The International Monetary Fund (IMF) has recently pledged to put climate change at the heart of its work. A laggard to date, the IMF has to catch up fast to ensure that the world community can meet its climate change and development goals in a manner that doesn’t bring havoc to the global financial system.
The IMF’s most important function is to provide emergency financing to countries in dire economic straits that are unable to pay their creditors. In response to the COVID-19 pandemic, the IMF has already approved 119 programs to 85 countries at a cost of over $100bn.
The US can reverse its resistance to an SDR allocation, provide new bilateral financing, and comprehensive debt relief through pressure on the private sector that is linked to climate and development outcomes. Such action would put the world economy on a better path, restore US standing in the multilateral realm, and give the US the legitimacy to criticize others less willing to lead.
In the past, the IMF infamously treated each crisis with a “one-size-fits-all” approach that conditioned new financing on fiscal austerity, but has surprisingly changed tactics in the face of COVID-19.
To achieve a sustainable and stable global economy, international cooperation is key to addressing the cross-border challenges of pandemics and climate change.
China’s development banks provide as much financing to developing countries as the World Bank does, Boston University’s Kevin Gallagher explains.
As China’s example shows, a country needs to invest in its future prosperity. Tariffs and tax cuts are no way to get there.
Latin American financial ministers and central bankers will have a lot at stake and a lot to worry about at the upcoming spring meetings of the IMF and World Bank in Washington.
In an ongoing series examining the consequences of President Trump’s policies on the region, Kevin Gallagher looks at what this administration’s trade policies will mean for China’s influence in Latin America.
Latin America is experiencing its worst economic growth — projected to be negative this year – since the lost decade of the 1980s. At this crucial time, the United States is turning its back and stepping backward from Latin America while China takes further steps forward in its economic relations with the region.
