The District of Columbia is set to once again be the backdrop for the Annual Meetings of the board of Governors of the World Bank Group (WBG) and the International Monetary Fund (IMF), which kicks off Thursday. Many leaders have commented this year’s series of meetings are more Important than recent years; citing Brexit, natural disasters, and changes in global banking regulations. It's also the first annual fall meeting since the 2016 presidential election when Donald Trump was elected.
What to expect
Everyone attending is wondering what IMF managing director Christine Lagarde will say.
It is very likely she’ll speak on the coordinated recovery that’s thriving in over half of the G20 countries. Countries like the UK are experiencing growth, with only a few signs of strain (light to moderate inflation). Practically any country in this financial sweet spot understands its only temporary.
Eventually, higher interest rates will be coming which slows growth. No one really wants to hear it, but its part of the cycle. Definitely, expect her to talk about financial inequality; not every country is on the same footing, which is why entities like the World Bank, IMF, and other global giants exist. The good news is that income inequality has decreased in recent times in most developed countries, but the wealth isn’t evenly distributed.
Some theories claim the IMF can fix much of the inequality issue, but it’s believed banks will lose revenue, and in a profit-driven world, that might be hard to swallow. Of course, Brexit will be covered. The next round of negotiations have already begun, but many don’t see much coming out of these particular talks.
Lastly, it's expected that Lagarde and others will give comments on who President Trump should consider as the next US Federal Reserve chair.
The meetings have nothing to do with the overall fed chair selection, but it’s widely believed the meetings can offer insight on what direction the US should consider.
Who’s attending
G20 finance ministers and central bank governors make up a majority of the upcoming attendees. Many of them are already in the District having outside meetings leading up to the historic event.
The finance ministers and central bank governors make up 80 percent of global output. One of the positive components of the meetings is that G20 ministers are at the same table with large emerging nations and established developed ones.
Arun Jaitley, the Indian Finance Minister, is expected to attending some of the meetings. He’ll be highlighting changes India’s implementing to make doing business there easier. The Goods and Services Tax is the biggest change. The Indian government is using public spending to spur economic growth. Mukili Chikuba, Zambian Minister of Finance and Permanent Secretary, will also be in attendance. He supports the $150 million (US) the World Bank has set aside for Zambia’s agriculture budget for the next three years.
In addition, the IMF has promised a $1.3 billion (US) balance of payment. Stephen Dhieu, South Sudanese Finance and Planning Minister, leads a delegation as well.
Doing away with the old
Several IMF officials are looking at these meetings as especially important because of the things that Lagarde may speak about. With Brexit being real, nations have to figure out how to walk this delicate tightrope of building a life without England in the European Union (EU). They don’t want to see the same thing happen that took place when the IMF attempted to assist in Greece’s recovery under former IMF managing director, Dominique Strauss-Kahn. An overwhelming majority in the global finance world believe IMF’s involvement only made the situation worse.
What they really will be talking about
While nothing is expected to come out the current round of Brexit negotiations, many of those people meeting in DC will be talking about what all this means for Europe without the UK. Some nations believe it will bring leaders together, but others think it still gives reasons for uncertainty. Several African nations are very interested in what this means as they borrow money from the World Bank and IMF (also a couple of the nations are part of the commonwealth of England). Europe doesn’t want its relationship with England to be on par with Russia, but at the same time, Europe has to make money now that England’s economy is leaving. The simple solution is a big Brexit bill to England, but again, England wouldn’t want that obviously.
