{
  "title": "The IMF at 70: Making the Right Choices—Yesterday, Today, and Tomorrow (Christine Lagarde, October 10, 2014)",
  "publication": "IMF News, October 10, 2014",
  "sourceUrl": "https://www.imf.org/en/news/articles/2015/09/28/04/53/sp101014",
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  "summary": "Policy responses recommended: - Demand-side: - Continue accommodative monetary policy with attention to spillovers and spillbacks. - Fiscal policy “must be customized to country circumstances” and be “growth- and jobs-friendly”. - Supply-side: - Open service industry monopolies. - Boost infrastructu",
  "authors": [
    "Christine Lagarde Managing Director"
  ],
  "publishDate": "2014-10-10",
  "sections": [
    {
      "heading": "Overview and framing",
      "content": "- Occasion: IMF/World Bank Annual Meetings, Washington, D.C., October 10, 2014; speech delivered by Christine Lagarde, Managing Director, International Monetary Fund.\n- Central thesis: The world faces a pivotal \"fork in the road\" with three fundamental collective choices to be made: acceleration versus stagnation; stability versus fragility; solidarity versus seclusion.\n- Framing devices:\n  - Lewis Carroll quote: “That depends a good deal on where you want to get to.”\n  - Historical contrasts: the wrong turn ~100 years ago vs. the 1944 “multilateral moment” that created the IMF and World Bank.\n  - Final moral: “It is our choices, Harry, that show what we truly are, far more than our abilities”."
    },
    {
      "heading": "1. Acceleration or stagnation — growth, jobs, and inclusiveness",
      "content": "Findings and diagnostics:\n- Demographics: “In less than a decade, the over-65s will outnumber the under-5s—for the first time ever.”\n- Inequality: “7 out of 10 people in the world today live in countries where inequality has increased over the last three decades.”\n- Technology: Digital revolution “is not job-intensive” and could increase inequalities.\n- Climate and environment:\n  - “The 12 warmest years on record have occurred in the last 17 years.”\n  - “The incidence of weather-related disasters has increased threefold since the 1960s.”\n  - “By 2030, almost half of the world’s population will live in regions of high water stress or shortage.”\n- Growth prospects: “We expect growth of only 3.3 percent this year, and still under 4 percent next year.”\n- Unemployment: “200 million people around the world are looking for work today—if the unemployed formed their own country, it would be the fifth largest in the world.”\n- Regional challenges: youth unemployment chronic in southern Europe and North Africa.\n- Gender gap: “An estimated 865 million women around the world are being held back.”\n\nPolicy responses recommended:\n- Demand-side:\n  - Continue accommodative monetary policy with attention to spillovers and spillbacks.\n  - Fiscal policy “must be customized to country circumstances” and be “growth- and jobs-friendly”.\n- Supply-side:\n  - Open service industry monopolies.\n  - Boost infrastructure investment.\n  - Improve education, financial inclusion, and business environment, especially in emerging markets and low-income countries.\n  - Use fiscal instruments such as carbon pricing to promote efficiency and green choices.\n- Labor-market and social policies:\n  - Active labor market policies and youth training programs.\n  - Family-friendly policies (affordable child-care, flexible working arrangements) to increase female labor force participation.\n- IMF role: Provide country-specific advice to make growth more sustainable, job-rich, and inclusive."
    },
    {
      "heading": "2. Stability or fragility — financial risks and global safety nets",
      "content": "Findings and diagnostics:\n- Dual imbalance: “too little economic risk taking, and too much financial risk taking.”\n- Nonbank risks:\n  - “Mutual funds now account for 27 percent of global high-yield debt, twice as much as in 2007.”\n  - “The top ten global asset management firms now control a whopping $19 trillion.”\n  - This asset-management concentration “is larger than the world’s largest economy—the United States.”\n- Global financial integration:\n  - “The degree of financial integration has jumped tenfold since the IMF was founded.”\n  - “In the two decades before the crisis, international bank lending—as a share of world GDP—rose by 250 percent.”\n- Systemic risk: heightened likelihood and virulence of crises due to interconnectedness; history: “The bigger the boom, the bigger the bust.”\n\nPolicy responses recommended:\n- Complete and update financial sector reform agenda.\n- Overcome too-important-to-fail:\n  - Stronger cross-border resolution regimes for megabanks.\n  - Better rules and monitoring for nonbanks and shadow banking.\n  - Improved safety and transparency over derivatives.\n  - Strengthened macroprudential safeguards.\n- Cultural change: shift away from profit-over-prudence mentality toward ethics and service.\n- Global safety net:\n  - Regional arrangements have a role (e.g., BRICs contingency reserve arrangement).\n  - The IMF “must have adequate instruments and resources” as the only truly global institution focused on financial stability."
    },
    {
      "heading": "3. Solidarity or seclusion — multilateralism, cooperation, and global public goods",
      "content": "Findings and diagnostics:\n- Shift in global economic weight:\n  - “Fifty years ago, the emerging markets and developing economies accounted for about a quarter of world GDP. Today, it is half, and rising rapidly.”\n  - During the global crisis, emerging markets “contributed most to global growth.”\n- Rise of diverse stakeholders: NGOs, cities, citizen activists, aided by technology and social media — demanding updated modes of cooperation.\n- Tax and external imbalances:\n  - Tax competition “especially hurts low-income countries” and makes revenue mobilization harder.\n  - External imbalances demand shared responsibility: “behind every current account deficit lies a current account surplus.”\n\nPolicy responses recommended:\n- Renewed commitment to open trade and investment; reject “beggar-thy-neighbor” policies.\n- Three priority areas for international cooperation:\n  - Agreement on cross-border resolution of megabanks.\n  - Actions to reduce harmful tax competition and make tax shifting more difficult.\n  - Joint responsibility for correcting external imbalances.\n- Climate action: 2015 “is shaping up to be a make-or-break year”; global action required to protect poorest people, future generations, and the planet.\n- New multilateralism: update, adapt, and deepen cooperation while preserving the underlying philosophy of shared public goods.\n- IMF role: pivotal in supporting updated cooperation and being more representative of membership; completion of the 2010 governance reforms is “crucial.”"
