secretstalks
“Gita Gopinath, the IMF’s first deputy managing director, is in India and discussed various topics with TOI, including the global crisis, AI, and the need for job creation. Here are some excerpts:
How do you see wars and crises affecting the world and India?
In recent years, there’s been a significant increase in geopolitical uncertainty due to events like the Russian invasion of Ukraine and conflicts in the Middle East (West Asia).
More generally, nations have reconsidered what the proper terms of engagement should be in light of the pandemic and the conflict. It is not only motivated by efficiency; resilience and worries about national security also play a role. In terms of global integration, this is a totally different world than the one we have been living in for the past three decades.
“In the short term, the energy crisis caused by the war and food insecurity have led to a much higher cost of living in many countries. If these conflicts continue, we might see further increases, like a rise in oil prices, which could negatively impact many countries, including India. Another factor is the uncertainty that comes with it. We’re in an election year, which brings a lot of uncertainty regarding policies, and that can make investors hesitant.”
Trade fragmentation is a major concern. In 2022 and 2023, around 3,000 new trade restrictions were implemented. We’re seeing many countries introduce industrial policies that include trade-restricting measures. Countries that are close geopolitically are maintaining stronger trade ties, while those that are distant are facing challenges. We’re still in the early stages of geo-economic fragmentation, and if this continues, the risks could become much more severe, where no one benefits.
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