MIL OSI Translation. Government of the Republic of France statements from French to English –
Source: IMF in French
Kristalina Georgieva, Managing Director, IMF Washington
October 15, 2020
1. Introduction: human fraternity and sorority
To begin with, I would like to thank Mr. Ernest Kwamina Addison for the correctness of his remarks and for his excellent work at the head of the Governing Council of the IMF.
It was in reflecting on the dramatic developments we have experienced over the past year that I traveled to Bretton Woods, New Hampshire, where 44 men signed our Statutes in 1944. Our founders The institutions had to tackle two gigantic tasks: to remedy the ravages caused by war as quickly as possible and to lay the foundations for a more peaceful and prosperous world.
By the end of the conference, John Maynard Keynes saw how much hope international cooperation can bring to the world. “If we can continue … human brotherhood will have become more than a sentence,” he said.
As we look forward to welcoming our 190th member country, Andorra, the work of the IMF bears witness to the values of cooperation and solidarity upon which human brotherhood and sisterhood are based.
Today is a new Bretton Woods “moment”. A pandemic that has already claimed more than a million lives. An economic disaster that will reduce the size of the global economy by 4.4% this year and is expected to cut production by $ 11 trillion by next year. And immense human despair in the face of gigantic upheaval and increasing poverty, for the first time in decades.
Once again, we must tackle two colossal tasks: combating the crisis today and building a better future.
We know what it’s up to us to do right now. Only a victory against the pandemic will allow lasting economic recovery. Health measures remain a priority: I urge you to promote the production and distribution of effective treatments and vaccines to ensure that all countries have access to them.
I also urge you to continue to help workers and companies until a lasting exit from the health crisis.
Globally, fiscal measures have been taken to the tune of $ 12 trillion. The major central banks inflated their balance sheets by 7.5 trillion dollars. These synchronized measures avoided the destructive macro-financial feedback effects that we have observed in previous crises.
That said, almost all countries are still experiencing difficulties, especially emerging countries and developing countries. And while the global banking system has approached the crisis with high buffers of capital and liquidity, some banks are fragile in many emerging countries. We must therefore take measures to avoid the accumulation of financial risks in the medium term.
We are at the start of what I have called a long rise for the world economy: the rise will be steep, rugged, uncertain – and prone to setbacks.
But it’s a progression. And we will have the opportunity to tackle some of our lingering problems: low productivity, slow growth, high inequalities, looming climate crisis. We can do better than rebuild the world from before the pandemic: we can move forward and build a more resilient, more sustainable and more inclusive world.
We must seize the opportunity presented by this new Bretton Woods “moment”.
2. Three imperatives for building a new world
How do we do it? By respecting three imperatives.
First, the right economic policies. What was true at Bretton Woods is still true today. Prudent macroeconomic policies and strong institutions are essential for growth, jobs and improved living standards.
There is no panacea: action must be tailored to the needs of each country. Support remains essential for a while: early withdrawal risks causing serious and unjustified damage. The state of the crisis will determine the type of support needed, which will typically be more comprehensive at first and then more targeted as countries begin to recover.
Strong medium-term monetary, fiscal and financial policy frameworks, as well as reforms to boost trade, competitiveness and productivity can help create a climate of confidence conducive to action, while building the resilience needed for the future.
This includes monitoring the risks posed by high public debt. We expect debt levels to increase significantly in 2021, to around 125% of GDP in advanced countries, 65% of GDP in emerging countries and 50% of GDP in low income countries.
The IMF is reducing the debt of its poorest member countries and, together with the World Bank, we endorse an extension of the G20 debt service suspension initiative.
In addition, when debt is unsustainable, it must be restructured without delay. We need to increase debt transparency and strengthen creditors coordination. I am encouraged by the G20 talks on a common sovereign debt resolution framework and our call to improve the architecture of sovereign debt resolution, including private sector participation.
We are alongside our member countries to help them implement their policies.
Policies at the service of populations: this is my second imperative.
Good economic policies only bear full fruit if we invest more in people. This requires the protection of vulnerable groups. This also requires the enhancement of human and physical capital, a pledge of growth and resilience.
COVID-19 has revealed the importance for countries of having strong health systems.
Rising inequalities and rapidly changing technologies demand strong education and training systems that can increase opportunities and reduce disparities.
Accelerating progress towards gender equality can be a game-changer at the global level. In the most unequal countries, closing the gap between men and women could increase GDP by 35% on average.
Investing in our youth is investing in our future. Young people must have access to health and education, and also to the Internet, because this gives them access to the digital economy, so important for growth and development in the future.
By ensuring that the population of sub-Saharan Africa with Internet access increases by 10%, it would be possible to increase real growth in GDP per capita by 4 percentage points.
The digital switchover is also helping to make financial inclusion a powerful tool for poverty reduction.
The pandemic has not only shown us that we can no longer afford to neglect certain health precautions, but also that we can no longer ignore climate change – my third imperative.
We care about climate change because it is crucial at the macroeconomic level: it poses a serious threat to growth and prosperity. It is also decisive for populations and for the planet.
The direct damage caused by climate disasters over the past decade is estimated at around $ 1.3 trillion. The climate crisis promises to be just as devastating as the health crisis.
According to one of our studies, we can target the end of greenhouse gas emissions by 2050 and create millions of new jobs, provided that the appropriate proportions of green investments and increase in carbon prices.
We have a historic opportunity to seize: that of building a greener world, but also more prosperous and richer in jobs. Interest rates have hit rock bottom; we must take this opportunity to make wise investments today, which will pay off four times in the future: they will save us future losses, stimulate economic gains, save lives, and benefit everyone socially and environmentally.
3. The role of the IMF
The IMF works tirelessly to foster a sustainable recovery – and a resilient future, as countries adapt to structural transformations caused by climate change, the accelerating digital switchover and the rise of the knowledge economy.
Since the start of the pandemic, we have committed more than $ 100 billion, and we still have significant resources with a lending capacity of $ 1,000 billion.
We will continue to pay particular attention to the urgent needs of emerging countries and low-income countries, especially small and fragile countries, helping them pay health workers and protect households and sectors. most vulnerable economies.
The unprecedented steps we have taken would not have been possible without the generous contributions of our member countries. The doubling of new loan agreements and a new round of bilateral borrowing agreements preserve our lending capacity. Member countries have also made critical contributions to our Disaster Assistance and Response Trust Fund and our Poverty Reduction and Growth Trust.
This has enabled us to help our low-income member countries with debt relief and to triple our concessional loans. We are engaging with our member countries with a view to further enhancing our capacity to grant concessional loans, adapt our lending mechanisms and strengthen our support for their capacity development.
The staff of the IMF, who are working day and night, are doing a tremendous job during this crisis. I would like to thank them from the bottom of my heart, as well as my management team.
I would also like to salute our directors, who have worked with us consistently over the past six months.
4. Conclusion: an opportunity to be seized
The best way to honor the memory of all those who have lost their lives in this crisis is, in the words of Mr Keynes, to build “something bigger”: a more sustainable and fairer world.
The founders of our institutions did it. Now it’s our turn. The time has come !
It is now my pleasure to introduce to you a privileged partner of the IMF, my friend David Malpass, President of the World Bank Group.
IMF Communications Department
PHONE: +1 202 623-7100 EMAIL: MEDIA@IMF.org
EDITOR’S NOTE: This article is a translation. Apologies should the grammar and / or sentence structure not be perfect.