"I am among those who know what are the consequences of a Cold War. "I don't want to see that repeating,"Kristalina Georgieva said during a press conference at the official start of the World Bank and IMF's spring meetings.
Georgieva was born and raised in Bulgaria, a former Soviet satellite state.
Multilateral institutions like the World Bank and IMF have an important role to play in preventing the world from splintering into different blocs with severe economic consequences, she said.
An IMF report earlier this week predicted that growing trade fragmentation resulting from events like Brexit, the US-China trade war and the Russian invasion of Ukraine, could make the global economy as much as seven percent smaller than it otherwise would have been.
"If we fail to be more rational, then people everywhere will be worse off," she said.
Progress has been made on a number of key issues for the World Bank and IMF, the Bank's outgoing president, David Malpass, said Thursday.
Member states have agreed on a number of steps to boost the World Bank's financial capacity, he said, freeing it up to lend "as much as $50 billion of new financing" over the next decade.
Progress was also made on during debt roundtable discussion on Wednesday, Malpass said. For the first time, these talks included not only creditor countries but also the private sector, and representatives from Zambia, a country in advanced talks on restructuring its debt.
The Bank and IMF's leaders said progress had also been made to replenish lending facilities for low-income countries which have been depleted by the twin impact of the Covid-19 pandemic and the Russian invasion of Ukraine.
Georgieva and Malpass both warned Thursday that inflation remained too high in many countries around the world.
Governments also needed to work to reduce their budget deficits, and do more to improve sluggish growth prospects for the world economy in the medium term, she added.
Georgieva called on member states to push through the structural transformations needed to speed up digital transformation, improve the business environment in many countries, and accelerate the green energy transformation.
"We estimate $1 trillion a year is needed just for renewable energy and investment that can translate into growth and jobs," she said.
IMF Head Warns Against 'Second Cold War'
FILE: IMF Managing Director Kristalina Georgieva attends a session during the G20 Leaders' Summit, in Nusa Dua, Bali, Indonesia, November 16, 2022.
WASHINGTON - Countries must do more to avert the costly consequences of growing global trade fragmentation, and help avert a "second Cold War," the International Monetary Fund's (IMF) managing director, Kristalina Georgieva, said Thursday.