Geopolitical tensions characterized the annual meetings of the International Monetary Fund (IMF) and the World Bank. So much so that, for the fourth consecutive year, the top advisory body failed to agree to issue a statement on the priority issues of members of the Washington-based body when it met this week in Marrakesh. The reason is that the members of the panel, including Russia and the USA, could not agree on a reference to the war in Ukraine. Instead, the president of the body and also acting first vice-president Nadia Calviño made a statement. “That wasn’t possible,” complained Calviño.
Since the outbreak of war in Ukraine, the International Monetary and Financial Committee has been unable to issue a joint statement. The IMF Advisory Board consists of 24 countries, which then report to the full plenary session. These include Russia, the USA, China, the United Kingdom, Germany, Spain and France. “We have done everything possible to reach a position,” said Calviño during his appearance alongside the organization’s executive director, Kristalina Georgieva.
The lack of a common note setting economic policy priorities highlights the extent to which geopolitical tensions are affecting the functioning of multilateral institutions. Just these days it has become clear that conflicts like the one in Ukraine and Israel are keeping the global economy in check at a very delicate moment, marked by the rise in the cost of debt that threatens the poorest economies and a process of world retreat into blocks. According to sources cited by Bloomberg, some European countries strongly rejected a statement that did not refer to the conflict in Ukraine.
Calviño, on the other hand, pointed to the major concerns that he said the members of the committee shared, including “preserving financial stability, reducing inflation and ensuring financial sustainability while protecting the most vulnerable.” In addition, the Spanish Vice President stated that there was an agreement for a “significant increase” in quotas, but it could not be concluded at these meetings and would be finalized by December.
According to the sources consulted, the pact would in any case involve an increase in the amount linked to the quotas, without changing them so far. There is no agreement there. China, which has 6% of the voting power but accounts for 18% of the global economy, is calling for its power in the IMF to be strengthened. And the new ones also ask for passage. However, the United States does not want to lose its current quota of more than 15%, which gives it veto power.
The Spanish Vice President will leave this office next December. Calviño emphasized that “it has been a challenging two years as Chairman of the Committee, marked by Russia’s terrible aggression against Ukraine, the outbreak of the pandemic, the challenges posed by high energy and food levels and high raw material prices Inflation, rising interest rates and debt vulnerability.” However, the vice president also highlighted the measures taken in the last two years, such as the Food Crisis Window in response to the fragility of the poorest countries after the war in Ukraine, the Resilience and Sustainability Fund and the Fund for Growth and Poverty Reduction.
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