So far, with the Ukraine War, 30 countries have restricted trade in food, energy and basic products, according to data from the fund, which has warned of the enormous cost that this disintegration can entail for states.
Technological fragmentation alone would mean falls of 5% of GDP for some countries, according to estimates by the fund, which has cited as an example the trade tensions of 2019, which led to a drop in world GDP of almost 1%. The cooperation that has existed during the last three decades has managed to lift 1,300 million people out of extreme poverty, according to the IMF.
Reduce trade barriers
To restore this global confidence, it has considered it a priority to strengthen international trade to increase resilience, so that barriers are reduced to alleviate the scarcity of products and achieve lower food prices, among others. In his opinion, not only countries but also companies need to secure supply chains and preserve the advantages for their business of global integration.
Secondly, it proposes agreements for the restructuring of the debt of the most vulnerable countries, which would also have a positive impact on the creditors.
Modernize payment systems
On the other hand, the IMF proposes that cross-border payment systems be modernized, taking into account that the average international cost of transfers is 6.3%, which implies, according to its data, that 45,000 million dollars a year end up in the hands of intermediaries.
Finally, it has raised another priority, the most important of all, which is to address climate change and the urgent need to accelerate the transition to energy. The IMF recognizes that there is no magic formula to restore global confidence, but adds that if the parties show interest in solving the most urgent common needs, it will be possible to weave a stronger and more inclusive economy.
This organization has recalled that the advantages of acting together were revealed during the pandemic, when governments took coordinated fiscal and monetary measures to prevent another great depression and to develop vaccines in record time.
This IMF report is made public before giving trade when the interventions of the world economic forum have not yet started, which will be held until Thursday where the leaders of politics, business and civil society discuss economic challenges, again in face-to-face after the pandemic.
Source: Ambito
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