Joint Statement of the IMF Managing Director and of the World Bank President
IMF News, September 7, 2023
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Bibliographic details
- Published: September 7, 2023
Overview and context
- Press Release No. 23/305
- Date: September 7, 2023
- Core message: The world confronts significant economic challenges, the existential threat of climate change as well as a digital transition, all in the context of more frequent shocks, high debt levels, limited policy space in many countries and rising geopolitical tensions.
- Central call: Well-designed and appropriately sequenced policies are critical to help accelerate growth, alleviate policy trade-offs, and support the green and digital transitions. The Bretton Woods institutions have a critical role to play and will enhance collaboration to deliver tangible benefits for people, businesses, and institutions of member countries.
- Historical framing: The Bretton Woods institutions were established in 1944 to help rebuild a world economy devastated by global depression and war; the World Bank and the Fund have adapted over the past 80 years to serve members’ needs.
Key findings and assessments
- Global growth and development
- Growth in the world economy has slowed, with the medium-term outlook at its weakest in over three decades.
- Progress in poverty reduction has come to a halt.
- Conflict and fragility are on the rise.
- The world is facing geoeconomic fragmentation, extreme natural disasters exacerbated by climate change, and increasing levels of public debt.
- Digital inclusion
- In 2022, nearly 3 billion people remained offline, the vast majority of whom live in developing countries.
- Wide gaps in usage of digital products between and within countries remain a challenge.
Climate change — findings and institutional response
- Assessment
- Climate change is a threat to global peace, security, economic stability, and development.
- Institutional commitments and tools
- World Bank: updated core mandate places climate explicitly as one of the core areas; ongoing multiyear engagement on climate action and development; Climate Change Action Plan; Country Climate and Development Reports (CCDRs); policy advice; Development Policy Financing; financing for investments via investment and program for results loans.
- Fund: adopted a new climate strategy including coverage of macro-critical climate issues as part of Article IV consultations; expanded technical assistance in specialized areas; established the Resilience and Sustainability Trust (RST) to provide affordable long-term finance to vulnerable countries implementing macro-critical climate reforms.
- Joint work: co-hosting the Secretariat of the Coalition of Finance Ministers for Climate Action.
- Collaboration commitments
- Formalize regular meetings of the new Bank-Fund Climate Advisory Group, tasked with ensuring coordination of climate-related work streams.
- The group will meet every two months to discuss global and country level engagements, including results of CCDRs, country level climate analytical work, and the pipeline of key projects and policy-based lending (World Bank’s DPLs and Fund’s RST engagements).
- Incorporate climate considerations in ongoing work on debt sustainability, including through the revised joint Low Income Country Debt Sustainability Framework.
Debt vulnerabilities — findings and institutional response
- Assessment
- Current context of elevated debt vulnerabilities requires intensified collaboration.
- Commitments and actions
- Enhance joint work to prevent further build-up of debt vulnerabilities.
- Assist countries to strengthen debt management, transparency, and public finances.
- Improve the joint Low Income Country Debt Sustainability Framework to better account for current challenges.
- Deepen support to creditors and debtors engaged in debt restructuring.
- Work further with partners to improve restructuring processes, including under the Common Framework, building on work launched at the Global Sovereign Debt Roundtable.
Digital transition — findings and institutional response
- Assessment
- The ongoing digital transition is central to development and offers an opportunity to accelerate economic growth and connect citizens to services and jobs.
- Institutional roles
- World Bank: works with governments in emerging and developing countries to address regulatory and infrastructure constraints to digital inclusion and transformation; promotes financial inclusion and low-cost payments systems; expands digitalization of government services and operations.
- Fund: supports digital transformation in the financial sector to promote wider use of new financial technologies while maintaining the integrity and stability of the financial system.
- Joint priorities and actions
- Step up joint work to help countries increase the effectiveness of revenue collection and expenditure systems in governments and reap the benefits of new digital technologies while mitigating risks.
- Support ways to improve cross-border payments and support implementation of the G20 Roadmap to enhance cross-border payments.
- Ensure that payment innovations spur growth, poverty reduction and job creation.
Collaboration, deployment of resources, and policy priorities
- Joint comparative advantages
- World Bank: diverse skills and experience on sustainable growth and structural transformation; significant footprint in client countries; policy and investment financing tools.
- Fund: capabilities to support macroeconomic and financial stability and promote economic conditions conducive to growth and sustainability.
- Operational commitments
- Coordinate closely at global, regional, and country levels to ensure resources are deployed efficiently and effectively, driven by a focus on results for members.
- Build on past joint action and collaboration frameworks, including earlier joint assessments of financial sector soundness and debt sustainability, the 1989 Concordat, and the 2007 Joint Management Action Plan.
- Resource mobilization and domestic policies
- Work with shareholders and partners to mobilize substantial resources needed to meet complex global challenges.
- Support countries to build strong tax policy and administration and fiscal institutions that deliver efficient public spending and sound debt and public financial management.
- Continue support for development of strong domestic financial markets.
Commitment statement
- “The world can, and must, come together to address global challenges. The IMF and World Bank are committed to help advance this common effort.”
Joint Statement of the IMF Managing Director and of the World Bank President