IMF chief warns of growing divisions in the world and economic fragmentation

The world is in danger of becoming more economically fragmented, warns board member Paul Hilbers of the International Monetary Fund (IMF). According to him, conflicts and tensions have been more frequent in recent decades. However, there has always been a tendency towards further globalization and cooperation. Now "the pendulum is in danger of swinging the other way," says the Dutchman, exactly 80 years after the 'birth' of the IMF.

The growing division is visible in the rising trade tensions between, for example, the US and China. This year, many countries will also have elections. There seems to be a rise of radical right and nationalism, as mentioned by many experts. For instance, Marine Le Pen's party seems to be the big winner in the French parliamentary elections this weekend.

Hilbers does not want to comment on specific political developments. "We have to be careful not to equate the opposition between left and right in politics with whether or not it is for or against international cooperation," he indicates. He does acknowledge that, in some cases, "it is not going in the right direction."

"So there is more for us to do," he adds. Hilbers recalls that globalization has brought "enormous prosperity." "We will, therefore, do our best to keep trade and the financial system open, to bring countries together and keep them together. That is a task of the IMF."

The IMF was founded 80 years ago during the famous Bretton Woods conference in July 1944. While World War II was still in full swing, many countries came together to discuss the situation after the war. They decided that the IMF should provide financial stability. The World Bank became responsible for fighting poverty.

According to Hilbers, the goals of the two organizations are still the same. And still relevant, he adds. "Especially now that climate change and the rise of AI are also presenting new challenges."

The Netherlands has just had a new Cabinet. Hilbers cannot yet say what this means for the Dutch course with regard to the IMF. He must discuss this with the new Minister of Finance, Eelco Heinen, who is responsible for the IMF, along with the president of De Nederlandsche Bank (DNB).

"But I represent sixteen countries in the IMF, for example Belgium and Ukraine," says Hilbers. "So it is not the case that one country can dictate to me what to do. I always have to weigh interests."