'A loss of talent and contribution': IMF director urges world to avert possibility of a 'second Cold War'

Washington: The director of IMF said on Thursday that countries should do more to avert the possibility of a “second Cold War”. Kristalina Georgieva said that countries should make efforts to prevent the consequences of a growing global trade fragmentation in the world. Speaking at the IMF and World Bank’s spring meetings, Georgieva said, “I am among those who know what are the consequences of a Cold War: it is loss of talent and contribution to the world.” “I don’t want to see that repeating,” she said, adding that the world should “rationally accept there will be some cost, there will be some fragmentation, but keep these costs low.” She highlighted the roles of institutions like the World Bank and IMF in preventing the world from splintering into different blocs with severe economic consequences. Earlier this week, an IMF report showed how trade fragmentation caused by events like Brexit, the US-China trade war and the Russian invasion of Ukraine could reduce the global economy to as much as seven percent smaller than it otherwise would have been. “If we fail to be more rational, then people everywhere will be worse off,” she said. Some good news At the spring meeting, both IMF and World Bank also stressed the progress made by both institutions on a number of key issues. Member states agreed on several steps to boost the World Bank’s financial capacity, he said, freeing it up to lend “as much as $50 billion of new financing” over the next decade. David Malpass, World Bank’s outgoing president, said progress has also been made during a debt roundtable discussion on Wednesday. The talks not only included creditor countries but also the private sector, and representatives from Zambia, Ghana, Ethiopia and Sri Lanka, which are all facing debt challenges. Indian Finance Minister Nirmala Sitharaman, who co-chaired the meeting, said that she expected a resolution for “many” debtor countries “at the earliest” opportunity. Inflation still high in many countries Both IMF and World Bank warned that inflation still remains high in many countries across the world. Georgieva said, “We expect central banks to stay the course in the fight against inflation, holding a tight stance to prevent a de-anchoring of inflation expectations.” Governments also needed to work to reduce their budget deficits, and do more to improve sluggish growth prospects for the world economy in the medium term, she added. Georgieva called on member states to speed up digital transformation in many countries, improve the business environment, and accelerate the green energy transition. “We estimate $1 trillion a year is needed just for renewable energy and investment that can translate into growth and jobs,” she said. With inputs from agencies Read all the  Latest News ,  Trending News ,  Cricket News ,  Bollywood News , India News  and  Entertainment News  here. Follow us on  Facebook,  Twitter and  Instagram.