geo-economic fragmentation, extreme natural disasters exacerbated by climate change, and increasing levels of public debt.
“Rapid digitalisation and technological transformations create new challenges, but also opportunities.
“With well-designed and appropriately sequenced reforms, the digital and green transitions can bring tremendous economic, social and environmental gains, and add to welfare and prosperity,” they said.
The global economic leaders said the Bretton Woods institutions, with their universal membership and specialist expertise, are well placed to make a critical contribution to help countries tackle these challenges.
According to them, the challenges are too great for individual actors to address.
They said international financial institutions, governments, philanthropic foundations, as well as the private sector, must work together.
They said the Fund and the bank, working jointly, could play a key catalytic role in this broader collective effort, as they did in the past.
The Bretton Woods institutions were established in 1944 to help rebuild a world economy, devastated by global depression and war.
As the world economy has changed over the past 80 years, the bank and the Fund have continued to adapt and work closely together to serve their members’ needs.
They said: “We are committed to enhancing our collaboration to deliver tangible benefits for people, businesses, and institutions of our member countries.
“We will do so by drawing on our respective mandates and expertise, the World Bank’s diverse skills and experience, including on sustainable growth and structural transformation and its significant footprint in client countries.
“The Fund with its capabilities to support macroeconomic and financial stability, and promote economic conditions conducive to growth and sustainability.
“We will coordinate closely our global, regional, and country level engagements to ensure that our resources are deployed efficiently and effectively, driven by a focus on results for our members.
“We will do so by building on our long history of joint action and collaboration frameworks. Past efforts have resulted in strengthened coordination of policy advice to countries and the establishment of joint programmes and initiatives.
“Examples include our joint assessments of financial sector soundness in emerging markets and developing economies and of debt sustainability in low-income countries.
“Also, broader collaboration frameworks, such as the 1989 Concordat and the 2007 Joint Management Action Plan.
“Today, we need to enhance further our collaboration, in particular with regards to climate change, renewed high debt vulnerabilities, and digital transition.”