Marrakesh meetings at the pace of Georgia and the Gaza war
Gaza upended expectations…and changed the numbers
Marrakesh meetings at the pace of Georgia and the Gaza war: Within four days, the officials of the Fund and the World Bank and hundreds of experts bombarded us with hundreds of numbers, ratios, approaches and expectations that took them many months, and lessons from years before that, but the big question that remained without a real and realistic answer is:
What economic and reform programs for the countries of the Middle East are we talking about, in light of the security risks.
The military, past and present, continues to fuel wars, instability, and “uncertainty,” especially in the countries spread across the geographical borders of Palestine, the first of which are Lebanon, Syria, and Egypt, which are at the heart of the permanent and wide-open confrontation in these sad days.
A Palestinian amid devastation in the Jabalia refugee camp in Gaza following nighttime Israeli air strikes
Financial and monetary language
The flowery “financial and monetary language” and economic diplomacy are not useful here, nor are the titles of the bright sessions that have always characterized the pillars of the Fund and the World Bank, which succeeded in Marrakesh in applying the formula that “does not arouse the feelings of debtors and does not neglect the interests of creditors,” but did not grant the political and security workers The region has their right to discussion and analysis in general, despite the announcement by World Bank President Ajay Banga that “the conflict between Israel and Gaza is an unnecessary global economic shock, and will make it difficult for central banks to achieve a smooth reduction in inflation in many economies if it spreads,” noting that “ “It is a human tragedy and an economic shock that we do not want.”
The Gaza war upended expectations and changed the numbers… Talking about any economic and reform programs for Middle Eastern countries is no longer useful, without taking into account the security and military threats, wars and their exorbitant costs.
New war conflicts
There is no doubt that the new war conflicts with Banga’s efforts in his work to achieve better development and a better environment, as the first president of the bank to come from the peoples of the South, reassuring the poor countries, in his presence and words, that he is able to influence the leaders of the North, as he said.
Fate of the world economy
At a time when experts were urgently talking in the sessions about the fate of the world economy and the financial and structural reforms of countries, and how chronic inflation and the continuous rise in interest rates can be controlled, and the continuation of this reality with the war launched by Russia against Ukraine, news of the new Gaza war came to add a double burden to the global economy.
And expectations With more global military spending, especially with the American and European mobilization to rescue Israel from the new impasse, and the aircraft carrier “Gerald Ford” heading to the Middle East, this is what caused concern among central banks, donor institutions, financial and oil markets, sea lanes, and others, as Banga hinted.
EPAWorld Bank President Ajay Banga in a panel discussion during the third day of meetings
Any increase in inflation means that central banks may be forced to keep interest rates high, which increases the cost of borrowing and limits the ability of borrowers, whether individuals or companies, to repay debts, and leads to higher credit risks.
The global inflation rate is expected to decline steadily to 6.9 percent in 2023 from 8.7 percent in 2022, due to tightening monetary policy in parallel with the decline in global commodity prices.
Spokesman
From day one, a spokesman for the Fund said that it was “closely following the situation in Israel and Gaza and that it was too early to assess any economic impact.” He added: “We are deeply saddened by the loss of life,” as we mentioned in the first episode of this special coverage, “The International Monetary Fund in its Autumn.”
Just yesterday, in response to a question, Georgivia commented: “We are closely monitoring how the situation develops and what its repercussions are on the oil markets in particular.
It is too early to judge now. We have seen some reactions in the markets, and we will be monitoring that closely. It is clear that a new cloud is in the air.” The horizon, at a time when the global economy is witnessing major turmoil, this cloud will darken the economic horizon, and it does not need it. Let us pray for peace.”
It is clear that a new cloud is on the horizon (the Gaza war) at a time when the global economy is witnessing major turmoil. This cloud will darken the economic horizon, and it does not need it. Let us pray for peace.
INTERNATIONAL MONETARY FUND DIRECTOR KRISTALINA GEORGIEVA
Ngozi Okonjo-Iweala
The Director-General of the World Trade Organization, Ngozi Okonjo-Iweala, also hoped that the conflict between Israel and Hamas would end quickly, warning that it would have a “really significant impact” on already weak global trade flows if it expands in the region, “which could greatly affect economic growth.” Global”.
Limited resources of the Bank and the Fund
These pessimistic rebound expectations come at a time when the Fund had previously expected, in its 2024 Economic Prospects Report, that growth in the Middle East and North Africa region would return to 3.4 percent, which is half a point higher than global growth of 2.9 percent, after it was It decreased to 2 percent in 2023 from 5.6 percent in 2022, and in light of the military developments, it is no longer clear whether these estimates will remain valid or not…
Geopolitical influences
These geopolitical influences on growth rates were also expressed by Pierre-Olivier Gourinchas, the Fund’s chief analyst, when he described the global economy as resilient so far despite “stumbling,” as he put it.
A number of other IMF experts whose opinions were polled by the magazine did not hide their pessimism about the current events in Gaza and their potential repercussions if they expand and regional and international powers become involved.
The two institutions face limited financial resources and increased global financing needs in light of this unprecedented crisis international situation on various fronts, which may increase the harshness of the conditions for granting loans and raise the cost of borrowing, making them more unfair to dozens of poor countries that do not have the capabilities to comply with those conditions.
Otherwise, they wouldn’t have borrowed in the first place. This is enough to arouse feelings of anger and revulsion among half of the Earth’s population.
There is no doubt that the most important lesson of the first days of the meetings began with the Gaza war, that there is no economy without peace, and no structural financial reforms without linking them to regional decisions and understandings.
World Bank’s five-fold decline
Despite the World Bank’s five-fold decline in financing capacity compared to what it was in the 1960s, the Bank provided financial support worth $73 billion in 2023, benefiting 90 countries, including $34 billion allocated to the poorest countries to confront the repercussions of climate change and the Covid-19 pandemic.
