Economic global damage has been primarily concentrated in or near the combat zones: Gaza, the West Bank, Israel, Lebanon, Egypt, and Jordan
Global finance executives will gather in Washington this week amid severe anxiety over wars in the Middle East and Europe, a weakening Chinese economy, and fears that a coin-toss US presidential election may trigger new trade battles and harm multilateral cooperation.
To discuss efforts in order to boost patchy global growth, deal with debt distress and finance the green energy transition, the International Monetary Fund (IMF) and World Bank annual meetings are put in place to draw more than 10,000 people from central banks, finance ministries and civil society groups.
Although the most important topic of discussion could be the potential victory of Donald Trump, the US Republican presidential election to reverse the international economic system with the new massive tariffs and borrowing and a shift away from climate cooperation.
Josh Lipsky, a former IMF official who now heads the Atlantic Council’s Geo Economics Center said that in argument the utmost important issue for the global economy would be the outcome of the US election. Although this is not an official agenda but is a thing in the people’s minds.
He further added that the election hugely impacts trade policy on the future of the dollar. The question arises on who the next federal Reserve chair is going to be and the ones that impact every country in the world.
The Democratic presidential candidate and the current US Vice President, Kamala Harris is expected to take the Biden administration’s resumption of multilateral cooperation on climate forward. This may include debt relief issues and tax if she bags the win in the next month’s vote.
Likely to be the last meeting for the US Treasury Secretary Janet Yellen which will begin on Monday will get into full swing later in the same week. Janet Yellen spearheaded much of the Biden administration’s multilateral economic and climate efforts.
However, growing anti-China trade sentiment and industrial policy intentions from wealthy countries, exemplified by the Biden administration’s significant tariff increases on Chinese electric vehicles, semiconductors, and solar panels, are expected to be a major debate point during the summits.
As global finance leaders convene, the focus will be on addressing the pressing global challenges that threaten economic stability. The outcomes of these meetings will significantly influence global policies, especially as nations grapple with the complexities of trade and climate cooperation. Ultimately, fostering a cohesive global approach is essential for overcoming the intertwined crises facing economies worldwide.
A lackluster outlook was flagged last week by the Managing Director of IMF, Kristalina Georgieva stated that the world which is burdened by high debts was moving towards slow medium-term growth and pointing to a highly difficult future. Although Georgieva stated that she was not pessimistic on the outcome given the pockets of resilience notably in the U.S. and India that are offsetting continued weakness in China and Europe.
While loan defaults in poor nations may have peaked, attendees at the annual meetings are expected to tackle the rising issue of insufficient cash, which is causing some developing markets saddled with high debt payment costs to postpone development investments as external help declines.
The IMF and World Bank annual meeting held last year got underway in Morocco as the militant group Hamas of Palestine attacked Israel. The killings of more than 1200 people has led to unleashing conflicts with a death toll of more than 40,000 Gazans, according to Palestinian health authorities.
Economic global damage has been primarily concentrated in or near the combat zones: Gaza, the West Bank, Israel, Lebanon, Egypt, and Jordan.
One of the other major topics at the meetings is support for Ukraine as the wealthy G7 democracies aim to reach a political agreement by the end of October. This has created a new tab for loans totaling $50 billion to the Eastern European country, which are guaranteed by frozen Russian government assets. The loan is seen as a financial buffer against Trump’s victory next month, as the former US president has threatened to “get out of Ukraine.”
The World Bank and IMF officials intend to concentrate on the work at hand at the meetings which therefore coincide with the 80th anniversary of the institutions’ founding in 1944 at Bretton Woods, New Hampshire.
For World Bank President Ajay Banga, this entails finding ways to accelerate project preparations to take advantage of the bank’s greater lending capacity, as well as refining a new scorecard to improve development outcomes.