How to rebuild the global economy
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0:00 - 0:03Chris Anderson: I get now to introduce
-
0:03 - 0:06one of the most powerful
women in the world. -
0:06 - 0:11I mean, if we are to escape
from the mess that we're in right now, -
0:11 - 0:15she is going to play a major part
in helping us do that. -
0:16 - 0:18She's the head of
the International Monetary Fund, -
0:18 - 0:22a delight to welcome here
Kristalina Georgieva. -
0:24 - 0:26Kristalina, welcome.
-
0:26 - 0:28Kristalina Georgieva:
Great to be with you, Chris. -
0:28 - 0:30Thank you for having me.
-
0:30 - 0:33CA: So you just took on
this role late last year, -
0:33 - 0:37and within four months,
boom, COVID arrives. -
0:37 - 0:40That is one heck
of an introduction to a new job. -
0:40 - 0:41How are you doing?
-
0:43 - 0:47KG: Well, I find strength in action.
-
0:47 - 0:49And at the Fund,
-
0:49 - 0:52we have been, from day one on this crisis,
-
0:52 - 0:56leaning forward with everything we have
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0:56 - 0:59to provide lifelines to countries,
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0:59 - 1:03and that means to people and businesses.
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1:03 - 1:08Already, we have received over 90 requests
-
1:08 - 1:14and we have offered, to 56 countries,
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1:14 - 1:16critical financial packages.
-
1:18 - 1:22CA: You've described this pandemic
as a crisis like no other. -
1:22 - 1:24In what way a crisis like no other?
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1:26 - 1:28KG: Truly like no other.
-
1:28 - 1:32First, never before
-
1:32 - 1:39we will inflict on the economy
consciously so much pain -
1:39 - 1:42to fight a virus and save lives.
-
1:42 - 1:46We are asking businesses not to produce
-
1:46 - 1:49and consumers not to go out and consume.
-
1:49 - 1:53At the Fund, we labeled this
"the Great Lockdown." -
1:55 - 1:56Second,
-
1:56 - 1:59never before
-
1:59 - 2:06there would be such
a rapid change of fortunes -
2:06 - 2:10practically for everybody
around the world. -
2:10 - 2:13In January, I was in Davos,
-
2:13 - 2:17talking about "anemic growth,"
growth of three percent. -
2:17 - 2:23In April, during our spring meetings,
it was already minus three percent. -
2:24 - 2:25In January,
-
2:25 - 2:31we predicted 160 countries
to have positive income per capita growth. -
2:32 - 2:38Now it is 170 countries
with negative income per capita growth. -
2:39 - 2:42Now this, we call "the Great Reversal."
-
2:43 - 2:44Very painful.
-
2:45 - 2:48And three, uncertainty.
-
2:48 - 2:50We always live with uncertainty, Chris,
-
2:50 - 2:52but this time,
-
2:52 - 2:57it is the uncertainty
of a novel coronavirus -
2:57 - 3:01that policymakers have to integrate.
-
3:01 - 3:07We at the Fund combine
epidemiological projections -
3:07 - 3:10with our traditional
macroeconomic modeling -
3:10 - 3:13to see through that uncertainty.
-
3:15 - 3:17I must add to this,
-
3:17 - 3:22I very much hope that when we go
on the other side in the recovery, -
3:22 - 3:27we can use a new term
and call it "the Great Transformation." -
3:28 - 3:30Make the world a better place.
-
3:31 - 3:35CA: Well, I'll be excited
to come on to that in a bit. -
3:35 - 3:38But in this moment
of responding to the crisis, -
3:38 - 3:41the main tool that seems
to have been executed, -
3:41 - 3:43at least by the rich countries,
-
3:43 - 3:47has been this massive economic stimulus,
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3:47 - 3:49to the tune of trillions of dollars.
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3:50 - 3:52Is that a wise response?
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3:53 - 3:56KG: It is a necessity.
-
3:56 - 4:01And you don't hear the Fund
often telling countries, -
4:01 - 4:02"Please, spend.
-
4:02 - 4:04Spend as much as you can."
-
4:04 - 4:06And that is what we do now.
-
4:06 - 4:07We do add to that,
-
4:07 - 4:10"And keep the receipts.
-
4:10 - 4:15Don't lose accountability
to the citizens, to the tax payers." -
4:15 - 4:21The reason financial
injection is necessary, -
4:21 - 4:27these fiscal measures of almost
nine trillion dollars are necessary, -
4:27 - 4:31is because when the economy
is standing still, -
4:31 - 4:33unless there is help,
-
4:33 - 4:37unless there is monetary policy stimulus,
-
4:37 - 4:41firms are going to go massively bankrupt,
-
4:41 - 4:43people would be unemployed,
-
4:43 - 4:46the economy would be scarred.
