Skip to content

World bankers meet against backdrop of global inflation and recession threats

With leadership under fire and a community facing an historic convergence of crises, finance ministers and central bankers met at the World Bank and IMF.

The secured entrance to IMF meetings in Washington
The secured entrance to IMF meetings in Washington (AN/J. Heilprin)

WASHINGTON (AN) — With leadership under fire and an international community facing an historic convergence of crises, finance ministers and central bankers gathered here for the meetings of the World Bank and the International Monetary Fund.

The IMF set a sobering tone for the meetings early in the week with its World Economic Outlook report, warning policymakers of a severe global recession if they make mistakes in the fight against inflation.

“In short,” said the IMF report, “the worst is yet to come, and for many people 2023 will feel like a recession.”

Here in the United States, the head of JPMorgan Chase, Jamie Dimon, said in a televised interview that the U.S. would likely be “in some kind of recession six to nine months from now.”

U.S. President Joe Biden told CNN that he doesn’t expect a U.S. recession, but conceded the possibility. “If it is, it will be a very slight recession,” he said.

Along with the twin threats of inflation and recession, the world’s financial elite find themselves dealing with soaring interest rates, supply-chain problems, energy shortages, food insecurity, a strong U.S. dollar and Russian President Vladimir Putin’s increasingly desperate and brutal invasion of Ukraine.

As financial leaders grapple with these issues, the World Bank and its staff are being led by a man who has lost the confidence of many over his comments about the role of fossil fuels in climate change and global warming.

Need to understand climate

At a public forum last month sponsored by The New York Times, World Bank President David Malpass — who was appointed to the post by former President Donald Trump — repeatedly refused to acknowledge the accepted scientific knowledge that greenhouse gases created by the burning of fossil fuels are making the Earth hotter.

He later tried to backpedal and said he was not a climate denier, but the damage was done.

“It’s simple. If you don’t understand the threat of climate change to developing countries you cannot lead the world’s top international development institution,” said Christiana Figures, a diplomat from Costa Rica who helped negotiate the Paris Agreement on climate change.

The Big Shift Global, a coalition of NGOs aimed at bringing transparency to global energy investments, found in a new report that the World Bank has funneled some US$15 billion directly to fossil fuel projects since the 2015 Paris treaty was adopted.

The world is growing so hot so fast that in less that 80 years parts of Africa and Asia will be uninhabitable for the hundreds of millions of people who live there, the United Nations and Red Cross said this week.