JOHANNESBURG — The annual summit of the African Growth and Opportunity Act — a program that has provided eligible sub-Saharan African countries with duty-free access to the U.S. economy since 2000 — wrapped up in South Africa on Saturday.

Under AGOA, total goods imports into the United States were worth about $10 billion in 2022, compared with $6.8 billion in 2021. African leaders are asking the U.S. Congress to renew the trade policy for another 10 years or more before it expires in 2025.

To be eligible for AGOA, nations must respect the rule of law and protect human rights. On Monday, U.S. President Joe Biden said four countries would be dropped from AGOA: Niger and Gabon for coup d’etats, and the Central African Republic and Uganda for human rights violations.

On Saturday, U.S. Trade Representative Katherine Tai sat down with several reporters to answer questions about AGOA’s future. The following transcript has been edited for brevity and clarity:

VOA: China is Africa’s largest trade partner; how can the U.S. compete and how do the two countries’ approaches to trade with Africa differ?

U.S. Trade Representative Katherine Tai: Let me start … with what the basis for our relationship is, which is that the U.S. partnership with the countries of Africa is inherently valuable vis-à-vis ourselves, first and foremost. Our historical ties, our people-to-people ties, the fact that the United States grew out of our own colonial past, there are so many points of shared cultural, historical narrative. That is the cornerstone of our partnership.

Beyond that, we look at the demographics of Africa. … By the year 2050, one in four human beings on this planet will be African. Then you look at the median age of the population in Africa and you compare it to the median age in different places and you realize that the future is Africa. The potential — human potential, the economic potential — of Africa, that is another reason why we know that charting our own path for the future necessarily involves partnership with Africa. So, there is the reason why we are here.

Separately, let me turn to your question on China. Yes, China’s footprint in the global economy in terms of trade is enormous. We know that; that is true in many of our conversations around the world. We feel very strongly that the type of partnership the United States brings and can bring is inherently different from what other partners bring and that is why we are focused on enhancing and building on a U.S. partnership with Africa.

Tai addressed other reporters’ questions regarding the U.S. relationship with countries in Africa.

Q: Yesterday, a representative of an African country told me ‘We don’t want Western democracy imposed on Africa.’ How do you cope with this?

Tai: Obviously there’s not just one form of democracy, we all have our versions of democracy. But broadly speaking, I think when we talk about democracy, you break it down, it’s about a system of government where the people have the right and power to select their government. … I don’t think AGOA dictates the specific kind of democracy, I think the way that I have phrased it is AGOA is set up to support African solutions to the political and economic reforms that AGOA’s meant to encourage.

Q: How is the U.S. relationship with South Africa, owing to South Africa’s stance on the Ukraine crisis?

Tai: Now recall I’m the U.S. trade representative, so I am an economic policy team member. So let me focus on the U.S.-South Africa economic relationship. Let’s acknowledge that we live in a very complex world that is only becoming more complicated. That said, I think that the relationship overall, and the relationships on a more human level, are strong, on the economic side, which is where my competency lies. …

We all need to figure out how to navigate this complex world, and I have a high degree of confidence, at least on the economic side, that we have managed to navigate some choppy waters this year and that we will continue to do our best to do so. I think the South African government, on this trip, at this forum, has indicated the strength of its support for the economic relationship with the United States.

VOA: It has been a thorny issue, Africa wants to be developed, and as long as we continue to send raw materials outside of Africa, we are not going to learn the skills. What’s your view?

Tai: As I understand it, you’re talking about: How does Africa and the countries in Africa move up the value chain and industrialize? And I think that that is the challenge of economic development. We in the United States are focused also on a reindustrialization project, having gone through a period of deindustrialization, so it’s made for a period of very interesting conversations while I’ve been here.

I think that that is a tremendously important question that we all have to figure out. In my instincts, I feel convinced that as globalization evolves, because we see that it is needing to evolve … the next iteration of globalization should do a better job than this past one. … This next one has to involve a development program that looks at how we can more effectively partner between advanced economies and emerging economies to provide a win-win solution to development.

And I think that the basic principle is going to be, if you take President Biden’s outlook, that we’re trying to rebuild and reinvigorate our middle class, how through trade policy could we help each other build our middle classes?

How do we do it in a way that we’re not pitting our middle class against your middle class, our workers against your workers? How do we think more about trade being a complementary exercise as opposed to a cut-throat competition? … I have been really, really privileged to work with our partners on the African continent on how we solve that problem.

