The review of the global financial architecture is necessary

2023-10-13 11:49:54

The Sovereign addressed a message to the participants of the Annual Meetings of the WB and the IMF in which he outlined the economic developments experienced by Morocco as well as common global challenges. This plenary session was also marked by interventions by the President of the IMF, Kristalina Georgieva and the President of the World Bank, Ayaj Banga. The details.

The Annual Meetings of the World Bank and the International Monetary Fund continue in Marrakech until October 15, 2023. This event was marked by the message sent by His Majesty King Mohammed VI to the participants during the plenary session which took place took place on October 13, 2023. This speech was read by Omar Kabbaj, Advisor to His Majesty the King. “The economic, social and political developments of recent years certainly call for a reform of the institutions and rules governing multilateralism. Nevertheless, the basic principles of the latter must be consolidated and the spirit which animates it revived,” indicates the Sovereign. And to continue: “They indeed remain essential to preserve global stability and peace and promote synergies so that the common challenges facing our planet and our people are met. But, as we all know, global challenges require global solutions and these can only be designed through unity and mutual respect. To do this, it is necessary to integrate and promote diversity as a source of wealth and not of conflict, taking into account the intrinsic specificities of each country and each region. In the message addressed to the participants, His Majesty the King emphasized the importance of reviewing and improving the global financial architecture to make it fairer and more inclusive.

“These Annual Meetings constitute, in this regard, the appropriate forum for a dialogue and a constructive debate around this overhaul,” he specifies. In this sense, he underlines: “Our approach favors economic openness and cooperation. Moreover, we are part of the various global agendas, in terms of economic development, the fight against climate change as well as in the fight against terrorism, money laundering and the rise in cyber insecurity that engenders the digital revolution”. King Mohammed VI, in his message, highlighted the priority axis of opening granted to South-South cooperation. “We are doing this according to a co-development approach with brother and friendly countries on the Continent,” he adds. And to continue: “At the internal level, we have, since the beginning of the 2000s, launched major societal, social and economic reforms, as well as a vast infrastructure program. At the same time, we have ensured the preservation of macroeconomic balances, which we consider to be guarantors of economic sovereignty and resilience.”
In his message, the sovereign evokes the balanced approach adopted where economic policy is mobilized in the service of human development also citing the project of generalization of social protection in the Kingdom. “The impact of this vision is already palpable: the national economy has displayed notable resilience in this complex and uncertain international environment marked by a succession of incredible shocks in recent years,” notes His Majesty the King. The Sovereign also underlines that Morocco “has consolidated its positioning as an island of peace, security and stability, a credible partner and a regional and continental economic and financial hub”. And to continue: “This is how We consider the hosting of these Assemblies by Morocco as the culmination of a long-standing partnership, built with the Bretton Woods institutions. It also demonstrates confidence in the solidity of our institutional framework and our infrastructure as well as in our commitment to contributing to the strengthening of international relations.”

Securing the necessary funding for a different world

“We must find a way to finance a different world where our climate is protected, where pandemics are manageable – even preventable, where food is abundant and where fragility and poverty are overcome,” underlines Ajay Banga, president of the World Bank during the plenary session of the 2023 Annual Meetings of the World Bank Group and the International Monetary Fund which took place in Marrakech, on October 13, 2023. The President of the World Bank explained that the world is currently facing a setback in the fight against poverty, an existential climate crisis, food insecurity and fragility as well as a weak post-pandemic recovery. Ajay Banga also spoke about the challenges and geopolitical complexity of the current context which exacerbate inequalities. “Economic growth in many developing countries is declining. It has fallen from 6 to 5% over the last 20 years and is expected to reach 4% in the next 7 years. For every percentage point lost, 100 million people fall into poverty and 50 million into extreme poverty,” he says.

Follow the principles of the Marrakech Declaration

For her part, Kristalina Georgieva, the Managing Director of the International Monetary Fund (IMF) returned to the prospects for economic recovery. “As we showed in the World Economic Outlook we released a few days ago, while the world has demonstrated spectacular resilience, the recovery from the shocks of recent years is slow and uneven” . And to explain: “Slow, because with a rate of 3%, growth is currently well below the average of the twenty years preceding the pandemic, and the medium-term growth prospects are also the weakest we have seen for decades. Uneven, because the economic after-effects of recent shocks vary greatly from one country to another, with emerging and developing countries clearly being the hardest hit.” According to the official, “after a long period of economic convergence, a dangerous divergence between countries and regions has emerged, worsened by fragmentation, climate change and fragility, which have brought many countries to a breaking point” citing in this regard the case of the African continent, which is home to the youngest population in the world. “Over the next 50 years, it will be essential to reduce the income gap with more advanced countries and generate job-creating growth,” she says. The Managing Director of the IMF emphasized the principles of the Marrakech Declaration. In this regard, she cites two priorities, namely the need to invest on solid economic foundations and to invest in global cooperation. “The scenario of inclusive and sustainable growth over the next 50 years is only possible if we work together, here again in the spirit of the Marrakech principles. Climate action and trade are obvious examples,” concludes the IMF Managing Director.