DUBAI: The International Monetary Fund remains committed to helping countries that need support in the MENA region with financing of $33 billion, IMF’s Managing Director Kristalina Georgieva told the World Government Summit on Tuesday.
“Today the IMF is supporting over 50 vulnerable countries, half of them are in sub-Saharan Africa … more important is we help countries build the foundations to get on a better part,” Georgieva told the WGS during a session with Richard Quest, CNN correspondent and anchor.
“By the way, in this region, $33 billion, IMF is financing for countries that need that support,” she said.
When asked by Quest if she was concerned that inflation was going to resurge, the IMF’s top official said that there was a need to see how things evolved.
“If we are in a situation where in some parts of the world there is a slowdown that may push central banks to bring interest rates down, that actually may not be inflationary … there are many things that we don’t know, but what we do know is that we have a situation in which the US economy has been performing quite strongly and will likely continue to be strong and that pushes the dollar up,” Georgieva explained.
Addressing a packed hall during WGS’s first day, the IMF chief added that the US had outperformed the rest of the G20 members; the only economy to exceed its pre-pandemic trend.
“What does that mean? Capital is moving much more forcefully toward the US … before the pandemic many on the move went to many places, 18 percent went to the United States and today it is over 30 percent.
“So that is the foundation for a strong dollar, and a strong dollar all other things are equal for the majority of emerging markets and developing economies is trouble … so then we have inflationary impact,” she said.
The IMF sees a picture of a “remarkably resilient world economy despite a series of unprecedented shocks,” Georgieva said, elaborating that “we are projecting growth this year 3.3 percent and next year 3.3 percent.”
The Gulf countries were doing quite well, she said, but expressed more concern about “Europe, and some ... (places) are vulnerable emerging markets where they are doing less well.”
Another concern highlighted was “how the tremendous transformations that are happening in the world are integrated in countries’ policies.”
Taking AI as a case in point, Quest asked: “Do you see us having a good handle on the growth of new technologies?”
“So, we look at the front, what is happening with artificial intelligence? It can be a great story, a world that becomes more productive, or it can be a sad story, a world that is more divided … the haves have more, and the have-nots are completely lost.
“What we assess is that AI is already like a tsunami hitting the labor market in advanced economies … 60 percent of jobs over the next period of time will either enhance and become more productive, or transformed or eliminated,” she said.
Georgieva added that there was a need to recognize that “we are in a multipolar world” so cooperation as it used to be “before when we had a world with one country dominating” was going to be different.
“We still have one economy that is the strongest (the US) but we also have many economies, emerging market economies that are moving forward much faster, usually because of the 3 Ds; deregulate, digitize and diversify. These islands of excellence need to connect more, and we at the IMF are actually promoting more inter-region and cross-region collaboration. I think it is a moment to recognize our host (the UAE) because they are absolutely fantastic in working with everybody,” she said.
