‘Think of the unthinkable’: IMF chief warns world is a very different place after crises like Covid

The Managing Director of the IMF warned that we need to “think of the unthinkable,” as we live in “a more shock-prone world” impacted by the Covid-19 pandemic, Russia’s invasion of Ukraine and the recent earthquake across Syria and Turkey.

“We all have to change our mindset to be much more agile and much more oriented towards building resilience at all levels, so we can handle the shocks better,” Kristalina Georgieva said Tuesday, during a World Government Summit panel hosted by CNBC’s Hadley Gamble.

“What we are very concerned [about] is the unexpected,” Georgieva said.

The IMF chief signaled the need for resilience in our planet, in societies that must allow equal opportunities, and in people, who must benefit from education, health and good social protection.

“We are not where we should be in being good stewards of our planet for our children,” Georgieva added.

In a previous interview with CNBC, Georgieva said that more private investments were needed to help developing countries meet their climate change goals, which cannot be sufficiently covered by public aid and local government funding.

Ukrainians are “fighting for the right of every nation to exist”

On the topic of Russia’s invasion of Ukraine, Georgieva said the world lost “a very precious peace dividend,” prompting nations to spend more on defence and less on domestic concerns, such as healthcare and infrastructure.

“We cannot take peace for granted anymore,” she said.

Georgieva praised the international response to the war as “quite remarkable” and stressed the global implications of the conflict:

“Everyone got some sense of sympathy for a problem that today is Ukraine’s problem, but tomorrow can be a problem for many other countries – that you can be invaded by your stronger neighbor,” Georgieva said. 

“In Ukraine, people strongly believe they are fighting not just for themselves, they are fighting for the right of every nation to exist and run its own affairs,” she added.

Georgieva said that the IMF has to play a “stabilizing role” in the war in Ukraine, and that the country needs between $40 billion and $48 billion to function this year.

The IMF chief previously described the invasion of Ukraine as the “single most important negative factor” for the economy in 2022.

The global economy is set to grow 2.9% this year, according to forecasts by the financial agency.