How the IMF can navigate great power rivalry
How the IMF can navigate great power rivalry Atlantic Council
sdgtalks
Introduction
The International Monetary Fund (IMF) was established in 1944 with the goal of monitoring the international monetary system and global economic developments to identify risks and recommend policies for growth and financial stability. Over time, the IMF has adjusted its functions and framework to remain relevant to its 190 member countries. However, several changes in the international monetary system have posed challenges for the IMF. This article will analyze three dimensions of these challenges and suggest ways to address them.
I. Great power competition raises mistrust and undermines cooperation
The strategic competition between the United States and China has intensified in recent years, leading to mistrust and hostility between the two countries. This has undermined their willingness and ability to cooperate on global challenges, including within international organizations like the IMF. The competition has also resulted in policies that deviate from the IMF’s traditional model of open market economies and free trade. The IMF must reconcile its model with the new concerns of its members or change its policy advice orientation.
II. Policies to promote derisking have deviated from the IMF template
In response to geopolitical tensions, countries have implemented policies to reduce their vulnerability and exposure to each other. These policies, such as trade and investment controls and industrial policy, deviate from the IMF’s model of open market economies and free trade. The IMF must find ways to reconcile its model with these new concerns or modify its model to incorporate national security and environmental and social protection.
III. Coping with the consequences of fragmentation
The fragmentation of the global trade, payment, monetary, and financial systems, as well as declining international cooperation, has had negative impacts on the global economy. The IMF must find ways to help member countries mitigate these impacts, such as analyzing the cost and benefits of geopolitical contention and fragmentation, providing technical assistance for administrative processes, and advising on sustainable economic growth and financial stability.
Conclusion
The future of the IMF depends on the willingness and ability of its member countries to work together for common solutions. The IMF can leverage its membership and analytical capabilities to support necessary measures and help countries adopt policies that are least damaging to the global economy. However, the IMF must also adapt to the changing geopolitical landscape and find ways to mitigate the negative impacts of fragmentation on the global economy and financial system.
About the author
Hung Tran is a nonresident senior fellow at the Atlantic Council’s GeoEconomics Center. He has extensive experience in international finance and previously served as a deputy director at the International Monetary Fund.
SDGs, Targets, and Indicators
-
SDG 8: Decent Work and Economic Growth
- Target 8.1: Sustain per capita economic growth in accordance with national circumstances and, in particular, at least 7 percent gross domestic product growth per annum in the least developed countries
- Indicator: Gross domestic product (GDP) growth rate
-
SDG 10: Reduced Inequalities
- Target 10.4: Adopt policies, especially fiscal, wage and social protection policies, and progressively achieve greater equality
- Indicator: Gini coefficient (a measure of income inequality)
-
SDG 13: Climate Action
- Target 13.1: Strengthen resilience and adaptive capacity to climate-related hazards and natural disasters in all countries
- Indicator: Number of deaths, missing persons, and directly affected people attributed to disasters per 100,000 population
| SDGs | Targets | Indicators |
|---|---|---|
| SDG 8: Decent Work and Economic Growth | Target 8.1: Sustain per capita economic growth in accordance with national circumstances and, in particular, at least 7 percent gross domestic product growth per annum in the least developed countries | Gross domestic product (GDP) growth rate |
| SDG 10: Reduced Inequalities | Target 10.4: Adopt policies, especially fiscal, wage and social protection policies, and progressively achieve greater equality | Gini coefficient (a measure of income inequality) |
| SDG 13: Climate Action | Target 13.1: Strengthen resilience and adaptive capacity to climate-related hazards and natural disasters in all countries | Number of deaths, missing persons, and directly affected people attributed to disasters per 100,000 population |
Behold! This splendid article springs forth from the wellspring of knowledge, shaped by a wondrous proprietary AI technology that delved into a vast ocean of data, illuminating the path towards the Sustainable Development Goals. Remember that all rights are reserved by SDG Investors LLC, empowering us to champion progress together.
Source: atlanticcouncil.org
Join us, as fellow seekers of change, on a transformative journey at https://sdgtalks.ai/welcome, where you can become a member and actively contribute to shaping a brighter future.
