By Emem Ekanem
A month after the earthquake that hit Morocco, the nation plays host to the 2023 World Bank, and International Monetary Fund annual meeting as the key players, which include the International Monetary Fund, World Bank Group, and the Government of Morocco, meet in Marrakech from October 9 to October 15 2023 to discuss global economic issues centered on Climate, debt, and global governance.
Less than a two-hour drive from where families sleep in tents and earthquake rubble remains in piles, the world’s most powerful financial institutions are gathering for a week of discussions on economic challenges during times of war and climate change.
The decision to host their annual meeting in Marrakech, Morocco, was reached by the International Monetary Fund (IMF) and World Bank as far back as 2018, bringing the affair to the African continent for the first time in fifty (50) years.
The original timeline was, however, delayed twice due to the COVID-19 pandemic as the whole world came to a standstill and a threat of a third delay as a result of last month’s earthquake in Morocco. But the meeting beginning Monday, 9th October 2023, finally kicks off and comes at a much-needed time.
After the devastating earthquake, which saw the death of nearly three thousand (3,000) and wreaked 11.7 billion Dollars ($11.7bn) in damages last month, both officials and civil society groups are eagerly participating in discussions about how to promote economic resilience in light of natural disaster.
According to the IMF’s Managing Director, Kristalina Georgieva in a speech last Thursday, “In no other area is the need for international cooperation as evident as in addressing the existential threat of climate change. The world has a responsibility to stand with vulnerable countries as they deal with shocks they have not caused.” She further stressed that “a prosperous 21st century requires a prosperous Africa.”
The choice of location for this meeting is particularly significant given the many challenges Africa is dealing with. A number of countries are struggling with a debt crisis, while the outcome of climate change and poverty rate, which is reducing at an even slower rate than elsewhere, are hitting the continent really hard.
One of the first measures to be discussed was the creation of a third seat which will be granted to African countries on the boards of directors of each of the two financial institutions. This is a symbolic gesture but beyond that, the main goals of both the World Bank and the International Monetary Fund are helping countries in difficulty, poverty reduction, and most importantly, climate financing.
Despite the above-stated goals, funding remains a problem as the main countries are not in favour of a capital increase that would compel them to make more payments or add more influence or power to the already large emerging countries, with China and India in lead positions.
The IMF and the World Bank, often regarded as lenders of last resort, use billions in loans to anchor struggling economies and encourage countries operating in deficit to implement reforms they believe promote growth and stability. But the two institutions are not without their faults as they have been criticized for shutting out the nations in most need from their governance and decision-making process, thus demanding painful spending cuts (austerity) and widening the gap between the world’s rich countries and poor.
Recall in June, the Secretary General of the United Nations, Antonio Guterres voiced his criticism, stating that the International Monetary Fund (IMF) and the World Bank’s response to the COVID-19 pandemic was below par, calling it a “glaring failure” that left dozens of countries beholden.
The Director of the Morocco-based Imal Initiative for Climate and Development, Iskander Erzini Vernoit stated, “It’s a time of multiple crises, particularly for Arab and African countries who have been hit by various exogenous shocks, not of their own making…”
Examples of those shocks include the pandemic and rising energy and costs of food brought about by the war in Ukraine. The challenges are particularly noticeable in Africa, where many countries spend so much more on debt than education and health care put together. According to certain critics, the terms of many loans offered force many African governments from Egypt to Zambia to choose between paying debts and implementing unpopular spending cuts which include but are not limited to tax reforms or making cuts to subsidies for food or energy. Africa is also among the places most vulnerable to the effects of climate change, and critics have called upon the World Bank and International Monetary Fund (IMF) to increasingly factor climate resiliency when making its decisions.
Certain NGOs have, however, criticized the potential outcome of the week-long meeting in Marrakech, citing what they see as a lack of will on the part of the institution as an impediment to any major breakthrough especially on the subject of climate financing.
