World Bank / IMF Annual Meetings - Agenda for a Resilient World: A Call for Structural Transformation

The global economy is defined by volatility. From mounting sovereign debt and fractured supply chains to the existential threat of climate change, the old models of growth are proving fragile. Incremental reform is no longer adequate; we require a complete structural overhaul. This necessitates a comprehensive,  agenda covering various aspects—a blueprint for transitioning from tactical crisis management to a state of robust, inclusive, and durable resilience.

I. Macroeconomic Stability and Fiscal Resilience

These actions aim to stabilize economies and ensure fiscal policy supports long-term growth and is resilient to future shocks.

Develop Fiscal Consolidation Pathways

The initial action involves the meticulous crafting and implementation of credible medium-term fiscal frameworks (MTFFs). This goes beyond mere annual budget cycles. An effective MTFF can clearly map out a multi-year trajectory to sustainably reduce the public debt-to-GDP ratio to safer levels. The credibility of this pathway hinges on transparency and the enforceability of fiscal rules (e.g., debt brakes or spending ceilings). Critically, this consolidation can be growth-friendly, meaning that while expenditure is curtailed and revenues are enhanced, essential productive investments in human capital (education, healthcare) and infrastructure (digital, green, physical) can be protected, or even prioritized, as they are the engines of future economic capacity. The rationale is to prevent a debt overhang from crowding out private investment and future budgetary space.

Enhance Public Financial Management (PFM)

Strengthening PFM is the process of ensuring that public funds are managed efficiently, effectively, and transparently, from collection to final expenditure. This involves three key areas: budget execution, ensuring budgeted funds are spent on time and for their intended purpose; improving public procurement processes to be competitive, transparent, and resilient to corruption, thereby achieving better value for money; and modernizing revenue collection systems through digitalization and better data analytics. The ultimate goal is to minimize leakage (losses due to corruption, mismanagement, or inefficiency) and significantly improve the efficiency of public spending, ensuring every unit of currency delivers the maximum possible social and economic return.

Modernize Monetary Policy Frameworks

Monetary policy can adapt to a world characterized by higher and more volatile global inflation and rapid technological change. Modernization requires central banks to clarify their mandates—whether it’s pure inflation targeting, or dual mandates including employment—and ensure their operational frameworks are robust. Crucially, they can significantly enhance communication with the public and markets to effectively anchor inflation expectations. This involves using forward guidance and transparent data dissemination to manage market perceptions. Furthermore, central banks can actively incorporate financial stability into their framework, using macroprudential tools (like loan-to-value ratios or counter-cyclical capital buffers) to manage systemic risks without solely relying on interest rates.

Stress Test Financial Systems

To ensure system-wide resilience, authorities can conduct rigorous and comprehensive stress tests that move beyond typical historical scenarios. These tests can cover all systemically important financial institutions (SIFIs), including banks, insurers, and critical non-bank financial intermediaries (e.g., shadow banking). The scenarios could be designed to test capital adequacy against a confluence of emerging risks: climate change risks (e.g., asset devaluation from transition risk or physical damage), sudden sharp increases in debt service costs, and significant geopolitical shocks (e.g., trade wars, supply chain fragmentation). The objective is not just to identify vulnerabilities but to mandate pre-emptive capital or liquidity buffers to absorb severe shocks and prevent taxpayer-funded bailouts.

Expand Access to Global Financial Safety Nets

This action calls for advocating for and implementing structural changes to make the global financial architecture more responsive, particularly for vulnerable developing nations. Specifically, this means streamlining and simplifying access to precautionary lending instruments from institutions like the International Monetary Fund (IMF). These instruments (e.g., the Precautionary and Liquidity Line) are designed to provide rapid, credible financial assurance before a full-blown crisis occurs, signalling market confidence and stabilizing capital flows. The emphasis can be on reducing stigma, making qualification criteria clearer, and ensuring adequate resources are available to prevent national crises from escalating into global systemic events.

