China’s Global Development Initiative can revert IMF’s 2023 grimy global outlook

by Admin (Posted on October 18, 2022October 18, 2022)

By Marvin Hannington Kalema.

 On Tuesday this week, the International Monetary Fund (IMF) released its 2023 global growth forecast in which it painted a grimy picture stressing that the world’s three largest economies will “continue to stall”, and warned “the worst is yet to come, and for many people 2023 will feel like a recession.”

Stressing that conditions could worsen significantly next year with more than a third of the world’s economy contrasting, IMF cut its 2023 global growth forecast to 2.7 percent, which is lower than the Fund’s 2.9 percent July 2022 forecast.

Further, the forecast reduced US’ growth this year to 1.6 percent which is a 0.7 percentage point downgrade if compared with the Fund’s July forecast. This drop can be attributed to an unexpected second-quarter GDP contraction in the US. For the year 2023, IMF predicted that US’ growth forecast will be 1%.

China, the world’s second largest economy on the other side is predicted to register to register a 4.4% growth in 2023, down from 4.6%.

Sky rocketing energy prices in Eurozone growth will further affect economic growth in the region with IMF predicting a 0.5% growth in 2023 which will leave the region’s key economies like Germany and Italy entering what IMF called “technical recessions.”

The IMF further argued that a promising economic future, is subject to a delicate balancing act by central banks to fight inflation without over-tightening, which could push the global economy into an “unnecessarily severe recession” and cause disruptions to financial markets and pain for developing countries.

All the above, if critically analysed, it is increasingly becoming clear that achieving United Nations 2030 Agenda for Sustainable Development will be very difficult especially for developing countries.

As Chinese president Xi Jinping observed in his remarks to during the 76^th session of the UN General Assembly address, “right now, COVID-19 is still raging in the world, and profound changes are taking place in human society. The world has entered a period of new turbulence and transformation. It falls on each and every responsible statesman to answer the questions of our times and make a historical choice with confidence, courage and a sense of mission.”

Arguably, the questions of our times now must answer how can the world recover from this economic meltdown without leaving any country behind? What should be done to achieve the 2030 UN Agenda for Sustainable Development?

While UN’s 2030 Agenda calls for global sustainable development, the current reality calls for more ingredients for it to achieve its main objectives.

Therefore, recalling urgent need for a better and functioning world amidst economic uncertainties as highlighted by IMF in their 2023 global outlook forecasts, embracing China’s proposed Global Development Initiative (GDI) is very important at this time since it addresses all key challenges that have potential of failing a balanced economic recovery for all countries while putting people at the centre.

Indeed, while proposing GDI, president Xi explained the “need[s] to foster global development partnerships that are more equal and balanced, forge greater synergy among multilateral development cooperation processes, and speed up the implementation of the UN 2030 Agenda for Sustainable Development.” He reasoned those challenges like global economic meltdown, and food and energy insecurity are likely to hinder the achievement of the UN’s 2030 Agenda for Sustainable Development due to economic recoveries countries are taking.

Specifically, Xi explained that different countries have resorted to individualistic economic recoveries, leaving poor and developing countries’ concerns unattended, which risks widening the south – north development gap. “We must get a good grasp of the overarching development trend in the world, firm up confidence, and act in unison and with great motivation to promote global development and foster a development paradigm featuring benefits for all, balance, coordination, inclusiveness, win-win cooperation and common prosperity,” stressed Xi.

With IMF’s warning that “a promising economic future, is subject to a delicate balancing act by central banks to fight inflation without over-tightening, which could push the global economy into an unnecessarily severe recession” which the Funder explained would “cause disruptions to financial markets and pain for developing countries,” to squarely counter this challenge, there is need central banks and governments across to work together in identifying viable and practical policies and suggestions for all.

With GDI for example, President Xi emphasized that it is a sure way for the world to a chieve a balanced development if countries agree to work together in promoting economic recovery, “For us to break through the mist and embrace a bright future, the biggest strength comes from cooperation and the most effective way is through solidarity…The hardships and challenges are yet another reminder that humanity is a community with a shared future where all people rise and fall together…” Xi noted as he introduced GDI.

In total support of Xi Jinping’s call for inclusive rather than individualistic development, one ought to note that even the preamble of the UN 2030 Agenda for Sustainable Development highlights development ‘partnerships’ as one of the agenda’s five most critical areas of importance. Simply put, the agenda notes that formation of such partnerships is not only a foundational principle for all the SDGs, it is also the only viable way by which such SDGs can be effectively. This re-echoes Jinping’s assertion that SDG targets, of which global economic sustainability includes, cannot be achieved in isolation.

China’s Global Development Initiative is an example of development campaigns tailored in resonance with the UN’s SDGs hence the IMF ought to consider its promotion and sensitization in its bid to avert the impending global economic crisis. The GDI, significantly anchored on collective efforts of development manifests SDG 17 that was specifically and intentionally adopted to promote development partnerships.

This goal according to scholars like Haywood & Funke (The Sustainable Development Goals in South Africa: investigating the need for multi-stakeholder partnerships), is premised on the assertion that a successful sustainable development agenda requires partnerships between governments, the private sector and civil society. This is the exact message being pushed by Beijing’s GDI project and in light of growing selfish and individualistic development approaches that often affect the global south more adversely, all global development stake-holders must consider it.

“We need to jointly build international consensus on promoting development. It is important that we put development in front and center on the international agenda, deliver on the 2030 Agenda for Sustainable Development, and build political consensus to ensure everyone values development and all countries pursue cooperation together,” added Xi.

The IMF 2023 global outlook predicts that for next year, most of developing countries people will feel like a real recession. This means that though major economies will not be much better, there is need for them not to abscond from their commitments of helping developing countries development and economic recoveries programs. Indeed, as he promoted GDI, Xi emphasized the need for developed countries to fulfill their obligations and deepen cooperation stressing that in development efforts, “no country or individual … behind.”

Today, the GDI has been cited and supported by the United Nations and other international organizations, and nearly 100 countries. Now that it seeks to address challenges IMF has pointed at, one can argue that it’s high time IMF adopted GDI as the world races to arrest global economic meltdown and build a community of common prosperity and shared prosperity.

Marvin Hannington Kalema is a Senior Research Fellow at the Development Watch Centre and a law student at University of Johannesburg, South Africa.

 

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