Finding a Path to the Higher Plain of Inclusive Growth
IMF News, May 16, 2019
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Bibliographic details
- Authors: Christine Lagarde Astana Economic Forum
- Published: May 16, 2019
Introduction and context
- Occasion: Opening Remarks at Astana Economic Forum — Nur-Sultan, Kazakhstan.
- Speaker: Christine Lagarde.
- Date: May 16, 2019.
- Theme: Elevating living standards and achieving inclusive, sustainable growth across Kazakhstan and the Caucasus and Central Asia (CCA).
The outlook: global and regional
- Global context:
- "Two years ago, 75 percent of the global economy experienced an upswing."
- "This year, we expect 70 percent to experience a slowdown in growth."1
- Loss of momentum in the second half of 2018 reflected trade tensions and tightening financial conditions.
- Expectation: "over the next six months, we expect the global economy to rebound."
- Regional growth:
- "Throughout the Caucasus and Central Asia (CCA), growth has picked up since 2014 and is now expected to remain at 4.1 percent this year and in 2020."
- Assessment: 4.1 percent is "well below the long-term potential for the region" and too low to raise living standards to levels of other emerging economies in Europe and Asia.
- Implication: The region must "elevate growth to a higher plain" through careful and confident steps, domestic policy reform, diversification, and stronger international cooperation.
Path to inclusive growth — principles and priorities
- Key principles (no "one-size-fits-all" solution):
- Fiscal policy:
- Should "balance debt concerns with critical initiatives in health, education, and infrastructure."
- IMF support through technical assistance and capacity development programs.
- Anti-corruption:
- "Corruption needs to be addressed head-on in the region."
- 2019 characterized as "an opportune moment to provide increased transparency and foster more trust between citizens and the government."
- Empowering under-represented groups:
- "Women and other under-represented groups can be empowered by continuing to eliminate legal and economic barriers."
- Kazakhstan female labor force participation: 65%2 — "the highest in the region and a benchmark for every country in Central Asia."
- Financial sector inclusion and fintech:
- "Just 45 percent of adults in CCA countries have a banking account — almost 20 percent lower than the average in other emerging markets."
- "Only 3 percent of citizens have mobile money accounts3."
- Conclusion: These figures indicate "an incredible untapped resource" that can support diversification away from oil and gas and be "environmentally sustainable."
- Opportunity: If Central Asia harnesses fintech as other emerging economies have done, "the potential gains for the poor, women, and young people are significant."4
- Regional connectivity:
- In 2018, "in Central Asia, less than 10 percent of trade was conducted between countries in the region."
- Comparative benchmark: "In the European Union, the number is over 60 percent."
- Recent developments: surge of trade on the Kazakhstan-Uzbekistan border; new roads, railways, and electricity grids coming online; announcement of a "Silk Visa" plan to ease travel between Central Asian nations.
- These initiatives can rebuild Silk Road connections and support diversification, sustainability, and inclusion.
Conclusion and call to action
- Inclusive growth is attainable for Kazakhstan and the region.
- Cultural inspiration: "Kazakh hearts are like the steppes—wide, kind, and generous."
- Final message: Embracing that spirit can "generate economic growth, raise living standards, and provide new chances for millions" — achieving "a higher plain."
Speech by Christine Lagarde — Opening Remarks, Astana Economic Forum — May 16, 2019.