Diversify Sovereign Funding Sources

Relying too heavily on external, dollar-denominated debt exposes nations to severe risks from exchange rate volatility and shifts in global monetary policy. Diversification is key. This involves a strategic focus on developing deep, liquid local currency bond markets to tap into domestic savings and reduce currency risk. Furthermore, countries could embrace innovative financing instruments like green bonds (to fund sustainable projects and attract ESG investors) and catastrophe bonds (to transfer disaster-related risks to capital markets, protecting public balance sheets from climate shocks). This strategy broadens the investor base, lowers overall borrowing costs, and enhances resilience to external shocks.

Reform Energy and Food Subsidies

Inefficient, blanket subsidies—particularly for fossil fuels—are fiscally draining, distortionary, and environmentally harmful, disproportionately benefiting the wealthy. The reform entails a strategic, phased phase-out of these general subsidies, which frees up substantial budgetary resources. This can be coupled with a transition to targeted social safety nets (e.g., direct cash transfers) to protect vulnerable populations from cost-of-living increases. The freed funds could be strategically re-invested in renewable energy infrastructure and R&D, accelerating the energy transition, lowering long-term energy costs, and promoting climate resilience.

Strengthen Tax Administration and Compliance

A solid fiscal foundation requires maximizing domestic revenue mobilization. This involves a two-pronged approach. Firstly, strengthening tax administration through the comprehensive use of digital tools (e.g., e-invoicing, predictive analytics) to simplify filing, improve audit selection, and reduce opportunities for corruption. Secondly, actively utilizing international cooperation (e.g., Automatic Exchange of Information) to combat sophisticated cross-border tax evasion and illicit financial flows. The objective is to broaden the domestic tax base in a manner that is perceived as fair and progressive, ensuring that all sectors and income levels contribute equitably.

Institutionalize Independent Fiscal Councils (IFCs)

To enhance the credibility and sustainability of fiscal policy, governments could establish or empower independent bodies—IFCs. These councils are distinct from political bodies and are mandated to provide non-partisan, expert assessments of government fiscal plans, budgets, and underlying economic forecasts. By offering objective analysis and challenging overly optimistic projections, IFCs help to anchor policy in realism, improve fiscal discipline, and increase public trust in the government’s commitment to long-term fiscal health. Their institutional strength could include public reporting rights and access to government data.

Address Global Debt Vulnerabilities

The growing number of low- and middle-income countries facing unsustainable debt requires decisive, coordinated international action. This involves actively supporting and expediting the implementation of the G20 Common Framework for debt treatments. This framework is designed to provide timely, orderly, and comprehensive debt restructuring for eligible countries that includes all bilateral and private creditors. The urgency lies in accelerating the process to prevent prolonged economic distress, ensure the debt sustainability of debtor nations, and restore their ability to invest in development. Failure to act quickly exacerbates humanitarian and economic crises.

II. Human Capital, Skills, and Social Protection: A Policy Framework for Adaptability and Resilience

This comprehensive framework aims to future-proof workforces by enhancing their adaptability, boosting productivity through targeted skills development, and establishing robust social safety nets that cover all workers, particularly those in precarious employment.

Implement Digital and Green Skills Training Programs

This initiative requires establishing mass-scale, modular, and highly flexible training and reskilling programs designed to address the immediate and future demands of the twin transitions: digitalization and decarbonization. The focus can be on practical, in-demand skills such as data analytics, cloud computing, cybersecurity, and artificial intelligence for the digital economy, and renewable energy installation, energy efficiency auditing, green construction, and carbon accounting for the green transition. Training could be modular (allowing workers to complete short, certifiable units), accessible (offered online and through community centers), and developed in close partnership with industry to ensure skills are job-market-relevant. Funding mechanisms could include individual learning accounts that workers can use flexibly throughout their careers.

Reform Education Curricula

Preparing students for a dynamic job market necessitates a fundamental shift in pedagogy beyond rote memorization. Education curricula, from primary through secondary levels, can be re-engineered to prioritize critical thinking, problem-solving, and adaptability. Digital literacy can be woven into every subject, teaching students not just how to use technology but how to understand, evaluate, and create with it. Crucially, socio-emotional skills (e.g., collaboration, resilience, communication) can be formally integrated, as these are uniquely human skills that complement technical expertise and become more valuable as automation increases. This reform requires significant investment in teacher training to equip educators with the skills to teach these new competencies.

