## A Story of Hope and Opportunity for the Next Generation, IMF Managing Director’s 2023 Annual Meetings Plenary Speech

_IMF News, October 13, 2023_

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## Bibliographic details
- Published: October 13, 2023

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### Introduction
- Speech by Kristalina Georgieva, IMF Managing Director, delivered at the 2023 Annual Meetings Plenary in Marrakech, Morocco, October 13, 2023.
- Opening acknowledgements and condolences for recent disasters and conflicts.
- Noted significance: Annual Meetings return to the Arab world after 20 years and first time on the African continent in 50 years.

### The Story of the Last 50 Years — key observations
- Population has more than doubled from 4 to 8 billion.
- Since 1973 global GDP per capita has more than doubled.
- IMF membership grew from 125 in 1973 to 190 today.
- Major advances in health, education, and technology alongside persistent dislocation, poverty, and inequality for many.
- Periods of turmoil include oil shocks in the 70s, the Latin American debt crisis, the Asian financial crisis, the global financial crisis; and in the past three years: a global pandemic, war in Europe, and a cost-of-living crisis.
- Characterization: “extraordinary but disrupted progress” with massive shifts in the world economy.

### The Story of the Next 50 Years — scenario and central question
- Thought experiment using AI: speculative 2073 vision including renewable energy, AI-driven industries, space exploration, enhanced global connectivity, digital currencies, revolutionary healthcare, and efforts toward economic inclusivity — explicitly labeled as speculative.
- Central policy question: how to capture benefits of transformation and manage associated risks.

### A Difficult Starting Point — current macroeconomic assessment
- Global recovery described as slow and uneven.
- Growth currently at 3 percent, “well below the average of the two decades before the pandemic.”
- Medium-term growth prospects described as the weakest in decades.
- Economic “scarring” differs across countries, with emerging market and developing countries hardest hit.
- Warning of dangerous divergence after a period of convergence, exacerbated by fragmentation, climate change, and fragility—many countries at a breaking point.
- Special emphasis on Africa as home to the world’s youngest population; closing income gaps and generating job-rich growth identified as vital.

### Writing a Better Story for the Next Fifty Years — strategic priorities
- Two groups of “no regrets” actions:
  - Investment in strong economic foundations.
  - Investment in international cooperation.
- Reference to “The Marrakech Principles” announced with the World Bank and the Government of Morocco.

### Investment in strong economic foundations — policy prescriptions and impacts
- Core policy prescriptions:
  - Price stability is key; fighting inflation remains paramount.
  - Safeguarding financial stability with strong supervision amid a “higher-for-longer” era and risks from sharp tightening.
  - Prudent fiscal policy to restore fiscal room because debt and deficits are well above pre-pandemic levels; prioritize spending and adopt credible medium-term fiscal frameworks.
  - Transformational reforms: improved governance to fight corruption, streamlined regulation, reforms to boost trade and improve access to capital, and increasing labor force participation—especially for women.
  - Invest in people, notably education to prepare young people for future jobs.
- Quantified impacts and resources:
  - “The right package of reforms could boost output levels by up to 8 percent in four years.”
  - Domestic resource mobilization potential: tax reforms alone could add up to 5 percent of GDP in revenue for emerging markets—and up to 9 percent for low-income countries.
  - Fund priority: work on domestic resource mobilization.

### Investment in global cooperation — priorities and mechanisms
- Climate and trade emphasized as obvious examples.
- Two highlighted areas where IMF plays an active role:
  - Debt:
    - “More than half of low-income countries remain in or at high risk of debt distress.”
    - “About a fifth of emerging economies face "default-like" spreads.”
    - The Common Framework is delivering debt restructurings slowly.
    - The Global Sovereign Debt Roundtable (established by the Indian G20 Presidency, the IMF, and the World Bank) is bringing creditors and debtors together with promising signs.
  - Global financial safety net:
    - IMF described as the “insurer of the uninsured” with a prominent role over the past three years.
    - Actions since the pandemic:
      - Provided about $1 trillion in liquidity and financing.
      - This came via the $650 billion SDR allocation and $320 billion in lending to 96 countries, including 56 low-income nations.
      - Activated direct debt relief programs for poorest members.
      - Mobilized emergency financing during the pandemic.
      - Provided full-fledged programs and precautionary credit lines for stronger members.
      - Launched the Resilience and Sustainability Trust (RST) offering long-term, affordable resources to vulnerable low- and middle-income countries.
        - One year after operationalization, 11 countries are benefitting from RST support.
      - Channeling of SDRs: work with stronger members to direct SDRs to vulnerable members has generated around $100 billion in new financing through trust funds, especially the Poverty Reduction and Growth Trust (PRGT) and the RST.

### IMF institutional needs and reform priorities
- To remain central to the global financial safety net, the IMF needs urgent strengthening on two fronts:
  - Boost permanent quota resources to bolster capacity to support members with lower financial buffers.
  - Replenish subsidies that enable the PRGT to provide zero-interest loans to the poorest members.
- Governance adaptation:
  - Continue work to better represent membership and global economic changes.
  - The possibility of adding a third Chair for Africa to the Executive Board cited as a welcome step.

### Conclusion — institutional strengths and outlook
- IMF’s strength grounded in trust of its 190 members.
- Praise for Fund staff and management; acknowledgment of partnership with the World Bank.
- Closing image from a Malhoun poem referencing Marrakech and the metaphor of finding the key to opportunities for the next generation.

*Source: Speech by Kristalina Georgieva, IMF Managing Director, “A Story of Hope and Opportunity for the Next Generation,” 2023 Annual Meetings Plenary Speech, Marrakech, Morocco, October 13, 2023.*

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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)
- [Morocco and the IMF](http://www.imf.org/external/country/MAR/index.htm)
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