IMF Managing Director visits Georgetown before annual meeting
On Thursday morning, the Managing Director of the International Monetary Fund Christine Lagarde called on America and other nations to overcome growth stagnation in the global economy. This comes a week before the World Bank Group-IMF annual meeting in D.C.
It wouldn’t be a Gaston Hall speaker event, however, unless somebody in Red Square had a problem with it. Prior to Lagarde’s arrival, a small group of students was demonstrating and flyering against the IMF in Healy Circle. The brave protesters also put on a “performance” protest in Red Square, where they played “International Monopoly Fund,” criticizing the IMF for its lending practices and criteria.
Lagarde gave a 40-minute, prepared speech, which focused on the shaky global, economic recovery and the “grey clouds” on the horizon.
Lagarde highlighted her concern over financial excesses building up in advanced economies, citing the growth of the shadow banking sector—the less regulated, non-bank sector—and geopolitical instability from developments in Ukraine and the Ebola epidemic.
“Six years after the financial crisis, we continue to see weakness in the global economy,” she said. The world economy risks getting mired in a mediocre level of growth that is self-perpetuating because it encourages cut backs in consumption and investment.
Using an analogy of a basketball team that uses all its players, Lagarde emphasized the need for a balanced policy toolkit. Traditional money policy is effective but can only do so much. “You have to use all the tools available,” Lagarde said.
Lagarde mentioned structural labor reform, including increasing female participation in the workforce, and a need for both public and private investment in infrastructure as examples. Lagarde polled the audience on the whether they cycled (few in the audience did) to make her point about the dearth of infrastructure development.
“There is no magic recipe because it has to be country specific,” Lagarde said, referring to the policy tools.
Ending on the promising note of G20 multilateralism, Lagarde noted that the very founding of the IMF itself was a fine example of global economic cooperation.
Photos: Top, Vox Populi. Side,