Strengthen Active Labor Market Policies (ALMPs)

ALMPs are essential tools for matching supply and demand in the labour market and cushioning workers against economic shocks. This action requires a substantial increase in funding and effectiveness of these policies. Key components include modernizing job-matching services using AI and big data to connect job seekers with opportunities rapidly; expanding specialized career counselling that offers personalized guidance on career pathways and reskilling options; and significantly increasing the scale of subsidized apprenticeships and on-the-job training programs, with a particular focus on providing pathways for youth and marginalized groups who face the highest barriers to entry and long-term employment. These policies can be continuously evaluated for their return on investment.

Establish Universal Social Protection Floors

The rise of the informal and gig economy has created significant gaps in traditional employment-based social insurance. The goal is to roll out portable, employment-agnostic social insurance and assistance programs that create a foundational safety net for everyone. This includes establishing universal unemployment insurance schemes that cover short-term, contract, and platform workers; developing minimum income support for the most vulnerable; and ensuring pension portability so workers don't lose benefits when transitioning between different types of employment. Funding mechanisms can be designed to be simple and sustainable, potentially through mandatory, small contributions from all earned income sources.

Incentivize Formalization of Work

A large informal sector hinders economic growth and denies workers social protection. Governments can streamline business registration processes to eliminate bureaucratic hurdles and reduce the cost and complexity of compliance. A core strategy is to offer tiered or phased regulatory compliance and tax benefits—a graded approach—where micro- and small informal businesses receive lighter regulatory loads and incremental tax benefits as they transition into full formal status. This shifts the policy from a penalty-driven enforcement model to an incentive-driven pathway for formalization, thereby expanding the tax base and social protection coverage simultaneously.

Boost Female Labor Force Participation

Improving gender equality in the labour market is a massive driver of economic growth. This action requires strategic investment in social infrastructure. Crucial steps include building and subsidizing affordable, high-quality childcare and elderly care infrastructure, which directly addresses the primary barrier preventing women from entering or remaining in the workforce. Furthermore, strict enforcement of equal pay legislation, anti-discrimination laws, and transparency requirements regarding salary scales are necessary to ensure a level playing field and eliminate the gender pay gap.

Promote Health-Job Linkages

A healthy workforce is a productive workforce. This action involves funding comprehensive public health campaigns focused on prevention and early intervention for prevalent non-communicable diseases (NCDs) like hypertension and diabetes, which significantly reduce working years and productivity. Crucially, it includes expanding infrastructure for mental health services, making them accessible and destigmatized in and out of the workplace. Finally, enforcing and promoting safe and healthy workplace standards is necessary to reduce occupational injuries and stress, directly translating into improved worker well-being and productivity.

Develop a Global Skills Recognition Framework

In an increasingly globalized labour market, a lack of mutual recognition of professional and vocational qualifications hinders labour mobility and creates skills bottlenecks. Governments could collaborate with international bodies like the International Labour Organization (ILO), the Organisation for Economic Co-operation and Development (OECD), and regional bodies to standardize the assessment and recognition of digital and vocational skills across national borders. This framework would utilize digital credentials and blockchain technology to ensure that qualifications are portable, trusted, and easily verifiable, allowing skilled workers to move efficiently to where their talents are most needed.

Support Youth Entrepreneurship

Young entrepreneurs are a vital source of job creation. This initiative focuses on removing barriers and providing targeted support. Key actions include establishing dedicated mentorship programs that connect young founders with experienced business leaders, providing access to seed funding through grants or low-interest loans specifically for youth-led ventures, and creating simplified regulatory environments (e.g., "startup visas" or streamlined licensing) tailored for young founders. The goal is to foster a dynamic ecosystem that encourages the creation of innovative, job-creating Small and Medium-sized Enterprises (SMEs).

Invest in Digital Public Infrastructure (DPI)

Digital Public Infrastructure (DPI) forms the technological backbone for efficient social service delivery and economic inclusion. This involves building robust, open-source, and interoperable platforms across three layers:

Digital ID: A unique, secure, and verifiable identity system (like India's Aadhaar) for every resident.

Payment Systems: An immediate, low-cost, universal digital payment rail (like India's UPI).

