## Remarks by Managing Director Kristalina Georgieva at the 2023 Boao Forum for Asia

_IMF News, March 30, 2023_

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## Bibliographic details
- Published: March 30, 2023

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### Global outlook and immediate challenges
- Expectation that 2023 will be another difficult year, with global growth falling under 3 percent as the effects of the war in Ukraine and monetary tightening continue to take hold.
- A rapid transition from a prolonged period of low interest rates to much higher rates—necessary to fight inflation—has caused turbulence in the banking sector in some advanced economies and made policy choices harder.

### Role of cooperation and trade integration
- Cooperation has transformed the global economy through deeper trade integration, boosting incomes and living standards.
- Over the past 40 years:
  - The world economy has tripled in size.
  - Emerging and developing countries have quadrupled in size, making them the biggest beneficiaries.
- China: 800 million people have been lifted out of poverty as it has become ever more integrated into the world economy.
- Trade within Asia now accounts for almost 50 percent of the total, with China acting as a crucial hub.
- Research finding: the long-term cost of trade fragmentation could be as high as 7 percent of global GDP—roughly equivalent to the combined annual output of Germany and Japan.
- As a highly integrated region, Asia would be the most adversely affected by runaway fragmentation.
- Policy recommendation: reinvigorate international trade in an equitable way and diversify supply chains based only on economic logic, but not beyond.

### Inequality of globalization and supply chain resilience
- Recognition that the benefits of globalization have not been shared equally across countries or people.
- Need to make supply chains more secure and diversified to address these concerns.
- Recommended approach is pragmatic cooperation—working together where it matters most.

### Solidarity, fiscal policy, and sovereign debt
- Over the past three years, low-income and vulnerable countries and people have been hit especially hard.
- Domestic policy priority: fiscal policy should provide targeted support to those most in need or those most affected by food insecurity or the cost-of-living crisis.
- International priority: countries in relatively stronger positions should help vulnerable members of the global community.
- With interest rates high and many currencies depreciating, faster and more efficient global mechanisms for providing debt treatments to countries in debt distress are urgently needed.
- Establishing such mechanisms would provide significant benefits to debtors and creditors alike by removing one important source of uncertainty to the global picture.
- China’s engagement in the Common Framework and participation in the new Global Sovereign Debt Roundtable is welcomed.

### Climate action and future generations
- Solidarity must extend to future generations; climate action matters especially in Asia given its high population density and exposure to climate shocks.
- Asia is a priority region to speed up the green transition, which can offer much needed opportunities for growth and jobs.

### Conclusion and overarching message
- Despite forces of fragmentation, cooperation and solidarity are presented as the twin beacons to guide policymakers through challenging times.
- Collective action will make the global community stronger, wealthier, and more secure.
- Closing exhortation: together, we can navigate the rough waters to reach a safe harbor.

*Remarks by Managing Director Kristalina Georgieva at the 2023 Boao Forum for Asia*

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## References

- [https://www.imf.org/en/about/senior-officials/bios/kristalina-georgieva](https://www.imf.org/en/about/senior-officials/bios/kristalina-georgieva)
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_Source: https://www.imf.org/en/news/articles/2023/03/30/sp032923-md-boao-forum-remarks_