World Leaders Prepare Concrete Proposals to Fight Crisis
The world is facing a twin crisis. The unfinished COVID-19 pandemic and geopolitical tensions are causing disruptions to supply chains. This makes the difficulty and scarcity of commodities very pronounced. Rising commodity prices pushed global inflation aggressively, so central banks reacted by raising their benchmark interest rates, tightening the liquidity.
Finance Minister Sri Mulyani Indrawati mentioned this in a meeting with top finance and economic diplomats from G20 countries in Bali. "The unresolved COVID-19 pandemic and the unfolding war in Ukraine are likely to exacerbate the already severe 2022 acute food security that we are all already seeing. In addition, she said that a looming fertilizer crisis can further exacerbate and extend the food crisis even in 2023 and beyond," she said.
IMF Managing Director Kristalina Georgieva agreed in the hybrid meeting of the G20 Finance Ministers and Central Bank Governors (FMCBG). "We need G20 leadership to address food insecurity and high debt risks," she said. The IMF sees three priorities to face the extraordinarily challenging environment:
- Countries must do everything in their power to bring inflation down.
- Fiscal policy must help central bank efforts to tame inflation.
- A fresh impetus for global cooperation will be critical to confronting the multiple crises the world is facing.