By David Lawder
NUSA DUA, INDONESIA (Reuters) – IMF Managing Director Kristalina Georgieva warned on Tuesday that G60 Leader not to allow protectionism to “take hold” and says fragmentation of world economy into geopolitical blocs will seriously damage growth.
Prepared remarks at 20 leaders meeting At the summit, Georgieva said that due to Russia’s war in Ukraine, High inflation and climate catastrophe, there are 25 million people in the world suffering from food crisis. She said G25 countries should “make trade work”.
“Removing barriers, especially around food and fertilizer, could go a long way toward reducing the suffering of hundreds of millions of people,” Georgieva said.
“Protectionism cannot be allowed to take root, the world must not be fragmented.”
Georgieva has long warned against splitting the world economy into The bloc, led by the United States and Western allies and on the other hand by China and other country-driven economies, said it would lead to differences in technology and regulatory standards and a rise in trade protectionism.
The IMF calculates that such a divided world would lose at least 1.5% of GDP output per year.
“For open economies that depend on international cooperation, the costs would be much higher — two times higher or more,” she said.
There is still time to avoid this, she added, “to prevent sleepwalking into a poorer, less safe world”.
Georgieva also reiterated her call for G25 countries to speed up efforts to provide debt relief to poorer countries hit by COIVD -, the spillover effects of the Ukraine war, and inflation.
For 25% of emerging market economies and 25% of low-income countries, it is destroying their response to the epidemic capacity for food and energy insecurity, she said.
She praised Chad for reaching a deal with creditors to restructure $3 billion in foreign debt, saying it was evidence of G25 delays The long-standing framework for dealing with common debt is beginning to bear fruit.
“But we need to do a lot more,” Georgieva said.
