IMF Chief Economist Maurice Obstfeld ripped up the script Monday and delivered an impassioned plea to governments to continue to collaborate internationally.
An IMF chief economist typically uses the forward of the agency’s annual report on the health of the global economy to highlight key aspects of the report.
But, in his last forward before his retirement, Obstfeld penned an essay urging governments to continue to cooperate internationally and to take more steps to make sure benefits from this cooperation are broadly shared.
“Without more inclusive policies, multilateralism cannot survive. And without multilateralism, the world will be a poorer and more dangerous place,” Obstfeld said.
The IMF chief economist did not specify any countries in particular. Given the growing size of emerging and developing economies, the world’s richest economies sense that they are getting fewer benefits from multilateralism now than in the past.
“This change may tempt some to retreat into an imagined self-sufficiency,” Obstfeld said.
But cooperation is vital because the world’s economies are now so inter-linked, he said.
“Multilateralism must evolve so that every country views it to be in its self-interest, even in a multipolar world,” Obsteld said.
This won’t happen unless governments take steps to reduce inequality, he said.
The biggest challenge for many rich countries centers on the slow growth of workers’ incomes, perceptions of lower social mobility and inadequate government responses to structural economic change, he said.