{
  "title": "Annual Meetings Speech: The Road Ahead—A Changing Global Economy, A Changing IMF",
  "publication": "IMF News, October 12, 2012",
  "sourceUrl": "https://www.imf.org/en/news/articles/2015/09/28/04/53/sp101212a",
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  "summary": "Speaker: Christine Lagarde, Managing Director, International Monetary Fund.",
  "authors": [
    "Christine Lagarde Managing Director"
  ],
  "publishDate": "2012-10-12",
  "sections": [
    {
      "heading": "Introduction — the World Comes to Japan",
      "content": "- Speaker: Christine Lagarde, Managing Director, International Monetary Fund.\n- Occasion: Annual Meetings, Tokyo, Friday, October 12, 2012. As prepared for delivery.\n- Opening themes: gratitude to Japanese hosts and recognition of Sendai recovery; emphasis on collective action and cooperation."
    },
    {
      "heading": "A. World in Flux — Big Sweeping Changes",
      "content": "- Long-term improvements in living standards:\n  - real GDP per capita: nearly 3½ times higher for the world, 4 times higher for Japan, 9½ times higher for emerging Asia.\n  - world trade volumes are 16 times higher.\n  - half a billion people in Asia have pulled themselves out of poverty over the past few decades.\n- Megatrends reshaping the global economy:\n  - Demographics: vast youth cohorts in rising regions; graying populations in advanced and major emerging economies; increasing female economic participation.\n  - Projection: By 2035, Africa will have the world’s largest labor force of more than a billion people—more than India or China.\n  - Projection: By 2035, there will also be more than a billion people aged over 65 in the world.\n  - Economic power shifts: Emerging markets and developing economies now account for half of world GDP, up from a quarter in 1964.\n  - Technology and connectivity: nearly 3 billion people are connected to the internet.\n- Regional notes:\n  - Asia: strength and dynamism evident.\n  - Brazil: example of inclusive growth focus under President Dilma Rousseff.\n  - Europe: undergoing deep integration; Eurozone severely tested; need for deeper banking and fiscal integration plus structural reforms.\n  - Middle East: transformation with difficult road ahead; potential for Arab transformation with commitment and external support.\n  - Sub-Saharan Africa: growing strongly; rise of “frontier markets”; Nigeria cited as a reform success story.\n- Overarching caution: global recovery remains too weak; unemployment and inequality persist; optimism must be translated into action."
    },
    {
      "heading": "B. Navigating the Road Ahead — Three Milestones",
      "content": "- Three milestones to manage change:\n  - Putting the crisis behind us.\n  - Completing reform of the financial sector.\n  - Addressing inequality and building inclusive growth.\n\n- Putting the crisis behind us — policy package:\n  - accommodative monetary policy;\n  - the right pace of fiscal adjustment with solid and realistic plans to bring debt down over the medium term;\n  - finishing the banking sector clean-up;\n  - structural reforms to boost productivity and growth;\n  - rebalancing global demand toward dynamic emerging markets.\n- Fiscal constraint concern:\n  - public debt now averages almost 110 percent of GDP for the advanced economies—the highest level since World War II.\n  - reducing public debt is difficult without growth; high debt hinders growth and policy flexibility.\n- A better financial system — priorities:\n  - complete the agenda of financial sector reform: better regulation, better supervision, better resolution of cross-border entities, sensible incentives, level playing field.\n  - progress noted on Basel III for capital and liquidity buffers, but momentum at risk.\n  - outstanding areas: derivatives, shadow banking, too-important-to-fail institutions.\n  - IMF findings: better regulation nudges bank lending rates up, but by relatively little; increasing capital buffers to appropriate levels helps growth; reforming financial sector taxation can reduce excessive risk-taking and leverage.\n  - mobilizing savings: emerging Asia accounts for about a third of world savings; developing local financial markets can redirect savings to domestic investment.\n- Inequality and inclusive growth — policy implications:\n  - Recent IMF research: less inequality is associated with greater macroeconomic stability and more sustainable growth.\n  - Policy directions: balance efficiency with equity in fiscal policy; fairness in burden-sharing; protection for the weak and vulnerable; better financial inclusion; better transparency and governance."
