UAE hosting Cop28 is chance to 'zero in' on climate action, IMF chief says

Kristalina Georgieva says it is important the climate summit is being held in a country focused on move to clean, sustainable energy

Kristalina Georgieva, managing director of the International Monetary Fund, says the UAE can be a leader in the energy transition.

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The managing director of the International Monetary Fund, Kristalina Georgieva, has stressed the significance of holding Cop28 in the UAE, seeing it as an "opportunity to zero in on what has been an elusive target" — meeting climate targets.

In an exclusive interview with The National on the margins of the World Government Summit in Dubai, Ms Georgieva stressed that “time is not our friend, we are way behind actions that the world needs to take to reduce the risks for our future”.

“I see the opportunity of Cop28 to zero in on what has been an elusive target”, including the need for climate finance for emerging markets and developing economies, she said.

Ms Georgieva said the UAE was ideally placed for the meeting. “By the virtue of being an energy producer that has taken seriously the task of diversifying away from fossil fuels and creating more renewables as an opportunity, the Emirates is in a position to demonstrate what can be done and to lead in that [energy] transition,” she said.

Ms Georgieva also stressed the need for actions on the “big tasks for the world — mitigation, adaptation and transition”.

It was important “that the Cop would be in a country that has taken to heart that goal of transition to clean, sustainable energy without jeopardising the objective of everyone having access to energy as a source of economic development”, she said.

She also highlighted the importance of having an inclusive summit, with all sectors represented. "We need all hands on deck, we need everybody … it is very important to concentrate on what needs to be done, and actions that will get us there," she said.

She advised all parties to pay “attention to what matters the most fighting: the climate crisis".

Touching on the general picture in the region, Ms Georgieva explained the “Middle East is following the pattern of the world economy, meaning that growth is slowing down and inflation is still a problem to be dealt with”.

However, the picture is mixed because “it is a very diverse region”, she said.

“The Gulf countries are doing quite well and inflation is much less of a problem to a certain degree because their currencies are pegged to the dollar, so the appreciation of the dollar doesn't affect them the same way it affects other countries," Ms Georgieva said.

She referenced countries, without naming them, “that have very high levels of debt ... servicing debt when interest rates are up is particularly difficult”.

However, despite the economic outlook “what we are encouraging countries in the region to do is pursue reforms, so you strengthen your competitiveness and your attractiveness for investment”, she said.

Mr Georgieva said lessons from the era of the pandemic should be heeded. “What we learnt from Covid-19 is that countries with strong fundamentals, sound fiscal policies, strong economies based on private sector-led growth, withstood the economic shock, the same way as people with strong immune systems withstood the virus. So the message to everybody is to continue on the course of reforms.”

Tunisia

Tunisia is one of the countries that needs to expedite reforms. Ms Georgieva said the "collaboration with the authorities in Tunisia has produced a very sound staff-level agreement”.

She expects her team to go to the board with a programme for Tunisia “quite soon”.

"We have had a number of actions that Tunisia needs to take, so we can go to board, some of these actions proved to be more difficult, and it has taken a longer time for the authorities to implement them,” she said.

“They also need to bring the population on board on these difficult actions, but they're necessary. And we also had to make sure that the financial support for our programme from the friends of Tunisia, including the Gulf countries, is secured.

"I am very pleased to say that we have made very good progress ... I expect that we will be able to go to our board with the programme quite soon."

Egypt

One country for which Ms Georgieva sounded optimistic, despite difficult economic circumstances, was Egypt. While speaking at the summit in Dubai, Egyptian President Abdel Fattah El Sisi said reforms and improvements were being implemented.

Ms Georgieva said she shared Mr El Sisi’s "optimistic view because, indeed, Egypt has been firm in implementing the actions we have agreed on at the start of our programme”.

“They are not easy actions to take," she said.

One issue that has been discussed at length with the Egyptian authorities is more privatisation. “I'm also very optimistic to see Egypt making decisive steps towards the state stepping back from the economy and allowing private sector to do more,” Ms Georgieva said.

"There are a number of privatisations that are being scheduled, and I am very encouraged by the expectation that we will have many of those privatisations implemented in the next months, by the end of this financial year, which is June."

That means the IMF expects “there will be a sufficient inflow of foreign exchange, as a result of these privatisations”, she said.

One of the key challenges facing Egypt is job creation. Ms Georgieva said that, ultimately, the private sector must be the driver for those jobs.

“The country has to create a million jobs every year, because of its youthful growing population," she said.

"The state cannot create that many jobs even remotely. So the state has to create conditions for the private sector to do what the private sector is best at — employment creation."

Lebanon

There was, unfortunately, less optimism for Lebanon, which is going through its worst economic crisis.

Ms Georgieva said the authorities in Lebanon needed "to set aside what divides them and unite to help their people”.

Showing her frustration at the situation, she said: “We reached a staff-level agreement in April last year. It will soon be a year since we have agreed on what needs to be done. But the doing has proven elusive."

She expressed her "greatest sympathy" to the Lebanese people. "They deserve to be given a chance for the economy to rebalance. And it is a matter of political will,” she said.

Her message to Lebanon’s leadership was clear: “Muster the will, get the job done."

Deadly earthquake

On another note, Ms Georgieva expressed her condolences to the people of Turkey and Syria for the “tremendous tragedy” of the earthquakes last week.

“Right now, the most important mobilisation is this of humanitarian support. And I want to pay tribute to the humanitarian workers, to those in civil protection that are saving lives and helping people cope with the impact of it,” she said.

As for the IMF, she said it was looking at the “macroeconomic implications of this disaster”.

“Down the road, I am hopeful to see that reconstruction brings benefits to the countries, especially in the case of Turkey,” she said.

"Turkey has the experience from the past, when they turned a disaster into a mobilisation for reconstruction, and growth,” she said, in reference to a deadly earthquake that struck the country in 1999.

Ms Georgieva said she was “very, very keen to see my colleagues at the World Bank already doing a needs assessment … so it can underpin reconstruction efforts, as soon as possible”.

"In the case of Syria, of course, there are issues related to how the country can get access to support and financing.

"But right now, I would set this to the side. The focus has to be on making sure that everybody in need, can get support as quickly as possible."