Data Exchange: A consent-based system for secure data sharing (like a health data exchange). DPI is essential for the efficient delivery of social benefits (ensuring aid reaches the right people without leakage), facilitating remote learning and upskilling, and enabling universal access to financial services, ultimately lowering the cost of delivering every other human capital action listed.

 

III. Structural Reforms for Inclusive Growth: Driving Private Investment and Shared Prosperity

These actions focus on fundamentally improving the operational environment for businesses, fostering competitive markets, and ensuring that the resulting economic expansion translates into widespread benefits—a prerequisite for sustainable and inclusive development.

Simplify Business Regulations (The "Gag Rules" Reform)

This reform aims at regulatory detoxification, targeting the cumulative burden of unnecessary bureaucratic requirements, often referred to as "Gag Rules" because they silence or stifle entrepreneurial activity. The core action is a comprehensive regulatory guillotine—a systematic, government-wide review to eliminate or radically simplify outdated, overlapping, or redundant licenses, permits, and inspection requirements. This is crucial for unlocking the growth potential of Small and Medium-sized Enterprises (SMEs), which are disproportionately burdened by red tape, and for making the jurisdiction more attractive to Foreign Direct Investment (FDI). Implementation requires establishing a digital single window for business interactions and mandating a "sunset clause" for new regulations to prevent future regulatory bloat.

Invest in Core Economic Infrastructure

Public investment can be strategically prioritized to maximize economic returns and enhance national competitiveness. This involves focusing on resilient logistics networks (e.g., modern port facilities, integrated rail systems) that can withstand climate shocks and global supply chain disruptions. Equally critical is rural connectivity, ensuring that agricultural producers and remote industries are linked to national and international markets. The highest priority could be given to high-speed internet access (fiber optic and 5G), treating it as a public utility to enable digital commerce, remote work, and access to online education and health services, thereby narrowing the urban-rural economic divide. Investment can be managed through transparent, well-governed public-private partnerships.

Promote Competition and Anti-Monopoly Measures

Vibrant competition is the engine of innovation, lower prices, and better consumer choice. This requires substantially strengthening the operational independence and investigatory powers of national competition authorities. Key actions include actively preventing market concentration through robust merger control, especially in digital markets; vigorously pursuing cases of collusion and abuse of dominance; and addressing regulations that inadvertently create monopolistic conditions (e.g., exclusive licensing). The objective is to dismantle barriers to entry for new firms and ensure fair pricing across all sectors, from food production to telecommunications.

Enhance Property Rights and Rule of Law

A strong foundation for investment rests on the security of assets and the predictability of the legal environment. This necessitates deep structural reform of the land registry system—moving to digitized, centralized, and transparent records—to ensure clear, enforceable property rights. Parallel reform is needed for the judicial system to ensure the swift, non-corrupt resolution of commercial disputes, as prolonged litigation acts as a major deterrent to investment. Reforms could include specialized commercial courts and mandatory mediation/arbitration mechanisms to speed up dispute resolution and enhance contract enforcement credibility.

Support Global Value Chain Diversification

The concentration of global supply chains in a few locations poses systemic risks. Policy could be geared towards encouraging domestic firms to build capacity and integrate into more resilient and geographically diverse global supply chains. This includes providing targeted tax incentives (e.g., accelerated depreciation) for investments in resilient manufacturing technology and developing specialized industrial and logistical infrastructure (e.g., "smart ports," cross-border industrial zones) that can attract firms looking to diversify their sourcing and production outside of major hubs. The goal is to capture a larger share of value-added activities while simultaneously de-risking the national economy.

Implement 'One-Stop-Shop' Export Hubs

Inefficient trade procedures impose a "tax" on exports, undermining national competitiveness. The solution is to establish centralized digital "One-Stop-Shop" platforms that integrate all government agencies involved in export and import procedures (customs, port authorities, standards bureaus). This digital hub could allow firms to submit all required documents electronically just once, drastically reducing trade transaction costs, minimizing human interaction (and thus corruption), and cutting down the time required to move goods across borders. This institutionalizes trade facilitation in line with international best practices.

Targeted SME Financial Access

Despite their importance, SMEs often face significant hurdles in accessing affordable credit. Action can focus on addressing market failures in SME lending. This involves creating and capitalizing robust credit guarantee schemes that mitigate the risk for commercial banks lending to smaller firms. Crucially, it involves leveraging fintech and digital lending platforms to use alternative data (e.g., transaction history, utility payments) for credit scoring, thereby expanding the reach of affordable lending, particularly to underserved groups like women and minority-led enterprises that often lack traditional collateral.

