Sun. May 29th, 2022

April 19, 2022

Thank you, Secretary Yellen, for your focus on growing food insecurity and to Assistant Secretary Latortue for moderating today’s discussion.

Russia’s invasion of Ukraine has created a crisis on top of a crisis—with devastating human costs and a massive setback for the global economy.

Our World Economic Outlook projects global growth slowing to 3.6 percent in 2022 from 6.1 percent in 2021. We have downgraded our forecast for 143 countries, representing 86 percent of global GDP.

Inflation is reaching the highest levels seen in decades. Sharply higher prices for food and fertilizers put pressure on households worldwide—especially for the poorest. And we know that food crises can unleash social unrest.

We need urgent action. A key lesson from the 2007/08 food crisis is that fast and well-coordinated actions are critical to maintain open trade, support vulnerable households, ensure sufficient agricultural supply, and address financing pressures. Last week, I joined with the heads of the World Bank, WFP, and WTO to call for an urgent coordinated response by the international community.

In that spirit, I fully support Secretary’s Yellen proposal for an IFI Action Plan.

At the IMF, we are committed to work closely with our partners, focusing on our macroeconomic expertise:

First, real-time analysis of the situation. We are assessing external financing needs across the most affected countries, complementing the food insecurity heatmap developed by UN agencies and others. We will also work with the WTO to ensure that global and regional markets function properly.

Second, we are providing tailored policy advice to country authorities to mitigate the impact of current food shortages and higher food prices through targeted fiscal policies, and help them build resilience to future shocks. The Fund’s new strategy on fragile and conflict-affected states will help support enhanced engagement with those countries most severely impacted by the food crisis.

Third, we will contribute to financing balance of payment needs caused by the spike in food prices. There are currently 40 countries with active IMF-supported programs that can be augmented to address additional financing needs. We are also ready to respond to financing requests from other countries, either through traditional programs or emergency financing where appropriate. We will coordinate with IFIs and donors and look to them to step up humanitarian assistance and grants for the hardest-hit low‑income countries. And we will deploy the new Resilience and Sustainability Trust to help countries adapt agriculture to a world of more frequent and severe climate shocks.

Finally, for several countries this food crisis comes on top of a debt crisis. Since 2015 the share of low‑income countries at or near debt distress has doubled, from 30 to 60 percent. For many, debt restructuring is a pressing priority. We need the G20 Common Framework to integrate lessons from experience and deliver for the countries turning to it for help—and we need large creditors, like China, and the private sector, to urgently step up their participation.

Let me end on a positive note: we know hunger is the world’s greatest solvable problem. A looming crisis is the time to act decisively — and solve it.

Thank you.

Source – IMF