[1/2]Palestinians walk under rubble after an Israeli military attack in Gaza City on October 15, 2023.Reuters/Mutasem Murtaja acquires licensing rights
MARRAKESH, Morocco, Oct 16 (Reuters) – Paralysis of global financial leaders in dealing with the fallout from last week’s Hamas attack and Israel’s response puts the International Monetary Fund and World Bank in the crosshairs The deep geopolitical divisions that stand in the way of new funding plans have been revealed. Mitigation of frequent economic shocks.
Hamas launched an unprecedented attack on Israel on October 7, at the same time as senior finance officials arrived in Morocco to attend the annual meetings of the IMF and World Bank. flipped the script on a carefully crafted meeting that called for new resources and measures for the country’s recovery.
IMF Managing Director Kristalina Georgieva did not mention the new conflict at the opening ceremony. Later, as Israeli retaliatory attacks intensified, she struggled to cope, initially describing them as a human tragedy but a vague source of economic insecurity.
Private conversations at the meeting centered on the impact of the Israel-Gaza conflict, from a new refugee crisis to the impact on trade to the threat of fighting in Lebanon and the West Bank, financial and nonprofit groups said. participants told Reuters.
“In the face of such a massive global shock, caused not by climate shocks but by humans, these institutions can’t do anything about it. That’s why they don’t even talk about it,” Sr. said Rachel Nadelman. She is a fellow at American University’s Center for Accountability Research and has attended official events in civil society and meetings.
The lack of response extended to chairmen’s statements issued by the G20, the IMF, and the World Bank’s governing boards, which did not mention the conflict.
These bodies have once again failed to issue a joint communiqué, reflecting not only deepening geopolitical tensions over Russia’s invasion of Ukraine, but also the dispute between the United States and China, which have long fought over the wording of the communiqué. There is.
G20 officials said the communiqué was possible only after U.S. President Joe Biden and China’s Xi Jinping met in Bali last year, having been torn apart by the Ukraine war for two years.
“The Israeli-Palestinian conflict is even more contentious and almost impossible to reach an agreement,” the official said.
Achievement hidden in the shadows
World Bank President Ajay Banga acknowledged on Sunday that the Israel-Gaza conflict, along with the war in Ukraine and fighting in Africa, “cast a long shadow” over the conference’s outcomes and increased economic challenges.
“Without peace, it is difficult for people to find stability and growth, to take care of their children and to get jobs,” he said.
The World Bank Board of Directors has announced a new vision to create a world without poverty on a livable planet, with a new mission to combat climate change, pandemics and fragile states, and new measures to increase financing. Approved the statement.
The IMF’s governing board agreed to increase its allocation by the end of the year, leaving the possibility that the increase could be made without adjusting the shareholding structure to increase votes for China, while also increasing the amount of $3 billion in the Poor Countries Trust Fund. Funding goal has been achieved.
But Josh Lipsky, director of the Atlantic Council’s Center for Geoeconomics and a former IMF official, said conflict remains the biggest challenge to the global economy.
“For these institutions to remain legitimate and fit for purpose over the next decade, they will need to respond to geopolitical crises in near real time,” he told Reuters.
“Right now, geopolitical shocks are economic shocks, and economic shocks are geopolitical shocks. And they’re trying to separate the two.”
Reporting by Andrea Shalal and David Lawder.Editing: Giles Elgood
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