IMF warns global economic dissolution amid Ukraine war

Russia’s invasion of Ukraine, the International Monetary Fund (IMF) has warned against global economic dissolution, saying that erasing decades of integration will make the world poorer and more dangerous.

After more than 30 nations limited trade in food, energy, and other critical commodities, IMF Managing Director Kristalina Georgieva urged that governments should decrease trade barriers to alleviate shortages and lower prices.

Georgieva made the remarks in a blog post with Gita Gopinath, the fund’s first deputy managing director, and Ceyla Pazarbasioglu, the head of the strategy, policy, and review department, ahead of the World Economic Forum this week in Davos, Switzerland.

They recommended that countries diversify their imports to safeguard supply chains and avoid output losses due to disruptions.

The officials also suggested that the Group of 20’s shared framework for dealing with debt restructuring be improved to assist cope with vulnerabilities.

“The costs of further disintegration would be enormous across countries,” they said. “And people at every income level would be hurt — from highly paid professionals and middle-income factory workers who export, to low-paid workers who depend on food imports to survive. More people will embark on perilous journeys to seek opportunity elsewhere.”

The IMF official said that cross-border payment systems should be updated, with nations cooperating to build a public digital platform for managing remittances to decrease costs and increase security.

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