Kristalina Georgieva, Managing Director, International
Monetary Fund (IMF) has made a statement following the publication of a Joint
International Financial Institution (IFI) Plan to Address Food Insecurity.
Russia’s invasion of Ukraine has precipitated serious
economic and social consequences around the globe. Among them, many countries
are now facing dangerous food shortages and sharply higher prices for food,
energy, and fertilizers.
These pressures occur at a time when countries’ public
finances are already stretched from the pandemic and public debt burdens are
high. With inflation reaching the highest levels seen in decades, vulnerable households
in low- and middle-income countries are most at risk of acute food insecurity.
And history has shown that hunger often triggers social unrest and violence.
If we have learned one lesson from the 2007-08 food crisis,
it is that the international community needs to take fast and well-coordinated
actions to effectively tackle a food crisis, by maintaining open trade,
supporting vulnerable households, ensuring sufficient agricultural supply, and
addressing financing pressures. I am honored to have been able to work together
with the heads of other International Financial Institutions to propose
concrete actions. Coordination between us will be critical for the plan to have
maximum impact in quickly alleviating food insecurity, especially for the most
vulnerable households in the most vulnerable countries.
Working closely with the World Bank and other International
Financial Institutions, the IMF will provide policy advice, capacity
development assistance, and financial support to catalyze and complement financing
from other institutions. The IMF is investing in its monitoring capacity to
allow for timely identification of countries with the most pronounced financing
pressures, especially fragile and conflict-affected states, which will
particularly be affected by food insecurity.
The IMF is working with country authorities on
macroeconomic frameworks and policy priorities. A critical area of focus is to
assist countries in their efforts to rapidly improve social safety nets to
protect vulnerable households from the imminent threat of hunger. Helping
members identify ways to safeguard food security without resorting to export
restrictions has been another priority. These policy objectives are reflected
in the IMF’s program engagement. IMF financial support for Moldova (recently
augmented to help address the harmful effects of the war) and Mozambique,
for instance, includes a focus on strengthening social safety nets for
vulnerable households.
The IMF will also bring to bear its new Resilience and
Sustainability Trust, which will provide affordable longer-term financing for
countries facing structural challenges, while countries with acute financing
needs could access IMF emergency financing, where appropriate. The IMF is
intensifying efforts with the World Bank and others to support debt
restructurings where needed.”
Background: Following a meeting of International
Financial Institutions (IFIs) and global leaders convened by the US Treasury on
April 19, 2022, “ Tackling Food Insecurity: the challenges and call to
action,” the International Monetary Fund (IMF), the African Development Bank
(AfDB), Asian Development Bank (ADB), European Bank for Reconstruction and
Development (EBRD), Inter-American Development Bank (IDB), the World Bank, and
the International Fund for Agricultural Development (IFAD) have worked together
to formulate a joint action plan to address food insecurity.
According to the plan, the IFIs will pursue actions to step
up, surge, and scale their work across six priority goals: 1) support
vulnerable people; 2) promote open trade; 3) mitigate fertilizer shortages; 4)
support food production now; 5) invest in climate-resilient agriculture for the
future; and 6) coordinate for maximum impact.