-
4:46 - 4:48When we go to the other side,
-
4:48 - 4:52this scarring is going to make
the recovery much more difficult. -
4:53 - 4:56So that is a wise thing to do,
-
4:56 - 5:01and it helps the fact
that central banks in major economies -
5:01 - 5:05have been acting in a synchronized manner
-
5:05 - 5:08and that fiscal stimulus
came really, really fast. -
5:09 - 5:13This is how we see people
being able to go through this -
5:13 - 5:15very, very tough time.
-
5:16 - 5:17CA: But how far can it go?
-
5:17 - 5:20Because it's been described,
in a sense, as "printing money" -- -
5:20 - 5:23governments are issuing
more and more bonds -
5:23 - 5:27that have to paid back at some point.
-
5:27 - 5:30There's this term, in economics,
of the Minsky moment, -
5:30 - 5:32where things can go very well for a while,
-
5:32 - 5:37as everyone believes that, you know,
-
5:37 - 5:39that the train can keep running,
-
5:39 - 5:40the cycle can keep turning,
-
5:40 - 5:43you know, that governments
have all this money. -
5:43 - 5:46At some point, though,
doesn't that break down? -
5:46 - 5:49Do you worry that we may be
nearing a Minsky moment, -
5:49 - 5:52where, like Michael in Mary Poppins
-
5:52 - 5:54grabs his tuppence
and starts a run on the bank. -
5:54 - 5:58Is there stress in the international
financial system now -
5:58 - 6:00that concerns you,
-
6:00 - 6:03that makes you feel that we may be
running out of headroom? -
6:04 - 6:08KG: Of course, this cannot go on forever.
-
6:09 - 6:11I, for one, have trust in our scientists,
-
6:11 - 6:14I think we will see breakthroughs,
-
6:14 - 6:18and we will see also people in businesses
-
6:18 - 6:21getting accustomed to social distancing,
-
6:21 - 6:26to micromeasures that protect
from spreading the disease. -
6:26 - 6:31We have seen very massive injection
in health systems, -
6:31 - 6:35so hospitals can actually
treat people that are coming for help. -
6:36 - 6:40Obviously, if it is to go
for a very long time, -
6:40 - 6:42we would be worried.
-
6:42 - 6:44For now,
-
6:44 - 6:46what we are projecting
-
6:46 - 6:50is that there would be
a gradual reopening -- -
6:50 - 6:53we see it already happening
in a number of countries. -
6:54 - 6:57And we project for next year, 2021,
-
6:57 - 6:59a partial recovery.
-
6:59 - 7:01Not a full recovery, unfortunately,
-
7:01 - 7:03but coming to a better place.
-
7:04 - 7:06Now, what helps us
-
7:06 - 7:10is something that I
don't particularly love, -
7:10 - 7:14but I see it as a positive feature --
-
7:14 - 7:17very low interest rates,
-
7:17 - 7:19in some cases, negative --
-
7:19 - 7:26that allows this injection
of fiscal measures and liquidity -
7:26 - 7:30to be sustained over a number of years.
-
7:30 - 7:33And for now, we do not see on the horizon
-
7:33 - 7:37any return to increase in interest rates.
-
7:37 - 7:39So low for longer,
-
7:39 - 7:44and that is, in that environment,
a helpful feature. -
7:47 - 7:51CA: I mean, the financial crisis of 2008
-
7:51 - 7:54came perilously close to breaking
the entire financial system -- -
7:54 - 7:56arguably, it did that.
-
7:56 - 7:58By most people's calculation,
-
7:58 - 8:02this is a far worse impact
to the economy overall. -
8:02 - 8:05Did the world learn something from 2008
-
8:05 - 8:08that has helped us so far
be resilient this time? -
8:10 - 8:15KG: What the world learned
is that the financial system -
8:15 - 8:18has to be tested
-
8:18 - 8:22and then strengthened to withstand shocks.
-
8:22 - 8:25And that is helping us tremendously today.
-
8:26 - 8:30The banking system is resilient,
-
8:30 - 8:36and even in the nonbanking
financial institutions, -
8:36 - 8:38there is more attention paid
-
8:39 - 8:45to how far can you go
without running into trouble. -
8:46 - 8:47I would say,
-
8:47 - 8:49if you look around the world,
-
8:49 - 8:56the most important lesson then
was "build resilience to shocks." -
8:57 - 9:01Those who have done it cope now better.
