Bangkok Economic Festival2026, in review

The ultimate measure of successful debt restructuring is not simply how much debt is reduced or rescheduled. It's whether countries emerge with the capacity to invest, grow, create jobs, and finance their development sustainably.

China's role in the multilateral system is not just about China. It is also about the multilateral system.

As we speak, we are preparing our budget for 2027, and we are allocating 30% of our budget servicing the debt. And this moved from 24% last year. So increasingly, we are allocating more to the debt service than health, agriculture, and education combined.

A supervisory organization can be extremely busy and still fail to focus sufficiently on the risks that matter the most.

The first is the paradox that as what is happening around us in terms of geopolitics is growing conflict, the multilateral development institutions are working together better than ever.

Giving protection is easy, but taking away is very difficult. The issue is not only picking the winner, but is it politically feasible to let the loser go?

The low trust equilibrium is everybody does just the minimum amount needed to get to the stabilization phase. And that's a perfectly rational response in a low trust model.

Fears that China's involvement would create a parallel multilateral system, that's largely not really materialized. China's continued to contribute even at its lower pace, and it's portrayed itself as a reformer from within.

A sustained shift toward net repayment at this difficult time should be a conscious policy choice for the IMF members rather than simply emerging from the existing settings, a little bit by default.

There are better uses for money than buying government bonds if you can invest into the AI boom. And governments need to wake up to that reality.

ODA declined by 23% last year, the largest annual decline in the history of development assistance. The five largest donors all cut lending simultaneously for the first time on record.

The model that takes the country to middle income status is not the model that will take it to advanced country.

We need to address these debt vulnerabilities as early as possible without delaying the adjustment. Because Sri Lanka announced the debt standstill at the very last moment because we were almost running out of our external buffers and the market access was really restricted.

Suppose that there's breakthrough of the shareholding tonight. I don't think there will be much fundamental change of Chinese representation. So there's other informal voice, the governance reform. I think that's actually more important. Like the people, the leadership especially.

The LIC DSF manages risk, but it doesn't weigh returns, because the question the DSF asks is how much a country can borrow. It doesn't ask about what this debt is financing. It's not asking whether this debt is worth it.

We should also recognize that so far it's been a fair weather asset class, so the credit cycle has only gone up while private credit has been growing. So we don't know how it will behave if the cycle were to turn.

As with many areas of international cooperation, the G20 does not need another framework. It needs to finish the job it started and to ensure that existing commitments produce tangible results.

Policymakers in Asia doesn't lack knowledge or economic ideas of how to move forward. The key constraint is in the political economy constraint. Successful factor-driven growth creates powerful beneficiaries in business, in government, and in bureaucracy, which want to maintain the status quo.

Debt crises come in the context of a broader crisis in general, right? So the focus on stabilization is just right because you have to go fast, you have to stabilize the economy because otherwise you will never have a recovery.

In terms of setting up its own institutions, there is value to doing so. But there is also a risk to fragmentation for setting up separate trust funds and vehicles.

What perhaps the system fails to recognize is that we've moved from the old model of episodic shocks to a new norm of continuous global shocks, and that requires a rethinking of the design of what we have currently.

Over half of the decisions made by central bankers now is driven by shocks outside the control of their domestic economies and their domestic policymakers.

I never liked the word de-risking, because it looks like you're disappearing with the risk. It's re-assuming the risk. And it's good that we assume the risk, because that mobilizes more.

The convergence and the distribution went very well for the middle and top side of the population. The bottom didn't converge that much. And that explains maybe some of the more populist narrative that developed at a certain point of the transition.

What's important for you to remember is that the debt reduction path is only as solid as the growth assumption. But when we look at the main pillars for this growth, we don't see in the programs strong pillars or strong reasons for this growth to happen.

The MDB could recognize more future contributions to incentivize the emerging donors like China to contribute more, because the current formula still protect the past contributions.

