Arab News | IMF preparing El Nino assistance, ‘concerned about food security’: chief to AFP

SINGAPORE: The International Monetary Fund is preparing to offer support to countries exposed to the effects of El Nino, the organization’s director Kristalina Georgieva told AFP on Wednesday, expressing concern about food security.

El Nino is a natural phenomenon recurring every two to seven years owing to the warming of sea surfaces, bringing worldwide changes in winds, pressure and rainfall patterns.

Global forecasters predict this year’s event will peak at an intensity never observed in the modern era, compounding the effects of man-made climate change which drives extreme weather patterns.

Central American countries are already grappling with drought, while Asian nations are experiencing severe disruptions to monsoon rains, resulting in damage to crops in both regions.

“We are very concerned about the El Nino that is hitting this year,” Georgieva said in an interview in Singapore. “We are concerned about food security. We are concerned about pressure on inflation coming from that door, from the door of food becoming more and more expensive.”

“And the advice we give to countries is to be very careful of how they deploy their very limited fiscal capacity,” she said, adding that some countries may be forced “to rely on external financing.”

“We are also getting ready, should this become a hit on vulnerable countries, to come to support them because one of our roles as an institution is to offer cushion in the case of exogenous shocks.”

Georgieva noted the “risk of dual exogenous shocks” — El Nino and rising energy prices as a result of the US-Iran war.

While some countries may be able to absorb these shocks, “we have Pacific island countries, more vulnerable countries like Bangladesh, poorer countries like Laos — they are in a much tougher place,” she said, calling for a “coordinated” global response.