Q: We’ve heard, especially from Republican members of Congress, that they are going to want to look at enforcement of eligibility because some of them have said they don’t think the administration is doing a good job of implementing enforcement. So, what do you say to that?

Tai: I don’t know who exactly else they would like to suspend from AGOA, but there is an annual review process, it is a very rigorous process … a lot of deliberation goes into it and the calls are not easy.

Source : VOA News

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1. Opening and adoption of the agenda

The UK Co-Chair, the Rt Hon James Cleverly MP, Secretary of State for Foreign, Commonwealth and Development Affairs, opened the meeting by welcoming the Windsor Framework agreement and looked forward to improved cooperation in a range of areas under the Trade and Cooperation Agreement (TCA), including the parties’ shared interests in energy security, the green transition, trade, science and research. The UK highlighted its desire to maximise the potential of the TCA to the benefit of citizens, businesses and civil society.

The EU Co-Chair, European Commission Vice-President Maroš Šefčovič, highlighted that the Windsor Framework marked a turning point in how both parties work together collaboratively and constructively.

The agenda was adopted.

2. Energy

The UK opened this item by emphasising the importance of collaboration on energy, as Europe decouples from Russian hydrocarbons. The UK reiterated the importance of close cooperation between governments and the parties’ respective technical experts including Transmission System Operators (TSOs) on issues such as security of supply. The UK also emphasised that the implementation of the electricity trading provisions in the TCA should progress at pace, and that efficient trading is important to realise the benefits of offshore renewables in the North Sea.

The UK noted that it welcomed the EU’s climate ambitions. On the EU Green Deal Industrial Plan (GDIP) in particular, the UK asked to understand better how the GDIP proposals were compliant with the TCA.

The EU emphasised that their goals on climate change and on shifting away from reliance on Russian gas supplies were aligned with the UK. On electricity trading the EU noted that the practical implementation of this work had proved more difficult than both the EU and the UK had anticipated during the negotiations but that the Specialised Committee on Energy was pressing ahead with this work. On security of supply the EU noted that constructive cooperation had taken place throughout this winter, which would also be necessary next winter. The EU confirmed that the Specialised Committee on Energy should progress the TSO working arrangements envisaged in the TCA.

In response to the UK’s question on GDIP, the EU laid out its policy aims in this area and the 4 key pillars of the plan. The EU stated that the GDIP aimed to strengthen the EU’s sovereignty on energy supply and to help achieve the EU’s transition to climate neutrality by 2050. The EU emphasised that GDIP aligned with all its international obligations, including under the TCA.

3. Regulation

The EU confirmed its efforts to complete internal procedures required for signing a Memorandum of Understanding (MoU) on Financial Services soon, which would establish the EU-UK financial regulatory forum. On TCA Working Groups it highlighted that both sides should enable Working Groups to meet and agree model Rules of Procedure given the new context post negotiation of the Windsor Framework, but stated that Working Groups should only meet when both parties agree to do so. The EU also indicated that cooperation between the UK and EU Intellectual Property Offices (IPOs) is important. The EU co-chair said that he was ready to make contact with the EU IPO to encourage it to cooperate with the UK IPO, in line with current EU IPO’s practice on cooperation with third counties’ offices, which usually takes place on the basis of an MoU.

The UK highlighted that the TCA is a good framework to support regulatory cooperation and that it was seeking to maximise opportunities in this area under the agreement, including through suggesting practical improvements in areas like automotives, medical products and organics. The UK looked forward to the finalisation of the Financial Services MoU soon, noting that a close dialogue in this area was in both parties’ interests given the scale of cross border trade and investment between the UK and EU. The UK also welcomed increased cooperation between the parties’ respective IPOs via the MoU currently in train and the standing up of TCA Working Groups soon.

The EU raised its concerns as regards the UK’s Retained EU Law (REUL) Bill and the Bill of Rights Bill. In respect of the Retained EU Law (REUL) Bill, the EU raised concerns in respect of the United Kingdom’s obligations under the Withdrawal Agreement and the TCA and that the Bill could give rise to significant regulatory divergence. In respect of the Bill of Rights Bill, the EU said that it raises questions for them in relation to the right to an effective remedy and the binding character of the decisions of the European Court of Human Rights. The EU requested that UK and EU technical experts meet to discuss the REUL Bill further.

On both Bills, the UK noted that these bills were pending before the UK Parliament responded that its approach was consistent with its international obligations and noted high standards across areas such as the environment, workers’ rights, health and safety.

