The prospect of rising interest rates in the U.S., China’s slowdown, and persistently low commodity prices all posed risks to global growth, but they can be surmounted with the right policies, strong leadership and global co-operation, she stressed.
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During a panel on the global economy prior to the World Bank Group-IMF annual meetings scheduled for October 9-11, Lagarde was repeatedly challenged by CNN worldwide business correspondent, Richard Quest, as to the impact of the IMF’s policies and recommendations during her term, which began on July 2011 and runs out in mid-2016.
Managing Director Christine Lagarde speaks during an event hosted by the Council of the Americas in Washington, on September 30, 2015.
Twenty of the countries most vulnerable to climate change held the inaugural meeting of the “V20”, a counterpoint to the G20 that will exert pressure for more climate financing and manage the funds. “Countries need to look at best practices around and upgrade their policies to reinvigorate growth”, she said.
Chinese policy makers are committed to moving to a more market-determined exchange rate as part of the country’s economic reforms, Lagarde said. Countries like India should focus on addressing energy infrastructure, and education, labour and product market reforms.
“I have served, done my best and am prepared to serve, but it’s not my call”.
Just as Peruvian cuisine has become a global success story by refining and updating traditional recipes, Lagarde said, global policymakers, too, needed to do the same. This is absolutely the prime objective.
His comments came after a stark message from former US Treasury Secretary Larry Summers, who has long warned of the risks of “secular stagnation”, or permanent damage to growth. It is necessary for the institution to represent the balance of power between the different members of the institution.
In Monday’s joint announcement, trade ministers from Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the USA and Vietnam said the agreement “will support jobs, drive sustainable growth, foster inclusive development and promote innovation across the Asia-Pacific region”. A larger, politically awoken middle class has far less tolerance for corruption these days, particularly as the deteriorating economy threatens to sabotage their newly attained standard of living, and they have access to new technologies that facilitate the spread of information and lower the costs of political coordination. “We can’t get into a beggar-thy-neighbor kind of economic policy making”, he said.
The IMF is an worldwide financial organization of 188 countries, working to foster global monetary cooperation.
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It is also crucial for ensuring sufficient permanent resources to effectively meet members’ needs and support the stability of the worldwide monetary and financial system.