Reform State-Owned Enterprises (SOEs)

Inefficient SOEs can drain fiscal resources and crowd out private investment. Comprehensive reform requires substantially improving the governance and transparency of SOEs, replacing politically appointed boards with independent, professional directors. SOEs can be subjected to market discipline where possible—by ensuring fair competition with private firms and removing explicit or implicit government guarantees. Where an SOE performs a clear public service mandate, its subsidies could be explicit, targeted, and budgeted for transparently; otherwise, the ultimate goal is to privatize or liquidate non-strategic SOEs to reduce the fiscal burden and enhance sector-wide efficiency.

Ensure Fair Tax Regimes for the Digital Economy

The outdated international tax system often fails to capture the value created by highly mobile, highly digitalized multinational corporations (MNCs). This action requires active participation in and adoption of global agreements, such as the OECD's Pillar Two, which establishes a global minimum corporate tax rate. The objective is to ensure that all MNCs, particularly those generating significant revenue from the digital sector, pay a fair share of tax where the value is created and economic activity occurs, not just where they book their profits, thereby levelling the playing field for domestic firms and protecting the domestic tax base.

Measure and Target Quality of Growth

Traditional reliance on Gross Domestic Product (GDP) as the sole metric of success can lead to policies that prioritize volume over equity and sustainability. This action involves a fundamental shift in policy focus towards a broader, more inclusive set of metrics. Governments can commit to measuring and targeting the quality of growth using indicators that incorporate: net job creation (especially high-quality, formal jobs), income equality (e.g., Gini coefficient, bottom 40% income growth), and environmental sustainability (e.g., carbon intensity of production, natural capital depletion). This framework guides policy decisions toward genuinely inclusive and resilient growth.

IV. Climate and Green Transition: Building Resilience and Sustainable Economies

Integrating climate action into economic policy to build environmental and economic resilience while creating new jobs.

The following actions represent a comprehensive strategy for integrating climate action into core economic policy, ensuring environmental sustainability becomes a driver of economic resilience, job creation, and technological innovation.

Develop National Just Transition Strategies

A "Just Transition" is the principle that the shift to a low-carbon economy can be managed to maximize social benefits and minimize hardships. This action demands the creation of detailed, comprehensive, and regionally-specific national strategies for managing the inevitable phase-out of fossil fuel industries (e.g., coal mining, oil and gas extraction). Key elements include mass-scale worker retraining and upskilling programs targeting green sector jobs (e.g., retrofitting, battery manufacturing, renewable energy maintenance); income support and early retirement options for older, affected workers; and economic diversification funds specifically for communities and regions historically dependent on these industries. The strategy can be developed through social dialogue involving workers, unions, businesses, and local governments to ensure political and social acceptance.

Establish Carbon Pricing Mechanisms

Carbon pricing is a crucial market-based tool to internalize the cost of pollution and incentivize emissions reduction. The action is to implement or significantly expand either carbon taxes (a direct fee on emissions) or cap-and-trade systems (where a limit is set on total emissions, and permits are traded). To ensure the policy is politically viable and economically fair, the revenue generated can be strategically utilized. A portion could be dedicated to funding large-scale green infrastructure projects (e.g., public transit, smart grids), while another portion could be returned directly to citizens via "carbon dividends" or rebates, particularly to low-income households, to offset potential increases in energy costs and prevent a regressive impact.

Accelerate Green Public Procurement

Government spending is a massive economic lever that can be used to steer markets toward sustainability. This action mandates that all levels of government (national, regional, and municipal) implement policies to prioritize and mandate the purchase of low-carbon, resource-efficient goods, services, and construction materials in their contracts. This creates a guaranteed initial market and "first buyer" advantage for sustainable innovations (e.g., green cement, electric fleet vehicles, circular economy products), thereby driving down costs through scale, stimulating private sector investment in sustainable R&D, and making sustainable options the market norm.

