Transcript of the conversation between the Managing Director and Joseph Joyce, M. Margaret Ball Professor of International Relations, Department of Economics at Wellesley College, on A New Bretton Woods–Cooperation Towards a Resilient, Sustainable, and Inclusive World

IMF News, January 27, 2021

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Published: January 27, 2021

Overview

Event: Conversation at the Madeleine Korbel Albright Institute for Global Affairs.
Date: January 27, 2021.
Principal speakers: Kristalina Georgieva (Managing Director, IMF) and Professor Joe Joyce (M. Margaret Ball Professor of International Relations, Wellesley College).
Context: Discussion on whether a “new Bretton Woods” is needed and how global institutions like the IMF should evolve to address contemporary global challenges.

Institutional role, mandate, and evolution

Core assertions:
- Global institutions are needed because many problems are global or repeat across countries; institutions provide transmission lines for learning and policy coordination.
- Institutions must “lean towards the problems of tomorrow” rather than remain focused on yesterday’s problems.
- Mandates and governance must evolve with the changing world; governance change is among the toughest challenges due to tradition and risk of lowest‑common‑denominator outcomes.
Institutional strengths highlighted for the IMF:
- “Holding a hand on the pulse of the economy” at national, regional, and global levels.
- Crisis financing capacity and convening power.
- Capacity development programs focused on fiscal matters, data systems, and spending priorities.

Climate change — analytics, framework, and gaps

Conceptual framework for IMF engagement on climate (three pillars):
- Send the right signal for decarbonization (e.g., carbon pricing).
- Define public support for the shift to a new climate economy (infrastructure, skills).
- Promote a just transition for those negatively impacted.
Institutional actions and needs:
- IMF integrating climate into surveillance and policy advice on scale.
- IMF building capacity: “rapidly hiring climate economists” and creating skill‑upgrade programs for staff.
- Georgieva’s background: PhD on environmental policy and use of economic incentives for environmental change.
Strategic timing and opportunity:
- 2021 identified as a “key year” for climate transformation.
- Political context noted: “yesterday, President Biden took over” and his third signature was on rejoining the Paris Agreement; UK and Italy leading G‑20 and G‑7 and hosting COP26.

Inequality and distributional concerns

Positioning:
- Inequality is both an ethical/moral problem and an economic problem (it “reduces productivity, [and] impacts negatively growth”).
- IMF has advanced in talking about inequality and gender and is integrating these issues into policy advice.
Policy implications:
- Revamp tax policies toward more redistributive systems.
- Reshape public spending to build resilience in people (education, health, social protection), plants (climate‑resilient infrastructure), and financial systems.

Pandemic crisis response and assessment metrics

IMF pandemic financing and reach:
- “We have funded some $105 billion, since the beginning of the pandemic, benefitting 83 countries; 49 of these 83 countries are low‑income countries.”
Assessment metrics used by the IMF:
- Accuracy of analysis and policy advice.
- Adaptation of the surveillance function (example: stopping traditional bilateral surveillance early in the crisis).
- Policy Action Tracker used for cross‑country transmission of measures; “194 countries are covered by this Policy Action Tracker.”
- Questions for financial assistance: 1) Are funds provided where most needed? 2) Do funds reach those most in need (e.g., paying doctors and nurses, keeping clinics functioning)?
- Post‑pandemic audits agreed with most countries to ensure transparency in use of IMF funds.
Analogy: 2020 described as “the first half of the game”; 2021 characterized as “the second half,” expected to be more complicated and requiring continued calibration.

Structural transformations, sectoral winners/losers, and labor implications

Sectors likely to prosper:
- Digital and tech broadly (digital commerce, digital services, digital currencies).
- Automation‑based manufacturing.
- Some parts of food production and related services.
Sectors likely to contract or face long recovery:
- Contact‑dependent industries (restaurants, travel, conventional tourism).
Distributional impacts:
- “Low‑skilled workers, women, young people” are most severely impacted.
- Concern about a K‑shaped recovery leading to divergence across and within countries; risk of reversing decades of convergence between high‑income and low‑income countries.
Education and skills policy implications:
- Emphasis on lifelong learning and “learning to learn.”
- Greater need for vocational training and employer participation in skill enhancement.
- Liberal arts valued for adaptability and fostering learning skills.

Governance, representation, and legitimacy of the IMF

Representation progress and gaps:
- Emerging markets (including BRICS) have increased shareholding and now appear in top shareholder positions, but shares still do not mirror the world economy and low‑income countries remain underrepresented.
- IMF Board representation example: Africa has “only two chairs out of 24” at the IMF Board; at the World Bank Africa has “three chairs.”
Quota/shareholding process:
- Periodic quota reviews determine shareholding; the 15th review “didn’t deliver quite on the expectations”; the 16th review is forthcoming and emphasized as critical.
Leadership selection:
- Tradition has been “slightly bended in the right direction”; Georgieva notes her election as a European from an emerging market was cheered by emerging markets.
Gender representation:
- Increase in women in senior positions; directors raised from “25 percent” to “40‑plus percent”; first time a woman is leading the Fund’s management and the new chair of the IMFC is Minister Magdelena Andersson of Sweden.

New Bretton Woods moment — reconstruction vs. new institutions

Georgieva’s framing:
- The world faces a “new Bretton Woods moment” in need of reconstruction and transformation (health crisis, greener economies, digital inclusion, preventing divergence).
- She argues institutions like the IMF and World Bank have evolved and been essential in averting deeper economic depression during the pandemic.
Position on creating new institutions:
- Georgieva does not advocate creating entirely new institutions; she supports evolving existing institutions and enhancing cooperation among multiple institutions to meet current priorities.
Central priorities for institutions:
- Bring the health crisis to an end everywhere.
- Recover and transform economies for the future (green, digital, fair).
- Prevent divergence between rich and poor people and countries.

Key statistics and specific figures preserved exactly as stated

$105 billion funded since the beginning of the pandemic, benefiting 83 countries; 49 of these 83 are low‑income countries.
194 countries are covered by the Policy Action Tracker.
IMF Board example: Africa has only two chairs out of 24; World Bank: Africa has three chairs.
Periodicity and history references: 76 years' history; 44 representatives at Bretton Woods.
Global fiscal/monetary response referenced as “$20 trillion” put under the world economy.

Selected policy recommendations and action items (as articulated)

For the IMF and similar institutions:
- Do the right thing, not the easy thing; evolve mandates and governance to match changing global challenges.
- Integrate climate and inequality into surveillance and policy advice at scale.
- Build internal capacity (e.g., hire climate economists; staff skill upgrades).
- Use policy tools to create fiscal space for climate transitions and support a just transition for affected groups.
- Maintain and strengthen financial assistance targeted to the most vulnerable, with post‑pandemic audits for transparency.
- Push for quota/shareholding reform (16th review) to improve representation and legitimacy.
For governments and national policies:
- Recalibrate tax systems toward greater redistribution where appropriate.
- Reorient public spending to build resilience in people, infrastructure, and financial systems.
- Invest in lifelong learning, vocational training, and employer contributions to skill development.
- Use recovery spending to accelerate climate‑aligned investments that also generate jobs (reforestation, land restoration, climate‑resilient infrastructure).

Transcript of the conversation between the Managing Director and Joseph Joyce, M. Margaret Ball Professor of International Relations, Department of Economics at Wellesley College, on A New Bretton Woods–Cooperation Towards a Resilient, Sustainable, and Inclusive World (January 27, 2021).