The other lenders and providers of funding are pulling back. So this is not the moment for the IMF to choose to be in one of its rare periods when it also is pulling money out of these countries.

I think it's easy to get sucked into a debate about trade-offs, but I think I agree very much that it's only a trade-off if you are credible. If you're not credible, you can have adverse developments in inflation and adverse developments in output.

It cannot be that we end up with negative financial flows from these countries, which are detracting from the capacity of local governments to invest in health and education and having stable society.

One lesson from the EU single market integration is that goods market integration is a convergence engine and services market integration is a divergence engine.

You stabilize on your flow indicators, but the stock remains a little bit stagnant. So it's through debt for development and other such swaps where you can now start to eat away at that stock.

Mr. Deng Xiaoping received the leadership of the World Bank and very famously said that, we need more your knowledge rather than your money. So we value your advice more than your money.

There's enough money in Africa. It's how you mobilize it. Our pension funds, our central banks, they all are sitting on tons of money, our insurance company.

My fundamental belief is that we cannot privatize the benefits of monetary innovation while leaving the public sector with an undefined obligation to absorb the consequences when things go wrong.

Exacerbating this is China's transition from lender to debt collector. Chinese Belt and Road lending to developing countries peaked in 2016 at about $50 billion a year. And since then, new lending since about 2023 has only been about $7 billion a year.

One of the challenges that I've come across, including by talking to a lot of innovators in Asia, is that they started thinking about the challenges in Asia, but they ended up realizing that the money to be made was solving the problems in high-income countries.

We can get the math right on paper, while leaving the countries without enough room to invest and grow. A country can exit default while its people are still living through the crisis. And this is a fact. That cannot be our definition of success.

Within the UN system, which was based on a 1992 agreement, China doesn't count as a country that should be providing climate finance, unlike countries which at that point had reached a certain income level.

Based on studies of IFC equity investments in infrastructure projects in Africa, what they found is that the returns were six times S&P 500. So I don't think that the growth of the region really captured the level of the returns of these investments.

Emerging market local currency bonds have been less volatile than advanced market bonds in the last three years already, it's not three months, three years of having less volatility than advanced markets.

They look at us and say, okay, I need more resources to do a project, and I need three or four of the multilaterals. But, oh, my God, one process is a lot. Two is bearable. Three, I just forget about it.

If you look at per capita of the population, Slovakia is the biggest car producer in the world. It's not China, it's not Germany, it's Slovakia. So it's actually around 12% of GDP and around half of the exports.

One of the most interesting announcements from China came fairly recently at the WTO, where China said we'll no longer be trying to access preferential agreement. So even though it's not saying we're not a developing country, it's saying, well, we're in a different category.

China had a real estate correction that should have led to a full-blown crisis anywhere else. The size of the correction and the duration, and we're still in it.

Sometimes we will actually find areas where it's not possible to measure and yet it exists. Sometimes the invisible is the most powerful.

The advantage of Thailand is being a trusted connector. We trade with both, we have good relationship with both, and then we built from that: you don't trust each other, but you can trust us. We don't steal your secret.

Everyone in China wants to rebalance, but they want to rebalance without a cost, and I think that's what's impossible.

The size of China's surplus, the size of the imbalance is such that in the interest of comity, in the interest of constructive trading relations with the world, China should increase the value of its currency.

I still see it as very much a production phase of AI. I'm still talking about AI building a supply base in terms of data centers, powers, and networks. And the adoption is still in its early days, and it will likely to come in waves.

Dollar stablecoins are likely to reinforce the international dominance of the US dollar. But at the same time, very importantly, it also does not necessarily make the dollar-based financial system more resilient.

Last year I said tech trumps tariffs, this year I've said tech trumps oil, also said tech trumps temper tantrums too, because tech is first order and everything else is second order.

We have argued that for us the external imbalance is sort of the flip side of the domestic imbalance. And that's first and foremost what needs to be addressed.