As the U.S. continues to experience historically high inflation rates and increasing risks to its economy, it also faces a number of global geoeconomic challenges. These include the end of the era of globalization, rising financial instability and pressures to increase the production of certain strategically important goods for domestic use or export to friendly neighbors. Meanwhile, the U.S. and other countries are also contending with the economic implications of social, political and technological developments, such as population aging, greater competition from abroad, growing inequality, innovation and its impact on the labor market, and the global transition to cleaner energy sources.
On May 22 at Baker Hall, World Bank Group President David Malpass joined John W. Diamond, Director of the Center for Public Finance at the Baker Institute, to discuss the geoeconomic challenges — and opportunities — facing the United States and the world, and how to navigate them.
Brazil is highly exposed to climate change risks. The impacts of global climate change risks and local practices on the Amazon and Cerrado biomes are of particular concern, as they provide vital ecosystem services to Brazil, the South American region, and the world. The Brazil Country Climate and Development Report (CCDR) examines the implications of climate change and climate action for Brazil’s development objectives and priorities. It identifies opportunities for Brazil to achieve both its development goals and its climate commitments. It lays out a combination of sectoral and economy-wide policy reforms, as well as targeted investments in near- and medium-term mitigation and adaptation measures to achieve more rapid and inclusive development with lower greenhouse gas (GHG) emissions. The idea is to maximize synergies between climate and development objectives, while addressing trade-offs among policy objectives and key transition challenges.
As the debt crisis has unfolded in many of the world’s poorest countries, much attention has focused on seeking individual debt restructurings through the G20 Common Framework. This remains a priority, but the implementation remains slow and lacks the predictability needed to provide debtors and creditors with confidence. The Global Sovereign Debt Roundtable and the April 26 World Bank debt conference, Breaking the Impasse in Global Debt Restructuring, discussed effective debt restructurings and debt sustainability. The conference also addressed how to avoid excessive debt build-up; and pressing questions regarding the debt sustainability implications of a decline of net international reserves into negative territory as countries draw on debt-like instruments such as swap lines. Following this week’s G7 Finance Ministers and Central Bank Governors meeting in Japan, we will publish the initial findings from a recent debt reconciliation initiative, which points to many technical challenges in agreeing on the amounts of debt to be treated in a restructuring.
Every debt crisis begins with unheeded warnings and ends with severe limits on investment in education, health, and infrastructure among other things. These crises often spark civil unrest and government collapse, delivering a lasting setback to the growth prospects of the affected country.
With a few taps on a smartphone, I can check the weather, send messages to friends around the world, review my bank account, or even order food. But even in our hyper-connected, data-driven world, it’s exceedingly difficult to pin down government debt – even for researchers with advanced skills and access to big databases. And that’s not for lack of trying.
On May 26th 2022, World Bank Group’s President, David Malpass, and Masood Ahmed, President of the Center for Global Development, will hold a conversation about the array of global shocks, their impact on the most vulnerable communities—and the response they urgently demand.
From conflict to COVID to climate change, overlapping crises have created unprecedented challenges for developing countries. Debt vulnerabilities, rising inflation, higher energy prices and food insecurity are threatening to reverse development gains. These growing challenges require decisive policy action and sustained international cooperation on multiple fronts to ensure economic conditions improve in all countries, especially the poorest. David Malpass and Masood Ahmed will exchange views on macroeconomic and political instability; and what is required for economic transformation.
The Way Forward is an occasional series of in-depth discussions on development challenges and innovative solutions, hosted by World Bank Group David Malpass.
As countries grapple with the impact of COVID-19, policy makers are seeking effective, balanced solutions to address both public health and economic recovery challenges. To understand which approaches have been successful and how these might help other countries and regions, policy makers from Colombia, Ghana, South Africa, Vietnam, and Italy’s Veneto region shared with us their stories of response and recovery.
Since the COVID-19 outbreak, developing economies have suffered unprecedented capital outflows. The World Bank Group has created a virtual one-stop for the latest information about Debt Service Suspension Initiative (DSSI). It highlights the potential savings for each eligible country—both in dollar terms and as a percentage of GDP. Explore the data!
The COVID-19 pandemic is uncharted territory for every country in the world. It has unleashed both a global health emergency and an unprecedented economic crisis of historic magnitude. Even as the coronavirus continues to spread, the World Bank estimates that, between 2019 and 2020, the global economy will shrink by $4.2 trillion dollars. That is substantially bigger than South Asia’s entire regional economy (which is about $3.5 trillion), and as if we somehow wiped both Germany and Belgium off the economic map. Worse still, the fall from where we expected to be in 2021 if COVID-19 hadn’t hit is closer to $7.5 trillion dollars—equivalent to 40% of the entire U.S. economy, as well as larger than the combined GDP of Latin America and the Caribbean plus the Middle East and North Africa.