International Monetary Fund : Weekend Read: Kristalina Georgieva on Low-Income Countries...

 

Dear MARIA, In today's edition, we highlight: Kristalina Georgieva on low-income countries Hidden debt Egypt Retirement realities Niall Kishtainy on economic models AI and employment

LOW-INCOME COUNTRIES Countries, Institutions Must Do More to Ensure Growth, says Georgieva (Credit: IMF Photo) The IMF must do more to support low-income countries and fragile states, Managing Director Kristalina Georgieva said on Tuesday at the Center for Global Development (CGD). Speaking with Masood Ahmed, CGD President, Georgieva called for the Fund to be more representative of the global economy, with a better balance between advanced economies and the voices of emerging and developing countries. She also expressed the need to help countries build resilience to a more shock-prone world. Georgieva said she sees two equally important tasks for the Fund: "To ensure that we have the financial capacity to operate, and support vulnerable middle-income countries and low-income countries......And to bring our membership together....Despite all the difficulties in cooperation, we will work towards consensus on those issues on which the future of our children and grandchildren depend,” Georgieva said. She also explained the IMF's role in its work on climate. During a subsequent conversation with World Bank Group President Ajay Banga at an event on support for low-income countries, Georgieva shared more of the Fund’s thinking. For low-income countries to reduce vulnerabilities and achieve a sustainable and meaningful rise in income levels quickly, it will take the countries themselves to do more to build the strength of their economies, and the international community to be a reliable partner, she said. “We see that those [countries] that are doing better are countries with strong institutions, rule of law, transparency, and less corruption, and building those strengths is something no one but the countries can take on.” Watch the event

SOVEREIGN DEBT Better Disclosure Laws Needed (Credit: Ekaterina Chizhevskaya) Hidden debt—borrowing for which a government is liable, but which is not disclosed to its citizens or to other creditors—amounts to $1 trillion globally, Rhoda Weeks-Brown, Alissa Ashcroft and Karla Vasquez write in a new blog. The blog is based on a new IMF staff paper, The Legal Foundations of Public Debt Transparency: Aligning the Law with Good Practices, which presents findings from a survey of 60 countries that examined vulnerabilities and loopholes in national laws that hinder debt transparency. For example, fewer than half the countries surveyed have laws that require debt management and fiscal reports, while less than a quarter require disclosure of loan-level information—key legal features for facilitating transparency. “Given the critical importance of getting transparency right, countries and their international partners must push for reforms to improve domestic legal frameworks, which in turn benefits both borrowers, legitimate creditors, and the system more broadly.” Read the blog

EGYPT First and Second Reviews Completed (Credit: hadynyah/iStock by Getty Images) The IMF Board last week completed the first and second reviews of the extended arrangement under the Extended Fund Facility for Egypt and approved an augmentation of the original program by about $5 billion, allowing the authorities to draw the equivalent of about $820 million. A strong economic stabilization plan is being implemented to correct policy slippages. “The authorities have significantly strengthened the reform package underlying the Extended Fund Facility arrangement, supported by an augmentation of access,” IMF Managing Director Kristalina Georgieva said in a press release. “Recent measures toward correcting macroeconomic imbalances, including unification of the exchange rate, clearance of the foreign exchange demand backlog, and significant tightening of monetary and fiscal policies, were difficult, but critical steps forward, and efforts should be sustained going forward.”

In this podcast, Olivia Mitchell, Professor of Economics and Public Policy at the Wharton School of the University of Pennsylvania, speaks with journalist Rhoda Metcalfe about the challenges of today's economy for Americans planning their so-called golden years.

FINANCE & DEVELOPMENT March of the Models (Credit: Eric Frommelt) Have economists done too much inquiring “into” mathematical theories at the expense of inquiring “with” them? In F&D magazine, Niall Kishtainy traces political economy’s 200-year evolution into economic science. Adam Smith is often considered the father of modern economics, but contemporary economists’ modeling and mathematics toolbox has little in common with Smith’s literary, humanistic methods, he writes. “Good economics must strike the right balance between models as objects fascinating in themselves and as instruments to peer into the chaos of economic reality.” This article appeared in F&D’s March issue. We invited leading thinkers to share their views on how economics can rise to today’s challenges. Contributors include Angus Deaton, Atif Mian, Diane Coyle, Jayati Ghosh, John H. Cochrane, Michael Kremer, Dani Rodrik, Jeffry Frieden, Kate Raworth, Katharina Pistor, Michael Olabisi, Niall Kishtainy, Signe Krogstrup, Suresh Naidu, Ulrike Malmendier, Wendy Carlin, and many others.

March's issue is now available online in español, français, عربي, русский, 中文 and 日本語.

ARTIFICIAL INTELLIGENCE What it means for the job market and global economy

AI will affect almost 40 percent of jobs around the world, according to the latest IMF research. This Analyze This! video, featuring the IMF's Giovanni Ruta, focuses on how AI will impact the job market and the global economy.

Weekly Roundup MANAGING DIRECTOR SELECTION Executive Board Provides Update The Board Coordinators of the Executive Board of the International Monetary Fund (IMF), Mr. Afonso S. Bevilaqua and Mr. Abdullah F. BinZarah, made the following statement earlier this week: “The period for submitting nominations for the position of the next Managing Director closed on Wednesday, April 3, 2024. One candidate, the current Managing Director of the IMF, Kristalina Georgieva, has been nominated. The Board will now proceed in line with the process described in the decision of March 13, 2024, including holding meetings between the candidate, Ms. Georgieva, and Executive Directors. The Board’s goal is to complete the selection process as soon as possible, and at the latest by end-April, 2024.” STAFF PAPER E-Money and Monetary Policy Transmission In many low-income and emerging market economies around the world, digital currencies have gained widespread adoption. The development of E-money can strengthen monetary policy transmission, especially in countries with limited financial inclusion, says a new IMF staff paper. E-money development can also lead to growth in bank deposits and credit, and competition among banks and efficiency gains in financial intermediation, the authors say. STAFF PAPER Trade in Low-Carbon Technologies The deployment of low-carbon technologies (LCTs), particularly in emerging market and development economies, is essential for curbing greenhouse gas emissions. Assessing the role of climate and trade policies in promoting LCT diffusion through trade, a new IMF staff paper finds that the introduction of new climate policies has a positive and significant impact on LCT imports. More protectionist measures would impede the spread of low-carbon technologies, the author finds. MARK YOUR CALENDAR

APRIL 11, 2024, 9AM Spring Meetings Curtain Raiser Speech Tune in to watch IMF Managing Director Kristalina Georgieva deliver remarks on the outlook for the global economy and policy priorities ahead of the IMF-World Bank Spring Meetings. Her “curtain raiser” speech will be followed by a conversation with Frederick Kempe, President and Chief Executive Officer of the Atlantic Council.

Thank you again very much for your interest in the Weekend Read! Be sure to let us know what issues and trends we should have on our radar.

Miriam Van Dyck Editor IMF Weekend Read mvandyck@IMF.org