4. Security

The UK and EU both highlighted their broad cooperation in responding to Russia’s illegal invasion of Ukraine, and that this was a reminder of the parties’ shared values and commitment to European security.

The UK highlighted the parties’ shared interest in the protection of open, stable and secure cyberspace, and proposed establishing a regular dialogue, as provided for in Article 703 TCA, on cyber issues, which the EU agreed to. To make the most of the TCA the parties also agreed to establish a regular dialogue on counterterrorism, as provided for in Article 768(3) TCA, to send a message on their strong partnership in this area.

The EU outlined the utmost importance that the United Kingdom fully implements the TCA by no later than 1 January 2024 and enables the automatic deletion of passenger name record (PNR) data of passengers after their departure from the UK, unless a risk assessment indicates a need to retain it, noting that the current interim period could not be extended further. It asked the UK for an update on implementation. The UK confirmed it was on track to complete the technical adjustments to the UK PNR data systems by the end of the year. The parties agreed that the Specialised Committee on Law Enforcement and Judicial Cooperation would return to this issue when it next meets, where the UK would welcome an update on the EU’s treatment of UK PNR data.

5. Union programmes

The UK opened this item by welcoming the EU’s recent openness to discuss UK association to EU programmes following the agreement of the Windsor Framework. The UK looked forward to approaching these discussions constructively, whilst emphasising its priority was to support the UK R&D sector. As both parties discussed a way forward, the UK emphasised the need to reflect the impact of over 2 years of missed participation in EU programmes.

The EU stressed that it continued to recognise the mutual benefit of cooperation in science, research and innovation, nuclear research and space. The EU emphasised that, in its view, the agreement of the Windsor Framework allowed the parties to deepen cooperation in line with the terms agreed under the TCA. The EU was clear that UK association to Horizon Europe, Euratom Research and Training Programme, Fusion for Energy/ITER, Copernicus and Space Surveillance and Tracking, as of 2023, could now happen swiftly, based on the quick agreement of limited amendments to the draft Protocols. The EU also noted that the UK should not be bound to make financial contributions for 2021 and 2022, ie when it was not associated.

Both parties looked forward to the co-chairs of the Specialised Committee on Participation in Union Programmes engaging in discussions in the coming weeks.

6. Any other business (AOB)

Target Operating Model (TOM)

The EU asked when to expect further details on UK import controls, the changes to which have been previously postponed. The EU stated that operators from both sides of the Channel wanted details of the UK’s Target Operating Model (TOM) as soon as possible, so that they have sufficient time to adapt to any new rules. The UK confirmed that the draft TOM would be published soon.

Fiscal representatives

The UK highlighted its desire to lower the TCA debt recovery threshold to avoid the unnecessary cost for UK businesses and EU consumers of having to establish a fiscal representative in both jurisdictions. The EU indicated that its position had not changed on this issue and stated that it was focused on implementing the VAT Protocol.

Touring artists

The UK raised the issue of UK touring artists and thanked the TCA Parliamentary Partnership Assembly for their discussion of this issue. The UK emphasised that it was keen to protect the broader contribution that touring creatives brought to the UK and EU. In response, the EU maintained that this issue has been covered at length in previous occasions and recalled that the situation of UK touring artists was the result of the UK leaving the single market, including the free movement of persons, and the customs union.

Live Bivalve Molluscs (LBMs) and seed potatoes

Finally, the UK raised the EU’s prohibition on undepurated Live Bivalve Molluscs from Class B waters and seed potatoes. The UK restated its outstanding request for a risk assessment underpinning the EU’s prohibition, as requested via a letter sent to the EU in June 2022. The EU indicated that it would reply to the UK’s letter shortly.

Annex 1: Decisions and recommendations adopted by written procedure since the first meeting

Decision No 2/2021 of the Partnership Council as regards the extension of the interim period during which the United Kingdom may derogate from the obligation to delete Passenger Name Record data of passengers after their departure from the United Kingdom.

Decision No 1/2022 of the Partnership Council as regards the adoption of operational guidelines for the conduct of the Civil Society Forum.

Decision No 2/2022 of the Partnership Council as regards the second and last extension of the interim period during which the United Kingdom may derogate from the obligation to delete Passenger Name Record data of passengers after their departure from the United Kingdom.

Decision No 3/2022 of the Partnership Council establishing a list of individuals who are willing and able to serve as members of an arbitration tribunal under the Trade and Cooperation Agreement.

