- IMF and WB decided in 2018 to host their annual meeting in Morocco, bringing the affair to the African continent for the first time in 50 years
MARRAKECH: Less than a two-hour drive from where families sleep in tents and earthquake rubble remain in piles, the world’s most powerful financial institutions are gathering for a week of discussions on economic challenges during times of war, inequality and climate change.
The International Monetary Fund and World Bank decided in 2018 to host their annual meeting in Marrakech, Morocco, bringing the affair to the African continent for the first time in 50 years.
Their original timeline was delayed by the pandemic, but the meeting beginning Monday arrives at an apropos time. After a devastating earthquake last month killed nearly 3,000 and wreaked $11.7 billion in damages, both officials and civil society groups are eagerly anticipating discussions about how to promote economic resiliency in light of natural disaster.
“In no other area is the need for international cooperation as evident as in addressing the existential threat of climate change. The world has a responsibility to stand with vulnerable countries as they deal with shocks they have not caused,” Kristalina Georgieva, the IMF’s managing director said in a speech on Thursday.
Often lenders of last resort, the IMF and the World Bank use billions in loans and assistance to buoy struggling economies and encourage countries operating in deficit to implement reforms they say promote stability and growth.
Still, they’ve been criticized for excluding the neediest nations from their governance and decision-making process, demanding painful spending cuts.
“It’s a time of multiple crises, particularly for Arab and African countries who’ve been hit by various exogenous shocks not of their making,” said Iskander Erzini Vernoit, the director of the Morocco-based Imal Initiative for Climate & Development. “’There’s this massive financing gap on the order of trillions for developing countries and also the key question of how affordable the financing can be.”
Those shocks include the pandemic and rising energy and food costs spurred by the war in Ukraine. Those challenges are particularly pronounced in Africa, where many countries spend more on debt than health care and education combined. Critics say the terms of many loans offered force governments from Egypt to Zambia to choose between paying debt or implementing unpopular spending cuts.
In the aftermath of the earthquake, the IMF approved a $1.3 billion loan to “help strengthen its preparedness and resilience against natural disasters” in Morocco — a longtime borrower who has used loans and credit to weather economic downturns, including most recently when the pandemic hit tourism and exports particularly hard. The institution has pushed Morocco to balance its budget and continue raising interest rates.
In mountain villages far from the city’s swanky hotels, midrise apartments and billboards advertising new construction, roads remain unpaved, water can be scarce and jobs hard to come by. The earthquake, residents say, exacerbated disparities plaguing rural areas and compounded struggles facing already-impoverished communities.
Signs of the country’s rapid economic development will be on display in Marrakech, where streets have been swept and damaged landmarks.
But laid-off miner Brahim Ait Brahim — who lives in Anerni, a mountain village near the quake’s epicenter — said he’s still waiting for emergency financial and housing assistance one month after his house was destroyed in the earthquake.
“That’s Marrakech. It’s the capital for tourism,” Ait Brahim said, describing it as the face of Morocco. “Here’s it’s hidden behind.”
Source: Arab News