This is a small amount compared to the actual need of the countries of the South in this context and the food security dilemma that costs these countries about 3 trillion dollars annually to confront.
King’s message: Shared global solutions
King Mohammed VI’s long message to the participants in the annual meetings this morning was clear in this sense, as he said that “we are witnessing today of geo-economic fragmentation and the growth of sovereign tendencies, part of which is attributed to the desire to reset the balance of economic and political power at the global level.” “It has become a threat to the great progress that has been achieved in recent decades in light of multilateralism.”
He added: “It is true that the economic, social and political developments witnessed in recent years call for reform of the institutions and rules that govern the multilateral system, but this also requires consolidating the basic principles on which this system is based and stoking the spirit that inspires it.
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This is because they are still necessary to maintain global stability and peace.” And moving forward with concerted efforts to overcome the common challenges facing our planet and our peoples. But addressing global challenges requires, as we all know, global solutions that are only possible within the framework of unity and mutual respect between nations, especially by integrating and valuing diversity, as an added value and not a source of conflict. And division, taking into account the specificities of each country and region.
The global financial system must also be reconsidered and worked to improve it so that it becomes more equitable and accommodating for the benefit of all. Perhaps, from this perspective, these annual meetings constitute the most appropriate space to embrace dialogue and constructive discussion regarding this reform. If it is our destiny, For all of us to live on this planet, there is no way for any country to build its future in isolation from taking into account the destinies of other countries.”
Most important lesson
There is no doubt that the most important lesson of the first days of the meetings began with the Gaza war, that there is no economy without peace, and no structural financial reforms without linking them to regional decisions and understandings.
The connection is close, and otherwise the dialogues taking place in the Marrakesh meetings will remain subject to fluctuations and the positions of the major powers, awaiting the outcome of the ongoing war in Gaza and the resulting confusion of cards and priorities, and subsequently a change in all numbers and data, especially if the war between Israel and Israel lasts for a long time. Hamas and those who support them, and it expanded to include other countries, especially Lebanon.
Marrakesh meetings at the pace of Georgia and the Gaza war:
Since the Director of the International Monetary Fund, Kristalina Georgieva, scored the goal in the friendly football match, which was held at the Grand Marrakech Stadium last Sunday, in solidarity with Morocco and the children of the victims of the recent earthquake in the country, on the eve of the opening of the annual meetings of the Fund and the World Bank.
She has continued throughout this week the show, on the move. Floating from one hall to another, in Bab Ighli, where the meetings are based, she distributes her permanent smiles and implicit or direct financial, monetary, and political messages, focusing on the Fund’s traditional prescriptions for structural reform and the use of debt within the usual conditions, while highlighting the importance of the role of youth and the greater involvement of women in the matter.
Economic and labor market especially, in light of an exhausted international economy, afflicted by conflicts, wars, epidemics, climate change, water scarcity, high prices, inflation, the cost of debt, weak growth, worsening disparities between countries, fires, floods, and increasing natural disasters.
Director General of the International Monetary Fund, Kristalina Georgieva, also looked radiant on the second day of meetings
Moroccan clothes
Georgivia wore colorful and embroidered Moroccan clothes all the time, and she always encouraged the quiet audience to applaud when she liked a sentence or a position, which suited the Fund’s orientations. She greeted the “masses” in the audience by raising her hands in the manner of leaders in election festivals.
She was proud of Morocco, “the brilliant student.” To the Bretton Woods institutions, which received more praise for their economic and development policies than any other country in the past four days, while arrows of criticism, blame, blaming, and reprimanding struck the worst models of failed countries such as Zambia, Ghana, and Lebanon.
(although Georgia arrived to attend the afternoon session Yesterday, there was an agreement to restructure debts with Zambia, which we will return to in a later episode about Africa’s economy and its concerns), in addition to shaking the stick at Egypt, demanding more flotation of the Egyptian pound and the withdrawal of state institutions from the economy, and “otherwise there is worse to come.”
Morocco passed the exam
Of course, Georgia would not have been able to score the football goal in the friendly match, without a pass from the Minister Delegate in charge of the Budget, the President of the Royal Football League and the 2030 World Cup Organizing Committee, Fawzi Lakjaa, and the flirtatious expressions and praises exchanged between her and the Moroccan Minister of Economy and Finance, Nadia Fattah.
Al-Alawi was bright. All of this and more was to show the basic message of the Fund and confirm that the model of the Kingdom of Morocco is the pride of the Fund’s models currently, which is unable to achieve similar achievements in other countries.
Financial Gathering
There is no doubt that Morocco succeeded with distinction in hosting the largest annual global economic and financial gathering, despite the devastating 6.8-magnitude earthquake that preceded the meetings just one month ago. His experience also contains “inspiring lessons for other economies,” especially in the Arab world and Africa.
“Morocco has embarked on a distinguished journey towards achieving economic stability and economic development,” over the past three decades, but it still has “a long way to go in its quest to achieve strong, resilient, and inclusive growth.
And the fruits of economic development are still far from reach.” “A large portion of Morocco’s population, especially youth and women, due to the high level of unemployment among them and the presence of a large informal economic sector.
However, something distinctive highlights Morocco’s experience, which is the awareness of decision-makers that addressing these issues will require a new series of bold and ambitious reforms.” As stated in the book “Morocco’s Efforts for Stronger and Inclusive Growth,” which the Fund published on the eve of the meetings.
I’m Hassan Saeed, a Clinical Psychology graduate deeply engaged in the realms of WordPress, blogging, and technology. I enjoy merging my psychological background with the digital landscape. Let’s connect and explore these exciting intersections!
