Managing Director Kristalina Georgieva’s Remarks at the 2020 Paris Peace Forum

IMF News, November 12, 2020

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Occasion: Paris Peace Forum 2020; remarks delivered as the year "of the worst pandemic in a century" and "the worst recession since the Great Depression."
Emphasis on collective action: "being in this together" as the determinant of 2021 outcomes.
Noted cooperative signals from 2020: synchronized government and central bank responses, vaccine research momentum, and the IMF gaining a new member, Andorra, becoming the 190th member of the Fund.

Fiscal and monetary response in 2020:
- "$12 trillion in fiscal action and massive liquidity support from central banks."
Financial system resilience: post-Global Financial Crisis reforms left the banking system "more resilient" and contributed to financial stability "even in the midst of this severe crisis."
Technology and vaccines: "incredible momentum in vaccine research" and the digital economy benefiting from the crisis.

First: Strong public investment push
- Rationale: lift up growth when there is "ample idle capacity and interest rates are very low."
- Objectives: address the climate crisis, promote digitalization, and create a "more equitable world."
- Coordination benefit: "If G20 countries move together, invest together at the same time rather than in an unsynchronized manner, we estimate that they could spend a third less to achieve the same outcome than if they acted alone."
- Outcome focus: build impetus for growth and jobs more effectively by working together.

Second: Support for the developing world
- Priorities: ensure liquidity and investment in developing countries to avoid deepening inequality and to prevent losses in the fight against poverty.
- IMF commitment: "vouch for the IMF’s commitment to be part of this boost to high-quality, green public investment."
- Role of SDRs: "make the best use of the SDRs so we can help the developing world make progress."

Third: Intergenerational responsibility and fiscal sustainability
- Avoid passing "unsustainable debt" to future generations.
- Priorities: high-quality public investment that supports fiscal sustainability, early debt treatment where restructuring is needed, and improving tax systems to be "fit for the 21st century."
- Taxation challenge: concern that the digital economy benefits from the crisis while there is no agreement on "fair and global taxation of these activities" to share benefits and burdens.

Two possible 2021 trajectories:
- A year that becomes "yet another ‘Tale of Two Cities’—more inequality within countries, across countries, across generations."
- A year in which "we come together to build a more prosperous, more equitable, more sustainable world."

Overall judgment: the magnitude of the challenge is great, but cooperative spirit witnessed at the meeting is strong; anticipation of celebrating collective action at next year's Paris Peace Forum.
Closing words: "Merci, Monsieur le Président."

Managing Director Kristalina Georgieva’s Remarks at the 2020 Paris Peace Forum, November 12, 2020.