Annex 2: Participation list

UK delegation

• UK Co-chair of the Partnership Council
• UK government officials from the Foreign, Commonwealth and Development Office
• UK government official from the UK Mission to the European Union
• Scottish Government officials
• Northern Ireland Executive officials
• Welsh Government officials
• Officials from the Isle of Man, Bailiwick of Jersey and Bailiwick of Guernsey

EU delegation

• EU Co-chair of the Partnership Council
• European Commission officials
• EU officials from the European External Action Service and Delegation of the EU to the UK
• Representatives of EU member states

Source: UK Government

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The People’s Bank of China (PBOC), the country’s central bank, lowered the seven-day reverse repo rate for the first time since last August from 2 percent to 1.9 percent on Tuesday when injecting funds into the financial system through open market operations.

Later the same day, the PBOC also announced a cut on the interest rates of its standing lending facility, with the overnight rate down by 10 basis points to 2.75 percent.

Dong Ximiao, chief researcher at Merchants Union Consumer Finance Company Limited, said the reverse repo rate cut has reflected market supply and demand for funds while signaling further counter-cyclical adjustment and efforts to stabilize the market.

“As an important variable of the macroeconomy, the central bank’s rate cut on open market operations would facilitate market confidence,” said Wang Qing, an analyst with Golden Credit Rating, noting that the move would further propel China’s economic recovery in the second half of 2023.

The cuts came ahead of the PBOC’s release of the medium-term lending facility (MLF) rate and loan prime rate (LPR) decisions, which are set for Thursday and next week, respectively.

In August 2022, when the PBOC last cut the reverse repo rate by 10 basis points, the MLF rate was brought down the same day, while the LPR, a market-based benchmark lending rate, was lowered a week later.

In a circular issued late Tuesday by four state organs, including the National Development and Reform Commission, the Chinese government said it will work to lower financing costs for business entities and increase loans to small and micro firms.

China’s mild inflation has also left room for policy rate adjustments, according to analysts. In the first five months of 2023, the country’s consumer price index (CPI), a major gauge of inflation, edged up 0.8 percent year on year.

The 10-basis-point reverse repo rate cut is a quite moderate move, according to Dong, who considered it conducive to striking a balance between multiple policy targets such as maintaining price and financial stabilities, supporting the real economy, and keeping the RMB exchange rate generally stable at an adaptive, balanced level.

Prior to this week’s rate cuts, China’s six state-owned commercial banks had moved to cut deposit rates by around 10 to 15 basis points, which will help replenish capital and boost their abilities to support the real economy.

PBOC Governor Yi Gang, during his inspection in Shanghai earlier this month, has pledged that the central bank will continue to precisely and effectively implement a prudent monetary policy while strengthening counter-cyclical adjustment, supporting the real economy, promoting employment and maintaining currency and financial stability.

The central bank will also better utilize monetary policy tools, maintain reasonably ample liquidity and keep the amount of currency and credit at an appropriate level and a steady pace, the governor said.  

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Enacting increasingly stringent Buy America provisions, undermining the rules-based global trading system, and engaging in below-zero-sum state aid arms races jeopardize all of these gains, said the report. “Other countries will not simply accept higher barriers to their products in the U.S. market without responding in kind. The result will be welfare losses and reduced productivity growth for all concerned.”

The Joe Biden administration is playing catch-up with a framework aimed at supply chain cooperation with Asian allies, but there is little momentum behind it because it does not improve access to the U.S. market for companies based in the partner countries, it said.

Noting that there are substantial costs for American consumers as they must purchase products made with domestic content requirements, which necessarily means higher-efficiency options are pushed aside and competition is reduced, it said that “with inflation running at levels not experienced since the 1980s, U.S. policymakers should prioritize giving consumers access to lower-priced options.”

Stressing that it is “political considerations” that has caused the current turn, it said that “more specifically, Democrats, who were shocked and traumatized by Hillary Clinton’s loss in 2016, have internalized the lesson they believe that campaign taught, which is never to let Republicans outflank them on protecting domestic industries with trade restrictions, especially in the manufacturing sector.” 

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The world’s second-largest economy purchased $114.1 billion worth of goods from Russia in 2022, up 44% from a year earlier, figures from China’s General Administration of Customs showed. By comparison, China’s total imports from around the globe were up just 1.1% for the year.

Exports to Russia rose about 13% to $76.1 billion. That led to a trade imbalance of more than triple what was seen in the previous year.

