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International Monetary Fund
IMF, World Bank hold meetings in Morocco weeks after devastating quake
The financial international institutions are holding a summit in the earthquake-hit North African country.A member of security stands guard at the entrance of the venue hosting the 2023 IMF and World Bank annual meetings in Marrakesh [Fadel Senna/AFP] .The International Monetary Fund (IMF) and the World Bank are gathering in Morocco, weeks after a powerful earthquake killed nearly 3,000 people and threatened to derail the event.The global lenders traditionally hold their annual gathering of finance ministers and central bank governors outside their Washington headquarters every three years. This is the first meeting on African soil in 50 years.
The southern Moroccan city of Marrakesh was supposed to host Monday’s gathering in 2021, but the meeting was postponed twice because of the COVID pandemic.“A prosperous world economy in the 21st century requires a prosperous Africa,” IMF Managing Director Kristalina Georgieva said in a speech in Abidjan last week.In a symbolic move, the IMF and World Bank are poised to give Africa a third seat on their executive boards, which Georgieva said would give the continent a “stronger voice”.
Developing economies hit by shocks
However, the thorniest issues revolve around money as developing economies strive to deal with recent global shocks, such as the COVID pandemic, widespread disasters and rising energy and food costs spurred by the war in Ukraine.The main contributors are not in favour of a capital increase as it would force them to put up more funds and would give greater influence to emerging powers such as China and India.The World Bank, however, is expected to confirm plans to boost lending by $50bn over the next decade through balance sheet changes.
Morocco After the Quake
World Bank President Ajay Banga wants to go even further and raise capacity by $100bn or as much as $125bn through contributions from advanced economies.The lenders may use the meetings to reform their quota systems.The quotas, which are based on a country’s economic performance, determine how much funding they should provide to the IMF, their voting power and the maximum amount of loans they can obtain.
In the aftermath of the earthquake in Morocco, the IMF approved a $1.3bn loan to “help strengthen its preparedness and resilience against natural disasters”.Morocco is a longtime borrower who has used loans and credit to weather economic downturns, including most recently when the pandemic hit tourism and exports particularly hard.The institution has pushed Morocco to balance its budget and continue raising interest rates.
Activists plan to hold a march in Marrakesh to urge the institutions to take bold steps against climate change and debt.The Kenya-based Oxfam organisation says 57 percent of the world’s poorest countries have to cut public spending by a total of $229bn over the next five years.
SOURCE: NEWS AGENCIES