    },
    {
      "heading": "C. The Future IMF — Serving our Members in the New World",
      "content": "- Overarching principle: need for greater cooperation; multilateral institutions are more important in an interconnected world.\n- IMF’s evolving role: new approaches, new tools, renewed relevance grounded in mandate.\n- IMF as trusted adviser:\n  - recent judgment calls: recapitalize European banks; larger European financial firewall; more balanced approach to fiscal adjustment; urgent attention to the fiscal cliff.\n  - increased focus on economic and policy spillovers.\n  - new instruments and initiatives:\n    - Integrated Surveillance Decision to cross-fertilize country-level and global surveillance.\n    - External Sector Report to sharpen multilateral assessments, including exchange rates.\n    - Financial Surveillance Strategy to strengthen focus on financial sector stability.\n- IMF resources and lending activity (crisis period metrics):\n  - committed $540 billion and disbursed $157 billion in 126 lending programs—57 non-concessional, 69 concessional.\n  - membership decision earlier this year to boost resources by $456 billion, bringing total lending power to over $1 trillion.\n  - windfall profits from gold sales used to top up the Poverty Reduction and Growth Trust for concessional lending.\n- Governance and global ownership:\n  - 2010 reforms: 6 percent in quotas will shift to the dynamic emerging and developing countries, or 9 percent in total since the start of the previous 2006 reform.\n  - For the first time, Brazil, China, India, and Russia will be among the top ten shareholders.\n  - For the first time at any international financial institution, an all-elected Executive Board will be established.\n  - Progress toward reform completion: over 75 percent of consents for the quota increase; more than 120 countries for Board reform.\n  - Remaining requirement: secure 85 percent of voting power to complete the Board reform and the 2010 package.\n  - Call to membership to finalize reforms."
    },
    {
      "heading": "Conclusion — The Spirit of Tokyo: Cooperation",
      "content": "- Tribute to Japan: champion of multilateralism and global cooperation; celebrating 60 years of partnership with the IMF.\n- Appreciation for IMF staff and Executive Directors for commitment and guidance.\n- Human story and metaphor: essay by Nao Yonemoto recounting the proverb “give salt to your opponent” — be generous to those in need; helping each other in difficult times is the only way forward.\n- Final message: the spirit of cooperation is essential; encourage delegates to carry it home.\n\nSource: Annual Meetings Speech: The Road Ahead—A Changing Global Economy, A Changing IMF, by Christine Lagarde; Tokyo, Friday, October 12, 2012. As prepared for delivery.\n\n---\n\n Content in this bundle\n\n- 101212aapdf (PDF){rel=\"external\" type=\"application/pdf\"}\n- 101212acpdf (PDF){rel=\"external\" type=\"application/pdf\"}\n- 101212ajpdf (PDF){rel=\"external\" type=\"application/pdf\"}\n- 101212arpdf (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\n References\n\n- People's Republic of China and the IMF\n- India and the IMF\n- Japan and the IMF\n- Brazil and the IMF\n- IMF Policy Advice -- A Factsheet\n- Speeches\n- PRESS CENTER\n- Webcast\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2015/09/28/04/53/sp101212a"
    }
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    "Authors: Christine Lagarde Managing Director",
    "Published: October 12, 2012",
    "Speaker: Christine Lagarde, Managing Director, International Monetary Fund.",
    "Occasion: Annual Meetings, Tokyo, Friday, October 12, 2012. As prepared for delivery.",
    "Opening themes: gratitude to Japanese hosts and recognition of Sendai recovery; emphasis on collective action and cooperation.",
    "Long-term improvements in living standards:",
    "Megatrends reshaping the global economy:",
    "Regional notes:",
    "Overarching caution: global recovery remains too weak; unemployment and inequality persist; optimism must be translated into action.",
    "Three milestones to manage change:",
    "Putting the crisis behind us — policy package:",
    "Fiscal constraint concern:",
    "A better financial system — priorities:",
    "Inequality and inclusive growth — policy implications:",
    "Overarching principle: need for greater cooperation; multilateral institutions are more important in an interconnected world.",
    "IMF’s evolving role: new approaches, new tools, renewed relevance grounded in mandate.",
    "IMF as trusted adviser:",
    "IMF resources and lending activity (crisis period metrics):",
    "Governance and global ownership:",
    "Tribute to Japan: champion of multilateralism and global cooperation; celebrating 60 years of partnership with the IMF.",
    "Appreciation for IMF staff and Executive Directors for commitment and guidance.",
    "Human story and metaphor: essay by Nao Yonemoto recounting the proverb “give salt to your opponent” — be generous to those in need; helping each other in difficult times is the only way forward.",
    "Final message: the spirit of cooperation is essential; encourage delegates to carry it home.",
    "[101212aapdf (PDF)](/-/media/websites/imf/imported/external/arabic/np/speeches/2012/101212aapdf.pdf){rel=\"external\" type=\"application/pdf\"}",
    "[101212acpdf (PDF)](/-/media/websites/imf/imported/external/chinese/np/speeches/2012/101212acpdf.pdf){rel=\"external\" type=\"application/pdf\"}",
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    "[101212arpdf (PDF)](/-/media/websites/imf/imported/external/russian/np/speeches/2012/101212arpdf.pdf){rel=\"external\" type=\"application/pdf\"}",
    "[People's Republic of China and the IMF](http://www.imf.org/external/country/CHN/index.htm)",
    "[India and the IMF](http://www.imf.org/external/country/IND/index.htm)",
    "[Japan and the IMF](http://www.imf.org/external/country/JPN/index.htm)",
    "[Brazil and the IMF](http://www.imf.org/external/country/BRA/index.htm)",
    "[IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)",
    "[Speeches](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[Webcast](https://www.imf.org/external/mmedia/view.aspx?vid=1895342392001)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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