Lagarde Urges Action to Deliver on G20’s Hangzhou Commitments

IMF News, September 5, 2016

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Canonical URL: Lagarde Urges Action to Deliver on G20’s Hangzhou Commitments

Statement by Ms. Christine Lagarde, Managing Director of the International Monetary Fund (IMF), issued at the conclusion of the Group of 20 (G20) Summit in Hangzhou, China.
Date: September 5, 2016.
Key framing: "We met against the backdrop of a global landscape characterized by major economic and technological shifts, and by growth that has been too low for too long--and which has benefitted too few."
Endorses the Hangzhou Action Plan as a vehicle for "a set of forceful policy actions."

Core recommendation: "A first priority is a coordinated effort to raise growth."
Policy mix: "making full use of all policy levers--monetary, fiscal, and structural--individually and collectively."
Country-level focus: identify and prioritize "reforms that provide the biggest growth impulse for each country" (area where the IMF is actively engaged).
Trade policy: "Pushing back against protectionism and pushing forward with free and fair trade is a vital component of this growth agenda."

Core recommendation: "A second priority is a commitment that growth must be more widely shared."
Targeted measures: deploy "proven tools to reduce excessive inequality and raise economic prospects, particularly for low-income groups and workers affected by rapid technological change."
Examples of tools: "skills training and investments in education and health."
Overall goal: "increased growth, but it must be better balanced, more sustainable, and inclusive so as to benefit all people."

Support for strengthening the global financial safety net, with "an adequately financed IMF at its center and equipped with a more effective toolkit."
Greater cooperation called for between the IMF and regional financing arrangements, "such as the Chiang Mai Initiative."
On IMF financing: G20 leaders supported "maintaining access to bilateral and multilateral borrowing arrangements, in line with the objective of preserving the IMF’s current lending capacity."
Encouragement for broad IMF membership participation in financing, "including through new agreements," with some countries already indicating willingness to make commitments.

Governance milestone: G20 "welcomed the entry-into-effect of the IMF's 14th review of quota reforms--which represent a major step toward reflecting the increasing role of dynamic emerging market countries in the Fund's governance."
Forward-looking: work "towards completion of the 15th review by the 2017 Annual Meetings."
SDR inclusion: G20 "welcomed the inclusion of the Renminbi into the SDR (Special Drawing Right) currency basket as of October 1st."
Broader SDR exploration: G20 "supported the ongoing exploration of broader use of the SDR."

Lagarde: "I would like to warmly congratulate President Xi and the Chinese authorities on their leadership of the G20 this year and their excellent organization of the Leaders Summit meeting in the beautiful city of Hangzhou."
The IMF looks forward to working closely with "the German Presidency of the G20 in 2017."

Source: IMF press release, September 5, 2016.