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Friday, June 9, 2023

Benefits of globalization ‘unfairly distributed’ – IMF

Governments should combine their efforts to boost international trade in an equitable way, Kristalina Georgieva says

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The globalization of the world economy has led to unfair distribution of wealth between countries and peoples, International Monetary Fund (IMF) Managing Director Kristalina Georgieva said on Thursday.

According to Georgieva, who was addressing the Boao Forum in China’s Hainan, countries should work together in order to stimulate international trade in an equitable way for more people to benefit from globalization. She also noted that global supply chains have to become more diverse and secure.

Read more: IMF issues warning on global economic stability

“We must recognize that the benefits of globalization are not shared fairly between countries and people,” the IMF chief said.

Georgieva cited IMF research showing that the long-term cost of trade fragmentation could be as high as 7% of global gross domestic product, and Asia would be the most adversely affected.

She called on countries in a relatively stronger position to help vulnerable nations, especially those under debt distress, claiming that such assistance would be particularly important against the backdrop of high-interest rates and currency depreciation.

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“We urgently need faster and more efficient global mechanisms for providing debt treatments to these countries,” Georgieva stated, adding that such mechanisms would significantly benefit both debtors and creditors.

Dubbed ‘East Davos’, the Boao economic forum was established in 2001 with the aim of improving cooperation among Asian countries, as well as strengthening their economic ties with other parts of the world. The forum provides a platform for dialogue between officials, entrepreneurs, experts and scientists on economic, social and other issues. The event, which kicked off on Tuesday in Hainan, will run until March 31.