China has emerged as one of the only significant buyers – along with India and Turkiye – of crude from Russia, after the Group of Seven and European nations slapped sanctions designed to punish President Vladimir Putin for the invasion of Ukraine.

While China hasn’t joined the US and its allies in imposing a price cap on Russian oil, Beijing has enjoyed deep discounts for crude from Russia.

The country’s demand for energy is expected to pick up this year as the economy reopens following Beijing’s abandonment of Covid Zero.

Total crude imports by China jumped 41.4% last year from 2021 by value even though the volume edged down 0.9%, according to Chinese customs figures. That reflects the impact of spikes in international energy prices.

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As policymakers and business leaders gather at the World Economic Forum in Davos, they are facing a Gordian knot of challenges .

From the global economic slowdown and climate change to the cost-of-living crisis and high debt levels: there is no easy way to cut through it. Added to this are geopolitical tensions that have made it even more difficult to address vital global issues.

Indeed, even as we need more international cooperation on multiple fronts, we are facing the specter of a new Cold War that could see the world fragment into rival economic blocs. This would be a collective policy mistake that would leave everyone poorer and less secure.

It would also be a stunning reversal of fortune. After all, economic integration has helped billions of people become wealthier, healthier, and better educated. Since the end of the Cold War, the size of the global economy roughly tripled, and nearly 1.5 billion people were lifted out of extreme poverty. This peace and cooperation dividend should not be squandered.

Rising fragmentation risks

And yet, not everyone has benefited from global integration. Dislocations from trade and technological change have harmed some communities. Public support for economic openness has declined in several countries. And since the global financial crisis, cross-border flows of goods and capital have been leveling-off.

But that’s only part of the story. Trade tensions between the world’s two largest economies have been rising amid a global surge in new trade restrictions. Meanwhile, Russia’s invasion of Ukraine has caused not only human suffering, but also massive disruptions of financial, food, and energy flows across the globe.

Of course, countries have always placed some restrictions on trade in goods, services, and assets for legitimate economic and national security considerations. Supply chain disruptions during the COVID-19 pandemic have also increased the focus on economic security and making supply chains more resilient.

Since the outbreak, mentions in companies’ earnings presentations of reshoring, onshoring, and near-shoring have increased almost ten-fold. The risk is that policy interventions adopted in the name of economic or national security could have unintended consequences, or they could be used deliberately for economic gains at the expense of others.

That would be a dangerous slippery slope towards runaway geoeconomic fragmentation.

Estimates of the cost of fragmentation from recent studies vary widely. The longer-term cost of trade fragmentation alone could range from 0.2 percent of global output in a limited fragmentation scenario to almost 7 percent in a severe scenario—roughly equivalent to the combined annual output of Germany and Japan. If technological decoupling is added to the mix, some countries could see losses of up to 12 percent of GDP.

Yet, according to new IMF staff analysis, the full impact would likely be even larger, depending on how many channels of fragmentation are factored in. In addition to trade restrictions and barriers to the spread of technology, fragmentation could be felt through restrictions on cross-border migration, reduced capital flows, and a sharp decline in international cooperation that would leave us unable to address the challenges of a more shock-prone world.

This would be especially challenging for those who are most affected by fragmentation. Lower-income consumers in advanced economies would lose access to cheaper imported goods. Small, open-market economies would be hard-hit. Most of Asia would suffer due to its heavy reliance on open trade.

And emerging and developing economies would no longer benefit from technology spillovers that have boosted productivity growth and living standards. Instead of catching up to advanced economy income levels, the developing world would fall further behind.

Focus on what matters most: trade, debt, and climate action

So, how can we confront fragmentation? By taking a pragmatic approach. This means focusing on areas where cooperation is essential, and delay is not an option. It also means finding new ways to achieve common objectives. Let me highlight three priorities:

First, strengthen the international trade system.

In a global economy beset with low growth and high inflation, we need a much stronger trade engine. Trade growth is expected to decline in 2023, which makes it even more critical to roll back the distortionary subsidies and trade restrictions imposed in recent years.

Strengthening the role of trade in the global economy begins with vigorous World Trade Organization reform and by concluding WTO-based market-opening agreements. But finding agreement on complex trade issues remains challenging, given the diverse World Trade Organization membership, increasing complexity of trade policy, and heightened geopolitical tensions.

