Senior Vice President, Global Initiatives, U.S. Chamber of Commerce
April 22, 2022
Policymakers responsible for almost all the public money in the world met in Washington, D.C. this week for the annual World Bank and International Monetary Fund (IMF) Spring Meetings.
Why does this matter?
Rarely has close macroeconomic coordination been so badly needed. The world is facing a series of complex, interrelated crises stemming from Russia’s invasion of Ukraine, the ongoing COVID-19 pandemic, and mounting inflationary pressures.
These major events have had huge ripple effects on the global economy: a surge of refugees, supply chain disruptions, food price inflation and shortages, sky-high debts, and war-induced economic disasters.
This week’s meetings focused heavily on these issues, which were encompassed in the IMF’s new global policy agenda: Repercussions, Response, Resilience.
Global economy by the numbers
- 3.6% — The downgraded global growth projection for 2022 and 2023 from the IMF’s new World Economic Outlook
- 33.6% — How much world food prices surged last month compared to a year earlier, according to the UN’s Food and Agriculture Organization. March also marked the highest prices for food staples ever recorded.
- 70 million — The number of people pushed into poverty in 2021, largely due to the pandemic.
- 95% - Global public debt as a share of GDP, a figure 11% higher than pre-pandemic.
What leaders are saying
The U.S. Chamber held multiple discussions with finance ministers and other government officials on the margins of the IMF/World Bank meetings. Across the board, there were concerns about impacts of the crisis in Ukraine, particularly on what these means for food supply and energy costs.
War and pandemic notwithstanding, addressing climate change remains high on the agenda. With Egypt hosting COP27 in November, the U.S. Chamber hosted its Minister of Finance and Minister of International Cooperation to discuss how the U.S. private sector must be part of the solution. The business community can bring its innovation, finance, and management capabilities to bear on a range of renewable energy, decarbonization, and sustainability projects in Egypt and the larger developing world.
The U.S. Chamber also held a discussion on the state of the global economy with three leading economists: Megan Greene, Global Chief Economist for the Kroll Institute; Sara Johnson, Executive Director, Global Economics, S&P Global Market Intelligence; and Christopher Smart, Chief Global Strategist and Head of the Barings Investment Institute. They addressed the challenge of taming inflation without tipping the economy into recession as well as the impact of energy security challenges and the energy transition.
What we are concerned about most: unity to tackle food crisis
The most pressing issue is how to address the looming setback in humanity’s fight against hunger. The confluence of wartime disruption, pandemic-induced supply bottlenecks, climate change, and outdated land-use choices are now threatening to undermine the livelihood of millions and creating a very uneven playing field for less developed economies.
The UN World Food Program calculates that 283 million people are currently facing severe hunger with 45 million in 43 countries on the verge of starvation. This number will be even higher as the dual disasters of war in Ukraine and the lingering pandemic continue to upend food systems.
The World Bank warns that for each percentage point increase in food prices, 10 million people (nearly the entire population of North Carolina) are thrown into extreme poverty.
Before this week’s meetings, the World Bank Group, IMF, WFP and WTO issued a joint statement raising the alarm about food availability and prices and calling on the international community to urgently support vulnerable countries through coordinated actions including provision of emergency food supplies, financial support, increased agricultural production, and open trade. Food security was also the central subject that Secretary Yellen has chosen to lead on in discussion with G20, G7, and international financial institutions.
Ensuring global food security and food system resilience must be a top priority.
Government and private sector partnership
We need a real-time mobilization of the private sector — coupled with political will — to address the international food challenge.
- Ensuring agricultural trade corridors are open, and that food and food production inputs like fertilizer can flow to where they are needed.
- Rejecting export restrictions and bans on food, which greatly exacerbates shortages and price inflation.
- Increasing government transparency on policy responses.
- Enhancing international cooperation with private sector representatives from all segments of the global food value chains, including financial and data services.
- Finding ways to ease the burden on food importing countries. This includes donor country support for greater financial liquidity and further debt relief.
- Closing the yield gaps in underdeveloped regions.
- Spurring innovation in agribusiness.
- Strengthening collaboration between governments and the private sector to find ways to achieve ambitious climate goals while bolstering food security.
- Strengthening sustainable agriculture.
- Embracing the IMF’s new Resilience and Sustainability Trust Fund. Taking effect on May 1, the fund is expected to exceed $50 billion and aims to help countries deal with the pandemic and spillovers from geopolitical risks.
The business community is ready to do our part to collaborate on shared solutions to these global challenges. What we need from world leaders is a clear, coherent strategy to chart a better way forward.
About the authors
Gary Litman, senior vice president of Global Initiatives at the U.S. Chamber of Commerce, is responsible for the Chamber’s policy advocacy for the economic reform agenda of the G20, G7, and international institutions. He leads the Chamber’s participation in a range of global business coalitions and related business summits focused on sustainable economic policies.