IMF managing director stresses support for middle-income countries to achieve growth

April 08, 2024 (MLN): Kristalina Georgieva, Managing Director International Monetary Fund, has emphasized that to achieve a global high-growth trajectory, one of key factors for IMF involves strengthening support for vulnerable middle-income and low-income countries.

“There is a recognition that the fund's role in low-income countries is significantly broader and bigger today. And the membership is prepared to support it for it,” she said during a conversation with Masood Ahmed, President of the Center for Global Development (CGD).

To recall, in a recent speech at King’s College, Cambridge, Kristalina Georgieva presented a thought-provoking vision for the economic prospects of future generations.

She outlined two potential scenarios for the next century: one where per capita incomes and living standards could double, and another, more optimistic one, where they could increase tenfold.

While talking to President of CGD on Tuesday, she said that the deciding factors between these two trajectories hinge on few key critical elements including technology adoption and capital allocation.

Georgieva emphasized the need to direct capital towards countries with growing populations and burgeoning youthful labor forces, as well as to support green and digital transformations.

She emphasized that the IMF has two equally important tasks.

The first is to ensure that the Fund possesses the financial capacity to operate and provide support to those in greatest need, particularly vulnerable middle-income and low-income countries.

Secondly, she highlighted the importance of uniting the IMF membership. Despite the difficulties in cooperation, she underscored the imperative of working towards consensus on issues vital to the future of future generations.

The managing director of the IMF stated that the Fund aspires to assist countries in building strong fundamentals, thereby reducing their reliance on external support.

The IMF achieves this goal by engaging with countries to assess various factors such as their revenue collection, especially from the richer part of their population, as well as the efficient and effective investment of these revenues in infrastructure and human capital.

Furthermore, they evaluate whether countries are creating environment for entrepreneurship that can generate jobs.

Emphasizing a key lesson learned from the pandemic, she reiterated that countries with strong fundamentals are better equipped to withstand economic shocks and have a better opportunity to grow.

The IMF is also focusing on assisting countries in designing social protection systems that do not create dependency, but provide an opportunity to grow.

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