## The IMF’s Purpose: Delivering for People

_IMF News, October 18, 2019_

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## Bibliographic details
- Authors: Kristalina Georgieva
- Published: October 18, 2019

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### Introduction
- Speaker: Kristalina Georgieva, IMF Managing Director.
- Occasion: 2019 World Bank Group - IMF Annual Meetings Plenary, October 18, 2019.
- Audience: governors of the IMF's 189 member countries.
- Key framing:
  - Quotation from John Maynard Keynes: “Economics is essentially a moral science and not a natural science. That is to say, it employs introspection and judgments of value.”
  - The IMF as a “transmission line” of knowledge, financial resources, good policies, and capacity development to help countries embrace change and reduce risks.

### Global outlook
Findings and key statistics:
- After a synchronized upswing, the world is facing a synchronized slowdown.
- A deceleration in nearly 90 percent of the world[i].
- Growth this year is expected to reach only3 percent[ii] — its lowest rate since the beginning of the decade.
- Drivers of slower growth: trade tensions reducing business confidence and investment; increased uncertainty (Brexit, geopolitical tensions); demographic pressures; record-high debt levels.
- Medium-term outlook is troubling, especially for countries already facing difficulties, including some Fund program countries.
- An estimate: 45 developing countries, a total of nearly 1 billion people, will grow more slowly in per capita terms than the advanced world.[iii]

Policy implications and recommendations:
- Step up cooperation within and across borders to prevent spillovers into currencies and technology.
- Move from a “trade truce” to “trade peace”; build a trade system that is fairer, more innovative, and more inclusive.
- Maintain supportive monetary policy given slower growth, recognizing monetary policy cannot do the job alone.
- Where space exists, fiscal policy must play a more active role.
- Commit to structural reforms to boost productivity and resilience:
  - Lower barriers to entry in service sectors.
  - Tackle gender discrimination in the labor market.
  - Modernize legal frameworks to reduce red tape and fight corruption.
- Pay careful attention to impacts on vulnerable groups when implementing reforms.

### Strengthening the connection between policies and people
Three priorities identified:

(a) Economic fundamentals
- Emphasize sound economic fundamentals as the starting point; policies are a means to build more prosperous societies.
- Personal testimony: Bulgaria’s currency crisis in the 1990s—mother lost 98 percent of her life savings to hyperinflation.
- Jamaica example: two IMF-supported programs delivered tangible results:
  - Reduction in public debt by 50 percent of GDP.
  - Historically low unemployment.
  - Inflation stability.
- Fund progress in approach:
  - Improving design of lending programs, including expanding support for low-income countries at zero interest.
  - Upgrading surveillance to enhance traction.
  - Further integrating capacity development with surveillance and lending.
- Need to go further given precarious outlook:
  - Focus more on countries most affected in a downturn, including fragile states.
  - Use tools more effectively, including precautionary instruments.
  - Make efforts more attuned to individual country circumstances.

(b) Inclusive growth
- Focus on what matters to people: better jobs with higher wages, greater access to finance, more opportunities for women and young people.
- Emphasize public and private investment to boost competitiveness and inclusion.
- “If you want to be wealthy tomorrow, invest in your people today.”
- IMF engagement on social spending has stepped up:
  - Ghana: helping to create fiscal space for more education spending.
  - Georgia: supporting efforts to increase the minimum public pension.
  - Egypt: helping to expand a cash transfer program for poorer households.[iv]
- Supporting increased public revenue is essential for progress on the Sustainable Development Goals.
- Leverage IMF’s global membership and 75 years of experience for cross-country and over-time perspective.
- Strengthen partnerships, including with the World Bank; commit to work with David Malpass to expand collaboration in key macro-critical areas and on the ground in program countries.

(c) Reinvigorating international cooperation
- IMF’s role in building bridges between nations is crucial as global economic interdependence rises.
- Priority areas requiring international cooperation:
  - Action on climate: continuing work on mitigation and adaptation, especially carbon pricing and building resilience.
  - Action on trade.
  - Corporate taxation.
  - Financial regulation.
  - Fighting money laundering and the financing of terrorism.
- Need for a strong global financial safety net with a well-resourced IMF at its center.
- Safeguarding the IMF’s financial strength is a top priority, paired with governance reforms to reflect dynamic membership.
- IMFC endorsement (earlier the same morning) of a package to ensure the Fund will continue to have sufficient resources and that quota and governance reforms will continue under the 16th General Review.
- Modernization priorities: streamlining systems, leveraging new technology, increasing staff diversity.

### Conclusion
- Serving the IMF’s 189 member countries is described as the speaker’s greatest honor.
- Personal reflection: journey from growing up behind the Iron Curtain to leading the IMF underscores the message: “Nothing is impossible. Change is unstoppable. We can build a better world.”

*Source: “The IMF’s Purpose: Delivering for People” — Kristalina Georgieva, 2019 World Bank Group - IMF Annual Meetings Plenary, October 18, 2019.*

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- **Staff Paper**
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## References

- [https://www.imf.org/en/about/senior-officials/bios/kristalina-georgieva](https://www.imf.org/en/about/senior-officials/bios/kristalina-georgieva)
- [Bulgaria and the IMF](http://www.imf.org/external/country/BGR/index.htm)
- [United States and the IMF](http://www.imf.org/external/country/USA/index.htm)
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_Source: https://www.imf.org/en/news/articles/2019/10/18/sp101819-md-am-plenary-speech_