Washington: International Monetary Fund Managing Director Christine Lagarde said on Thursday she believes the IMF can work successfully with the Trump administration to improve the global trading system, but added that open trade must be preserved as a growth engine.
Lagarde told a news conference at the opening of the IMF and World Bank spring meetings in Washington that the IMF saw the need to reduce subsidies and other trade distortions that limit competition, but also said “protectionist measures” needed to be avoided.
“From the various contacts that I’ve had with the administration so far, I have every reason to believe that we will make progress, that we will cooperate all together in order to support and indeed improve the system as we have it,” Lagarde said.
World Bank financing efforts
At the same meeting, World Bank President Jim Yong Kim said he is “encouraged” by the Trump administration’s interest so far in the multilateral lender’s mission and its plans to harness more private capital for development finance. Kim said in an interview that Trump administration officials, including US Treasury Secretary Steven Mnuchin, have been asking questions about the bank’s views on solving development problems.
“Speaking with President Trump directly, I told him about the need to make this shift, to work more effectively with the private sector, he was very enthusiastic about that,” Kim said.
Kim further said that the multilateral lender does not plan to change its stance on financing alternative energy projects and mitigating the effects of climate change.
Asked about the Trump administration’s scepticism about climate change at a news conference, Kim said the World Bank would continue to work with governments and the private sector to boost financing for alternative energy, especially in China, India, Indonesia, the Philippines, Pakistan and Vietnam. “The science of climate change didn’t change with any particular election, and I don’t see that it will,” Kim said.
“We have to be an evidence-based organisation.”
Factbox: UK to drop out of the world’s five largest economies by 2020
The UK’s global economic power is waning. Britain is set to drop out of the world’s five largest economies by 2020 based on gross domestic product in nominal terms, according to the IMF estimates published this week.
India is set to leapfrog Germany to rank fourth globally by 2022, pushing the UK down to sixth place behind its European peer. The slide in Britain’s relative size comes as the nation sets out to redefine its trading relationship with the rest of the world after Brexit.
The rankings also highlight India’s rapid rise, with the economy expanding 9.9 per cent per year. By contrast, the IMF projects the UK will grow just 2 per cent this year and 1.8 per cent in 2018, impeded in part by “the negative effects of the United Kingdom’s decision to leave the European Union”.
— Bloomberg
