The World Bank and the IMF strengthen their collaboration to face the high debt and the climate crisis

MADRID, 7 Sep.

The World Bank and the IMF strengthen their collaboration to face the high debt and the climate crisis


The managing director of the International Monetary Fund (IMF), Kristalina Georgieva, and the president of the World Bank, Ajay Banga, issued a joint statement this Thursday in which they announced the strengthening of collaboration between the two organizations in light of global challenges such as climate change, the digital transition or high levels of debt.

"The growth of the global economy has slowed and the medium-term outlook is the weakest in more than three decades. Progress in reducing poverty has stalled. Conflict and fragility are on the rise," they stated. in an x-ray of the state of the world.

Both organizations have agreed that, in addition, the planet faces challenges such as geoeconomic fragmentation, extreme natural catastrophes exacerbated by climate change and increasing levels of public debt. On the other hand, digitization and technological transformations "create new challenges, but also opportunities."

Consequently, the organizations that emerged from Bretton Woods have indicated that they have a "critical role" to play in helping different nations overcome these difficulties, which will require "well-designed and appropriately interwoven policies" that relaunch growth and support the digital and green transition.

"We are committed to improving our collaboration to offer tangible benefits to the people, companies and institutions of our member countries," both stated, for which they will make their "experience" available to the states.

Thus, the World Bank and the IMF will "foster complementarity and synergies" in their respective work on climate change and will formalize the meetings of the Bank-Climate Fund Consultative Group aimed at addressing this problem. These meetings will meet every two months.

Likewise, "climate considerations" will be incorporated into their debt sustainability analyses, but the Debt Sustainability Framework for Low Income Countries will also be strengthened. Likewise, support for debtors and creditors in ongoing debt restructuring processes will be "deepened."

On the other hand, the two multilateral institutions have pointed out that although digital transformation is the order of the day, 3 billion people still do not have access to the internet, so this "enormous gap" represents an additional challenge.

Thus, the World Bank and the IMF have committed to helping countries "improve the effectiveness of tax collection and spending systems" through the use of technology while mitigating its risks. In this sense, the implementation of the G20 plan for international payments will be supported and efforts will be made to ensure that innovations in payments "spur growth, employment and reduce poverty."

"We will increase our support to countries to help them build strong tax policies and fiscal institutions that enable efficient public spending and sound debt and public finance management, alongside our existing work supporting the development of national financial markets. strong", they have summarized.