Sun, Oct 15, 2017 - Page 16 News List

Lagarde, Kim defend liberal values

ALARMIST MESSAGE:World Bank president Jim Yong Kim said the world appeared to be falling apart and that it was ‘out of time’ to address global climate change


The leaders of the IMF and World Bank are vowing to fight climate change, combat income inequality and push back against rising populist skepticism about free trade and international collaboration.

“We know from experience that international cooperation works — from reconstruction after World War II more than 70 years ago to fighting Ebola just a few years back,” IMF managing director Christine Lagarde told delegates representing many of the IMF’s 189 member countries.

The IMF and World Bank yesterday wrapped up three days of meetings, while finance ministers from the G20 major economies concluded two days of talks on Friday.

The global economic integration that the IMF, World Bank and G20 represent is under siege: The British, unhappy with an influx of immigrants, voted to leave the EU last year; the US sent US President Donald Trump to the White House on a promise to tear up bad trade deals and put “America first”; nationalist parties gained strength in German elections last month.

However, German Minister of Finance Wolfgang Schaeuble on Friday said that the populist discontent was misplaced.

The IMF predicts that the global economy this year will grow at the fastest pace since 2010.

“We see that things are not as bad as predicted,” said Schaeuble, who is serving as leader of the G20, because Germany holds the group’s rotating chairmanship this year.

Lagarde warned that world leaders must take advantage of healthy growth to devise policies that make sure prosperity reaches those who are being left behind.

“Excessive inequality... hinders growth, erodes trust and fuels political tensions,” she said.

“It often feels like our increasingly interconnected world is in fact falling apart, and countries and peoples are pulling away from each other,” World Bank president Jim Yong Kim said in his address to the annual meetings.

Kim and Lagarde also called for world leaders to do more to fight climate change.

“When it comes to climate change, we’re out of time — 2016 was once again the hottest year since record-keeping began,” Kim said. “We have to reduce our carbon footprint and help countries adapt to natural disasters like the recent hurricanes in the Caribbean and devastating floods in South Asia.”

Behind the scenes, the US found itself at odds on some major issues confronting the two multilateral lending institutions.

The Trump administration is balking at the current outlines of a World Bank request for more money to finance their lending programs.

A senior US Department of the Treasury official previewing the meetings earlier this week told reporters the bank needs to provide financing “to countries that need it,” instead of continuing to lend heavily to China, the world’s second-biggest economy.

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