## New Economic Landscape, New Multilateralism _IMF News, October 11, 2018_ ## Source details **Canonical URL:** [New Economic Landscape, New Multilateralism](https://www.imf.org/en/news/articles/2018/10/11/sp101218-new-economic-landscape-new-multilateralism) ## Other formats - [Markdown version](/en/news/articles/2018/10/11/sp101218-new-economic-landscape-new-multilateralism/index.md) - [Structured JSON version](/en/news/articles/2018/10/11/sp101218-new-economic-landscape-new-multilateralism/index.json) - [Bundle manifest](/en/news/articles/2018/10/11/sp101218-new-economic-landscape-new-multilateralism/bundle-manifest.json) ## Bibliographic details - Authors: Christine Lagarde - Published: October 11, 2018 --- ### Context and framing - Speech by Christine Lagarde, Managing Director, International Monetary Fund, as prepared for delivery on October 11, 2018. - Purpose: Address the IMF 2018 Annual Meetings in Bali; present the concept of a “new multilateralism” to respond to a changing global economic landscape. - Two-dimensional framing of the new economic landscape: - First dimension: monetary, fiscal, and financial layers. - Second dimension: inequality, technology, and sustainability. - Core claim: Sound domestic policies are essential but insufficient; navigating the new landscape requires international cooperation that is “more inclusive, more people-centered, and more results-oriented.” ### Macroeconomic challenges and policy implications - Trade - Trade cooperation has driven unprecedented growth over 70-plus years but faces a backlash because “too many people have been left out.” - IMF estimate: escalation of current trade tensions could reduce global GDP by almost one percent over the next two years. - Policy recommendation: De-escalate disputes and reform the global trade system “to make it even better, fairer, and stronger for all nations and all people.” - Global imbalances - Large current account deficits mirror large current account surpluses. - Policy recommendation: Excess deficit and surplus countries must cooperate to protect economic stability; IMF External Sector Report underscores this point. - Rising vulnerability to debt - Statistic: Public and private debt has hit a record $182 trillion—224 percent of global GDP, about 60 percent higher than 2007. - Risk: Tighter financial conditions could reverse capital flows, especially for emerging markets, with spillovers across borders and real impacts on people. - Policy recommendation: Complement domestic policies with a global financial safety net; resources could come from regional financing arrangements (example: the Chiang Mai Initiative) and the IMF; ensuring the Fund has needed resources requires international cooperation. - Cross-cutting IMF roles - Cooperation runs through the Fund’s work in lending, surveillance, and capacity development. - Areas of policy advice and support include financial regulatory reform, public debt transparency, capital flow management, and anti-money laundering. - Argument: In a hyper-connected world, no country can manage these issues alone; cooperation is in the Fund’s DNA. ### 21st-century challenges: inequality, technology, and sustainability - Inequality - IMF research: Less inequality is associated with stronger, more sustainable growth; excessive inequality correlates with marginalization, damaged communities, and eroded trust. - Policy recommendations: Partnerships among governments, private sector, and civil society to eradicate discrimination against women; design appropriate labor market reforms; strengthen education, training, and social protection systems to include people and prepare them for technological change. - Technology - Observation: The digital revolution (biotech, robotics, artificial intelligence) will create new industries and jobs but also disrupt and disenfranchise. - Fintech opportunity: Potential to reduce poverty by providing financial services to the 1.7 billion people who currently have no banking access (Global Findex Database, 2018). - Caution: Fintech must be managed carefully to protect financial stability and safety; digital is global and requires multilateral coordination. - Action: Launch of the Bali Fintech Agenda at the Meetings (with the World Bank and other partners) to guide joint efforts. - Sustainability and SDGs - Climate change: Increasingly negative effects require common action. - SDG financing gap: Additional spending needed by low-income countries in key sectors (health, education, water, infrastructure) is about $520 billion per year by 2030. - Policy recommendations: Partnerships among countries, private sector, donors, international institutions, and philanthropists; more efficient resource use; strengthen revenue collection (including curbing tax avoidance and evasion); stamp out corruption. - Framing: Solidarity on inclusion and climate action is both moral and in self-interest because tensions from exclusion and climate change cross borders. - Principles of the new multilateralism - Must be more inclusive (open to diverse views and voices). - Must be more people-oriented (putting human needs first). - Must be more effective and accountable (delivering results for all). - The IMF positions itself “at the heart of this new multilateralism.” ### Institutional and human elements - Acknowledgements in the speech: - Recognition of Indonesian hosts and ASEAN leaders; references to Indonesia’s economic progress and resilience following natural disasters in Lombok and Sulawesi. - Thanks to IMF Management, Executive Directors, staff, and retiring Economic Counsellor Maury Obstfeld for leadership and commitment to multilateralism. - Outreach and inclusion - Example of youth engagement: Winning photos from an IMF Instagram contest among ASEAN youth were shown to highlight anxieties and hopes of the rising generation. - Message: The new multilateralism is about the future of young people. ### Conclusion: Consider the common good - Closing exhortation: Quote from the Bhagavad-Gita, 3:20—“In all actions, consider the common good.” - Core appeal: Commit to the common good so that cooperative multilateral work benefits current and future generations. - Final message: The “offering” of collective work at the Annual Meetings should return blessings that benefit not only this generation but generations to come. *Source: Speech by Christine Lagarde, “New Economic Landscape, New Multilateralism,” IMF, October 11, 2018.* --- ## References - [Christine Lagarde](https://www.imf.org/en/About/senior-officials/Bios/christine-lagarde) - [Indonesia and the IMF](http://www.imf.org/external/country/IDN/index.htm) - [Speeches](https://www.imf.org/en/news/searchnews) - [PRESS CENTER](http://presscenter.imf.org/) - [https://www.imf.org/en/home](https://www.imf.org/en/home) _Source: https://www.imf.org/en/news/articles/2018/10/11/sp101218-new-economic-landscape-new-multilateralism_