## Geoeconomic Fragmentation and the Future of Multilateralism

_Staff Discussion Notes, January 15, 2023_

## Source details

**Canonical URL:** [Geoeconomic Fragmentation and the Future of Multilateralism](https://www.imf.org/en/publications/staff-discussion-notes/issues/2023/01/11/geo-economic-fragmentation-and-the-future-of-multilateralism-527266)

## Other formats

- [Markdown version](/en/publications/staff-discussion-notes/issues/2023/01/11/geo-economic-fragmentation-and-the-future-of-multilateralism-527266/index.md)
- [Structured JSON version](/en/publications/staff-discussion-notes/issues/2023/01/11/geo-economic-fragmentation-and-the-future-of-multilateralism-527266/index.json)
- [Bundle manifest](/en/publications/staff-discussion-notes/issues/2023/01/11/geo-economic-fragmentation-and-the-future-of-multilateralism-527266/bundle-manifest.json)

## Bibliographic details
- Authors: Shekhar Aiyar, Jiaqian Chen, Christian H Ebeke, Roberto Garcia-Saltos, Tryggvi Gudmundsson, Anna Ilyina, Alvar Kangur, Tansaya Kunaratskul, Sergio L. Rodriguez, Michele Ruta, Tatjana Schulze, Gabriel Soderberg, Juan P Trevino
- Published: January 15, 2023
- Series: Staff Discussion Notes
- DOI: https://doi.org/10.5089/9798400229046.006

---

### Overview and central thesis
- After several decades of increasing global economic integration, the world is facing the risk of policy-driven geoeconomic fragmentation (GEF).
- The note analyzes ramifications of GEF and identifies the channels through which benefits of globalization were transmitted and along which the costs of GEF are likely to fall.
- It explores consequences of GEF for the international monetary system and the global financial safety net.
- It suggests a pragmatic path forward for preserving the benefits of global integration and multilateralism.

### Identified transmission channels (where benefits accrue and costs of GEF will fall)
- Trade
- Migration
- Capital flows
- Technology diffusion
- Provision of global public goods

### Consequences and areas of focus
- International monetary system: implications of fragmentation for monetary relationships and currency shares.
- Global financial safety net: implications for crisis prevention, liquidity provision, and cross-border financial stability.
- Trade agenda and trade openness: risks from policy-driven trade barriers and geopolitical blocs.
- Technology diffusion and capital flows: potential disruptions to technology spread and investment patterns.
- Multilateralism and rules-based systems: stresses on existing multilateral institutions and cooperative frameworks.

### Policy direction and recommendations (pragmatic path forward)
- Preserve benefits of global integration and multilateralism through pragmatic measures (the note suggests a pragmatic path forward; specifics are developed in the full Staff Discussion Note).
- Protect provision of global public goods and maintain frameworks for international monetary cooperation and the global financial safety net.
- Address trade barriers and defend trade openness to limit economic costs associated with fragmentation.
- Consider policy approaches to sustain technology diffusion, migration channels, and capital flow integration while managing geopolitical risks.

---

## Content in this bundle

- **Staff Discussion Note**
  - [Staff Discussion Note (Markdown version)](/-/media/files/publications/sdn/2023/english/sdnea2023001-s001.pdf.md){rel="alternate" type="text/markdown"}
  - [Staff Discussion Note (PDF)](/-/media/files/publications/sdn/2023/english/sdnea2023001-s001.pdf){rel="external" type="application/pdf"}
- **sdnea2023001 — Geoeconomic Fragmentation and the Future of Multilateralism**
  - [sdnea2023001 — Geoeconomic Fragmentation and the Future of Multilateralism (Markdown version)](/-/media/files/publications/sdn/2023/english/sdnea2023001.pdf.md){rel="alternate" type="text/markdown"}
  - [sdnea2023001 — Geoeconomic Fragmentation and the Future of Multilateralism (PDF)](/-/media/files/publications/sdn/2023/english/sdnea2023001.pdf){rel="external" type="application/pdf"}

---

_Source: https://www.imf.org/en/publications/staff-discussion-notes/issues/2023/01/11/geo-economic-fragmentation-and-the-future-of-multilateralism-527266_