    },
    {
      "heading": "Institutional performance, capacity, and staff",
      "content": "Key points:\n- Since 2008: IMF “have committed almost $700 billion to countries in need, provided training to all of our members, and technical assistance to 90 percent of them.”\n- Recent engagement: “fresh financial assistance to Ukraine, the Arab transition countries, and the African nations hit by Ebola.”\n- Tribute and organizational values:\n  - Praise for IMF staff and Executive Board dedication to international public service.\n  - Personal tribute to Wabel Abdallah, IMF resident representative in Afghanistan, who “was brutally killed by a terrorist attack in Kabul earlier this year,” and whose service the Fund honors."
    },
    {
      "heading": "Conclusions and exhortation",
      "content": "- Collective call to choose:\n  - “acceleration over stagnation, stability over fragility, solidarity over seclusion.”\n  - “Let us choose the path of 1944, not 1914.”\n- Final moral: choices define identity and destiny more than abilities.\n\nSpeech by Christine Lagarde, Managing Director, International Monetary Fund; October 10, 2014. The IMF at 70: Making the Right Choices—Yesterday, Today, and Tomorrow.\n\n---\n\n Content in this bundle\n\n- 101014apdf (PDF){rel=\"external\" type=\"application/pdf\"}\n- 101014cpdf (PDF){rel=\"external\" type=\"application/pdf\"}\n- 101014jpdf (PDF){rel=\"external\" type=\"application/pdf\"}\n- 101014rpdf (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\n References\n\n- Islamic Republic of Afghanistan and the IMF\n- United States and the IMF\n- Speeches\n- Christine Lagarde\n- PRESS CENTER\n- Webcast of the Speech\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2015/09/28/04/53/sp101014"
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    "Authors: Christine Lagarde Managing Director",
    "Published: October 10, 2014",
    "Occasion: IMF/World Bank Annual Meetings, Washington, D.C., October 10, 2014; speech delivered by Christine Lagarde, Managing Director, International Monetary Fund.",
    "Central thesis: The world faces a pivotal \"fork in the road\" with three fundamental collective choices to be made: acceleration versus stagnation; stability versus fragility; solidarity versus seclusion.",
    "Framing devices:",
    "Demographics: “In less than a decade, the over-65s will outnumber the under-5s—for the first time ever.”",
    "Inequality: “7 out of 10 people in the world today live in countries where inequality has increased over the last three decades.”",
    "Technology: Digital revolution “is not job-intensive” and could increase inequalities.",
    "Climate and environment:",
    "Growth prospects: “We expect growth of only 3.3 percent this year, and still under 4 percent next year.”",
    "Unemployment: “200 million people around the world are looking for work today—if the unemployed formed their own country, it would be the fifth largest in the world.”",
    "Regional challenges: youth unemployment chronic in southern Europe and North Africa.",
    "Gender gap: “An estimated 865 million women around the world are being held back.”",
    "Demand-side:",
    "Supply-side:",
    "Labor-market and social policies:",
    "IMF role: Provide country-specific advice to make growth more sustainable, job-rich, and inclusive.",
    "Dual imbalance: “too little economic risk taking, and too much financial risk taking.”",
    "Nonbank risks:",
    "Global financial integration:",
    "Systemic risk: heightened likelihood and virulence of crises due to interconnectedness; history: “The bigger the boom, the bigger the bust.”",
    "Complete and update financial sector reform agenda.",
    "Overcome too-important-to-fail:",
    "Cultural change: shift away from profit-over-prudence mentality toward ethics and service.",
    "Global safety net:",
    "Shift in global economic weight:",
    "Rise of diverse stakeholders: NGOs, cities, citizen activists, aided by technology and social media — demanding updated modes of cooperation.",
    "Tax and external imbalances:",
    "Renewed commitment to open trade and investment; reject “beggar-thy-neighbor” policies.",
    "Three priority areas for international cooperation:",
    "Climate action: 2015 “is shaping up to be a make-or-break year”; global action required to protect poorest people, future generations, and the planet.",
    "New multilateralism: update, adapt, and deepen cooperation while preserving the underlying philosophy of shared public goods.",
    "IMF role: pivotal in supporting updated cooperation and being more representative of membership; completion of the 2010 governance reforms is “crucial.”",
    "Since 2008: IMF “have committed almost $700 billion to countries in need, provided training to all of our members, and technical assistance to 90 percent of them.”",
    "Recent engagement: “fresh financial assistance to Ukraine, the Arab transition countries, and the African nations hit by Ebola.”",
    "Tribute and organizational values:",
    "Collective call to choose:",
    "Final moral: choices define identity and destiny more than abilities.",
    "[101014apdf (PDF)](/-/media/websites/imf/imported/external/arabic/np/speeches/2014/101014apdf.pdf){rel=\"external\" type=\"application/pdf\"}",
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