Collaboration between nations is best approach for global trade, says IMF chief

Kristalina Georgieva praises Saudi Arabia’s ‘friendly’ approach on last day of World Economic Forum in Davos

IMF managing director Kristalina Georgieva predicts more regional co-operation on trade and economic activities. AFP

The world “cannot wipe out collaboration”, the head of the International Monetary Fund said on Friday, during a session in which she also praised Saudi Arabia’s “friendly” approach to trade.

Speaking at the World Economic Forum in Davos, Kristalina Georgieva said there had been a rise in protectionist measures in recent years, but evidence suggests countries which are “friends with everyone” perform best.

Faisal Alibrahim, Saudi Arabia’s Minister of Economy and Planning, told the forum that his country is comfortable being in the middle of the US and China amid their trade dispute.

Mr Alibrahim said: “I think we want to be in the middle. I think the kingdom's position is to have a strong partnership with all of its partners and friends, and that's a value proposition of the kingdom that we want to grow.”

Ms Georgieva, the IMF's managing director, said the data suggests that type of collaborative approach is ultimately more successful. “What we do is we look at the evidence, and here is what we find: it actually confirms that Saudi Arabia has the right strategy,” she said.

Countries have in recent years increasingly relied on protectionist measures, while gravitating towards politically aligned countries in trade, she said.

“But guess which category of countries is performing the best? The countries that are friends with everybody,” said Ms Georgieva. “In my view, what we are going to see over time is a reflection in trade and economic relations of a geopolitically changing world, more regional co-operation, more co-operation based on supply chains, more engagement that allows countries to achieve their objectives.”

Many thousands of years ago there were just a handful of people on the planet. Today there are eight billion, she said. “How did we get from there to here? Well, by collaborating and competing. And I think that there is no way we can wipe out collaboration from the future of humanity,” added Ms Georgieva.

Mr Alibrahim was also asked about Mr Trump’s recent comment that he plans to ask the kingdom's Crown Prince Mohammed bin Salman to “round out” a $600 billion investment pledge to $1 trillion in the next four years.

“There is a long-standing strong partnership between the US and the kingdom that has lasted so far eight decades. We've worked very well on important work, global work, with all administrations, no matter which administration is in office,” said Mr Alibrahim.

“This number represents investments, procurement, public and private sector, and it's just a mirror reflection of the strong relationship. What we'll spend in the economy from the start of Vision 2030 till 2030 is 12 times that number,” he added.

Vision 2030 aims to transform Saudi Arabia from a heavy reliance on oil and gas revenue to a technologically-advanced economy powered by renewable energy through a series of giga-projects involving trillions of dollars. Launched in 2016, the country is more than halfway through its implementation.

Mr Alibrahim also revealed that the country will host regular meetings of the World Economic Forum, starting next year. “We look forward to welcoming the global community again in Saudi Arabia in the spring of 2026,” he said.