Geopolitical tensions have marked the annual meetings of the International Monetary Fund (IMF) and the World Bank. To the point that, for the fourth consecutive time, its highest advisory body has been unable to reach an agreement to issue a statement on the priority issues of the members of the Washington-based institution during its meeting this week in Marrakesh. The reason is that the members of the body, including Russia and the United States, were unable to agree on a reference to the war in Ukraine. Instead, a statement was issued by the president of the body, also acting first vice president, Nadia Calviño. “It was not possible,” Calviño lamented.
Since the outbreak of the war in Ukraine, the International Monetary and Financial Committee has not been able to issue a joint statement. The IMF advisory body is made up of 24 countries that then report to the entire plenary. Among them are Russia, the United States, China, the United Kingdom, Germany, Spain or France. “We have done everything possible to reach a statement,” said Calviño in his appearance alongside the organization’s managing director, Kristalina Georgieva.
The lack of a joint note that sets economic policy priorities highlights the extent to which geopolitical tensions are permeating the functioning of multilateral institutions. Precisely, during these days it has been highlighted that conflicts such as that of Ukraine and Israel put the world economy in check at a very delicate moment, marked by the increase in the costs of debt, which threatens the most impoverished economies, and a process of withdrawal of the world into blocks. According to sources cited by Bloombergsome European countries rejected a statement that did not refer to the conflict in Ukraine with the necessary harshness.
Calviño, on the other hand, proceeded to cite the major concerns that, he said, the members of the committee do share, among them, “safeguarding financial stability, reducing inflation and guaranteeing fiscal sustainability, while protecting the most vulnerable.” . Furthermore, the Spanish vice president stated that there was an agreement for a “significant increase” in quotas, although it could not be closed during these meetings and will be finalized between now and December.
The pact, according to sources consulted, would in any case be about increasing the amount associated with the quotas, without modifying them yet. There is no agreement there. China, which has 6% of voting rights but accounts for 18% of the world economy, is asking to increase its power in the IMF. And the emerging ones are also asking for passage. The United States, however, does not want to lose its current quota of more than 15%, which gives it the right to veto.
The Spanish vice president leaves this position next December. Calviño highlighted that it has been “two challenging years to chair the committee, marked by Russia’s terrible aggression against Ukraine, the emergence of the pandemic, the challenges derived from the high level of energy and food and the high prices of raw materials, inflation, rising interest rates and debt vulnerabilities.” However, the vice president has also highlighted measures adopted in the last two years, such as the Food Crisis Window in response to the fragility of the most impoverished countries after the war in Ukraine, the Fund for Resilience and Sustainability and the Fund for Growth and Poverty Reduction.
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