{
  "title": "The Future of Bretton Woods",
  "publication": "IMF News, July 16, 2019",
  "sourceUrl": "https://www.imf.org/en/news/articles/2019/07/12/sp071619-the-future-of-bretton-woods",
  "canonical": "https://www.imf.org/en/news/articles/2019/07/12/sp071619-the-future-of-bretton-woods",
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  "summary": "In a keynote speech marking the 75th anniversary of the Bretton Woods conference, IMF Acting Managing Director David Lipton explains how the IMF will continue to adapt to help its members secure economic stability and prosperity for the next 75 years and beyond.",
  "publishDate": "2019-07-16",
  "sections": [
    {
      "heading": "Overview and context",
      "content": "- Keynote speech by IMF Acting Managing Director David Lipton at \"At the Bretton Woods: 75 Years Later – Thinking About the Next 75 Conference\" hosted by the Banque de France, July 16, 2019.\n- Framed as reflections on past 75 years and guidance for how the IMF must continue to adapt over the next 75 years and beyond.\n- Central themes: adapting to shifts in global economic power, technological change (including Fintech and digital currencies), and threats to multilateralism and global prosperity."
    },
    {
      "heading": "The past 75 years — historical assessment and institutional adaptability",
      "content": "- Bretton Woods architects reacted to the interwar breakdown of multilateralism, protectionism, gold standard malfunction, and competitive devaluations.\n- Outcomes cited:\n  - Global GDP per capita is five-fold higher than in 1945.\n  - Over one billion people breaking free of poverty.\n- IMF evolution highlighted:\n  - Pivot from fixed exchange rates to flexible rates.\n  - Responses to Latin America debt crises.\n  - Support for transition economies emerging from communism.\n  - Responses to 21st century crises from cross-border capital flows.\n- Institutional design point:\n  - IMF governance is quota-based rather than one-country-one-vote, enabling adjustment to members’ rising prominence."
    },
    {
      "heading": "Major shifts in economic activity — findings and projections",
      "content": "- Membership and global reach:\n  - IMF has 189 members.\n- Structural shifts and projections:\n  - Share of advanced economies in global output is expected to fall from more than one-half to about one-third over the next 25 years.\n  - Aging populations in advanced economies will gradually consume savings even as younger countries need to finance investments; rising life expectancy and declining fertility rates will bring aging issues globally.\n  - Hubs of economic activity will shift; new financial centers will grow; new reserve currencies may eventually emerge.\n- Institutional implications:\n  - The IMF must remain quota-based and further evolve its governance and formulae so that countries gaining economic importance gain commensurate say.\n  - Tools and policies must be continuously aligned with changing economic realities (example cited: inclusion of the renminbi in the SDR basket)."
    },
    {
      "heading": "Adapting to new technology — opportunities, risks, and IMF role",
      "content": "- Technology and labor:\n  - Technological advances can accelerate productivity and lift incomes but also displace jobs; reference to Keynes’ “technological unemployment.”\n- Fintech and financial inclusion:\n  - Fintech can increase efficiency and transparency; potential to end financial exclusion for the 1.7 billion people in developing countries who have no access to banking.\n  - Africa cited as needing to create 20 million jobs a year in the decades to come to keep up with population growth.\n  - IMF and World Bank developed the Bali Fintech Agenda as a framework for members to harness innovation while coping with risks.\n- Digital currencies, stablecoins, and regulatory issues:\n  - Nascent development of central bank digital currencies and privately-backed “stablecoins” (example referenced: Facebook’s Libra).\n  - IMF published a new paper (described as published \"yesterday\" in the speech) highlighting benefits, risks, and regulatory issues with digital currencies.\n  - Identified risks include:\n    - potential emergence of new monopolies and personal data monetization issues;\n    - impact on weaker currencies and expansion of dollarization;\n    - opportunities for illicit activities;\n    - threats to financial stability;\n    - challenges from corporates issuing and earning large sums previously the remit of central banks.\n- Policy implication:\n  - Regulators and the IMF must step up to create environments that reap benefits while minimizing risks."
    },
    {
      "heading": "Tackling threats to global prosperity — inequality, trade, governance, and climate",
      "content": "- Social and political risks:\n  - Breakdown of trust and social cohesion in advanced economies linked to trade, globalization, and technology; rise in anger, political polarization, and populism described as a potential \"reverse Bretton Woods moment.\"\n- Inequality and convergence:\n  - Although poverty rates have declined worldwide since 1980, the top-tenth of the top one percent worldwide has garnered roughly the same economic benefits that have accrued to the bottom 50 percent.\n  - For many developing countries, convergence with high-income countries has stalled.\n  - Four years ago, IMF estimated it would take about half a century for low-income countries to reach advanced economy living standards; if global integration falters, it may take much longer.\n- Policy priorities and recommendations:\n  - Use fiscal policy to help address inequalities; IMF developed a framework for social spending.\n  - Help countries raise revenues needed for future spending while ensuring fairness and a level playing field.\n  - Close loopholes in global corporate taxation, forestall profit shifting, and avoid a race to the bottom.\n  - Fight illicit financial flows and money laundering because corruption undermines trust.\n  - Modernize the international trade system, including services and e-commerce, to reduce trade tensions.\n  - Empower women: about 90 percent of countries still have legal barriers to female economic participation; removing these barriers is an economic priority.\n  - Accelerate response to climate change: IMF engages members on mitigating and adapting, advising on energy subsidies and carbon pricing, and helping countries enhance resilience to natural disasters."
    },
    {
      "heading": "Institutional prescription — the IMF’s continuing role",
      "content": "- Core IMF roles reiterated:\n  - Global convener, trusted advisor, and financial firefighter.\n- Imperative:\n  - Continue adapting governance, tools, and policies to reflect shifting economic power, technological transformations, and threats to multilateralism.\n- Closing exhortation:\n  - \"Hope, yes. But this is not a time to wait.\" Call to act together to pursue stability, prosperity, and peace.\n\nSource: Keynote speech by IMF Acting Managing Director David Lipton, \"The Future of Bretton Woods,\" July 16, 2019.\n\n---\n\n\n References\n\n- David Lipton\n- United States and the IMF\n- Speeches\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2019/07/12/sp071619-the-future-of-bretton-woods"
    }
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    "Published: July 16, 2019",
    "Keynote speech by IMF Acting Managing Director David Lipton at \"At the Bretton Woods: 75 Years Later – Thinking About the Next 75 Conference\" hosted by the Banque de France, July 16, 2019.",
    "Framed as reflections on past 75 years and guidance for how the IMF must continue to adapt over the next 75 years and beyond.",
    "Central themes: adapting to shifts in global economic power, technological change (including Fintech and digital currencies), and threats to multilateralism and global prosperity.",
    "Bretton Woods architects reacted to the interwar breakdown of multilateralism, protectionism, gold standard malfunction, and competitive devaluations.",
    "Outcomes cited:",
    "IMF evolution highlighted:",
    "Institutional design point:",
    "Membership and global reach:",
    "Structural shifts and projections:",
    "Institutional implications:",
    "Technology and labor:",
    "Fintech and financial inclusion:",
    "Digital currencies, stablecoins, and regulatory issues:",
    "Policy implication:",
    "Social and political risks:",
    "Inequality and convergence:",
    "Policy priorities and recommendations:",
    "Core IMF roles reiterated:",
    "Imperative:",
    "Closing exhortation:",
    "[David Lipton](http://www.imf.org/external/np/omd/bios/dl.htm)",
    "[United States and the IMF](http://www.imf.org/external/country/USA/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)"
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