In some areas, plurilateral agreements, among subsets of WTO members, can offer a path forward. Take the recent agreement on regulatory cooperation in service industries—from finance to call centers—which can reduce the cost of providing services across borders.

We also need to be pragmatic about strengthening supply chains. To be clear, while most supply chains have been resilient, recent disruptions to food and energy supplies have raised legitimate concerns. Still, policy choices such as reshoring could leave countries more vulnerable to shocks. IMF research shows that diversification can cut potential economic losses from supply disruptions in half.

Meanwhile, countries should carefully weigh the costs, at home and abroad, of national security measures on trade or investment. We also need to develop guardrails to protect the vulnerable from unilateral actions. A good example is the recently agreed requirement to exclude from food export restrictions the exports to humanitarian agencies such as the World Food Program.

But these efforts, while important, aren’t enough. We also need better policies at home, from improving social safety nets, to investing in job training, to increasing worker mobility across industries, regions, and occupations. This is how we can ensure that trade works for all.

Second, help vulnerable countries deal with debt.

Fragmentation could make it even more difficult to help many vulnerable emerging and developing economies that have been hard hit by multiple shocks. Take one particular challenge that many countries face: debt. Fragmentation will make it harder to resolve sovereign debt crises, especially if key official creditors are divided along geopolitical lines.

About 15 percent of low-income countries are already in debt distress and an additional 45 percent are at high risk of debt distress. Among emerging markets, about 25 percent are at high risk and facing default-like borrowing spreads.

There are signs of progress on the Group of Twenty’s Common Framework for debt treatment: Chad recently reached an agreement with its official and private creditors; Zambia is progressing toward a debt restructuring; and Ghana just became the fourth country to seek treatment under the Common Framework, sending a signal that it is seen as an important pathway for debt resolution. But official creditors have a lot more work to do.

Countries seeking debt restructuring under the Framework will need greater certainty on processes and standards, as well as shorter and more predictable timelines. And we need to improve processes for countries not covered by the Framework. To support these improvements, the IMF, World Bank and Indian G20 presidency are working with borrowers and public and private creditors to quickly establish a global sovereign debt roundtable, where we can discuss current shortcomings and make progress to address them.

These and other pragmatic actions, such as further progress on majority voting provisions in sovereign loans and climate resilient debt clauses, can help improve debt resolution. That would reduce economic and financial uncertainty, while helping countries get back to investing in their future.

Third, step up climate action.

Collective action is just as vital to address the climate crisis. Just last year, we saw climate disasters on all five continents, with $165 billion in damages in the United States alone. It shows the massive economic and financial risks of unmitigated global warming.

But last year also brought some good news. The agreement at COP27 to set up a loss and damage fund for the most vulnerable countries shows that progress is possible with enough political will. Now we must take further pragmatic steps to cut emissions and curb fossil fuels.

One potential game changer could be an international carbon price floor among major emitters. It would focus on carbon pricing or equivalent measures in an equitable process that would complement and reinforce the Paris Agreement. Or consider the “just energy transition partnerships” between groups of donors and countries such as South Africa and Indonesia.

We also need to step up climate finance to help vulnerable countries adapt. Innovative use of public balance sheets—such as credit guarantees, equity and first-loss investments—can help mobilize billions of dollars in private financing.

And, of course, we need better data around climate projects: harmonized disclosure standards and principles will help, as will taxonomies to align investments to climate goals.

The role of the IMF

In all these areas, the IMF will continue to support its members—through policy advice, capacity development efforts, and financial support.

Since the start of the pandemic, we have provided $267 billion in new financing. And thanks to the collective will of our membership, we provided a record $650 billion allocation of special drawing rights, boosting our members’ reserves. This allowed many vulnerable countries to maintain access to liquidity, freeing up resources to pay for vaccines and health care.

And we are now helping countries with stronger reserves to channel their SDRs to countries whose need is greater. This pragmatic measure could make all the difference in many countries. So far, we have around $40 billion in SDR pledges to our new Resilience and Sustainability Trust, which will help low- and vulnerable middle-income countries address structural challenges such as pandemics and climate change.

In other words, we know the global issues that matter most, and we know that confronting fragmentation in these vital areas is essential.

Pragmatic measures to fight fragmentation may not be the simple sword swipe that cuts the Gordian knot of global challenges. But any progress we can make in rebuilding trust and boosting international cooperation will be critical.

The discussions in Davos will be a hopeful sign that we can move in the right direction and foster economic integration that brings peace and prosperity to all.

Source : IMF

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