Climate-Proof Critical Infrastructure

The increasing frequency and intensity of extreme weather events pose an existential threat to economic functionality. This requires massive, strategic public investment in making essential infrastructure resilient to climate shocks. This includes hardening power grids against heat and storms, elevating and reinforcing roads and bridges against floods, and modernizing water systems to manage both droughts and deluges. This investment can be guided by forward-looking climate-risk mapping and, critically, serves the dual purpose of creating a new generation of high-skill construction, engineering, and climate-modelling jobs. It is a proactive resilience strategy that minimizes future economic damage.

Mandate Climate-Related Financial Disclosures

To effectively re-orient capital toward sustainable investment, the financial system needs transparent, standardized data. This action mandates that all major corporations, banks, asset managers, and other systemically important financial institutions are required to transparently report their climate-related financial risks and greenhouse gas emissions (Scopes 1, 2, and 3). This could follow global standards, such as those set by the International Sustainability Standards Board (ISSB) or the Task Force on Climate-related Financial Disclosures (TCFD). By quantifying and making these risks visible, the policy enables investors and regulators to accurately price risk and guide capital allocation toward sustainable, low-carbon economic activities.

V. Global Cooperation and Governance: Managing Shared Challenges

Thes following actions outline necessary international efforts to reform governance structures, ensure the provision of global public goods, and coordinate responses to external, cross-border economic and health shocks.

Strengthen Multilateral Trade Rules

The World Trade Organization (WTO) is vital for a predictable global economy but requires urgent reform to remain relevant. This action calls for constructive engagement among member states to resolve ongoing trade disputes through modernized mechanisms and to reform the core rulebook. Specific priorities include creating new rules for digital trade (e.g., data localization, cross-border data flows) and integrating sustainable practices (e.g., addressing climate-related trade measures). The overarching goal is to update the rules to reflect 21st-century commerce, resist the rising tide of protectionist pressures, and ensure the global trading system remains open, fair, and stable.

Coordinate Global Pandemic Preparedness

The next global biological threat is a question of "when," not "if." This action requires establishing a permanent, robust, and globally financed mechanism (potentially a Pandemic Fund or treaty) dedicated to rapidly deploying health and economic resources in response to future threats. This mechanism can integrate global surveillance, R&D funding for vaccines, and emergency supply chain management. It also mandates supply chain transparency for critical medical goods (e.g., PPE, active pharmaceutical ingredients) to prevent export bans and hoarding, ensuring equitable access to resources during a crisis.

Enhance Cross-Border Data Governance

The immense economic value of cross-border data flow is constrained by fragmented regulations and privacy concerns. This action is the commitment to develop international norms and agreements for responsible data flow and AI governance. The goal is to establish interoperable standards that facilitate global commerce and innovation (e.g., through mechanisms like trusted data flows) while simultaneously protecting individual privacy and human rights. This requires multilateral consensus on issues like data localization, data ownership, and the ethical use of artificial intelligence (AI) systems.

Scale Up Development Finance

Multilateral Development Banks (MDBs)—such as the World Bank and regional development banks—are essential for funding climate and development goals but are currently under-leveraged. The action is to ensure MDBs fully and urgently implement reforms to their capital adequacy frameworks. These reforms, often based on recommendations from independent reviews, aim to safely maximize their lending capacity by optimizing their balance sheets and risk models (e.g., using callable capital more effectively). This unlocks billions in new lending without requiring new taxpayer money, providing a significant boost to climate adaptation and mitigation projects in developing nations.

Establish a Global Financial Transaction Tax (GFAT)

To find dedicated, scalable funding for global public goods, the feasibility of a small, globally coordinated tax on financial transactions (GFAT) can be rigorously explored. A miniscule tax on high-volume financial trades (e.g., currency, derivatives) could generate a massive, stable, and relatively non-distortive revenue stream. The revenue would be earmarked for crucial global public goods that suffer from chronic underfunding, such as climate adaptation, technology transfer, pandemic readiness and response, and humanitarian relief. Success depends on achieving a critical mass of internationally coordinated adoption to prevent capital flight.

The agenda is more than a wish list; it is an integrated survival plan. By tackling stability, human capital, market structure, climate, and global governance in concert, we can build an economic system that is not only robust enough to withstand the next shock but is inherently more equitable and sustainable for all.