-
9:01 - 9:05And those who have not done it
are in a much tougher spot. -
9:05 - 9:07And actually, for the Fund,
-
9:07 - 9:09what we are praying
-
9:09 - 9:15is that we will come out of this crisis
with this lesson about resilience -
9:15 - 9:19being spread beyond the banking system,
-
9:19 - 9:23so we actually have
this crisis-management mindset -
9:23 - 9:29for a world that is inevitably
going to be more shock-prone, -
9:29 - 9:30because of climate
-
9:30 - 9:37and also because of the sheer density
of economic and social life on our planet. -
9:38 - 9:40CA: In your role,
-
9:40 - 9:45you're paying special attention
to the situation in developing countries. -
9:45 - 9:49And it does seem that they're facing
a really terrible situation right now. -
9:49 - 9:56Many of them have significant debt
denominated in dollars. -
9:56 - 9:57In the current crisis,
-
9:57 - 10:02their currencies are depreciating
against the dollar, -
10:02 - 10:08making it nigh impossible for them
to execute the kind of injection, -
10:08 - 10:09stimulus injections,
-
10:09 - 10:11that the rich countries are doing
-
10:11 - 10:13and seems to be the only way out.
-
10:13 - 10:16So that seems like
a really dangerous cycle. -
10:16 - 10:19Is there any way to break that cycle?
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10:19 - 10:23KG: Well, let me first separate
-
10:23 - 10:27countries that have built
strong fundamentals. -
10:27 - 10:28And now in this crisis,
-
10:28 - 10:33as we are receiving incoming data,
-
10:33 - 10:37not very many, but there are still
some positive surprises, -
10:37 - 10:41and they come from countries
that have built stronger buffers, -
10:41 - 10:42stronger fundamentals,
-
10:43 - 10:45have been more disciplined
during good times. -
10:46 - 10:48But indeed, we do see
-
10:48 - 10:52quite a number of emerging markets,
developing countries, -
10:52 - 10:55faced with multiple pressures.
-
10:55 - 10:58They had the hit from the coronavirus,
-
10:58 - 11:02many of them with weak health systems.
-
11:02 - 11:06Then, they have the high level
of indebtedness, -
11:06 - 11:08from before the crisis,
-
11:08 - 11:11which creates a much more difficult
environment for them. -
11:12 - 11:15Then, many of them
are commodity exporters. -
11:16 - 11:19Commodity prices, oil price,
-
11:19 - 11:21they went down very dramatically,
-
11:21 - 11:22that hits them again.
-
11:23 - 11:25Many rely on remittances.
-
11:25 - 11:29Remittances shrunk some 20 to 30 percent.
-
11:30 - 11:35And then you have a number of countries
that are highly dependent on tourism. -
11:35 - 11:39Tourism is the hardest hit sector,
or one of the hardest hit. -
11:39 - 11:42So, very tough for these countries,
-
11:42 - 11:48but this is why institutions like mine
have been wisely created. -
11:49 - 11:53The IMF, the World Bank,
the regional development banks, -
11:53 - 11:57we work very closely together
in this crisis. -
11:57 - 11:59The IMF, fortunately,
-
11:59 - 12:06that was one of the lessons
from the 2008-2009 crisis -- -
12:06 - 12:11make sure that in the center
of the financial safety net is an IMF -
12:11 - 12:13with financial strength.
-
12:13 - 12:17We have four times
more money to lend today -
12:18 - 12:19than we had then.
-
12:19 - 12:23From 250 billion to one trillion dollars.
-
12:23 - 12:25And of course,
-
12:25 - 12:27we are deploying these funds
-
12:27 - 12:30exactly for the countries
that need us the most. -
12:30 - 12:32And we did one more thing.
-
12:32 - 12:36With David Malpass,
the president of the World Bank, -
12:36 - 12:42we called for a debt moratorium
for the poorest countries -
12:42 - 12:45to their official bilateral creditors.
-
12:45 - 12:49And people tend to say,
"Oh, we don't work together, -
12:49 - 12:50it's not good enough."
-
12:50 - 12:56But here is an area
where we made this call in late March, -
12:56 - 12:58and in mid-April,
-
12:58 - 13:01the G20 agreed on this moratorium.
-
13:03 - 13:05Amazing, we had the Paris Club, China,
-
13:05 - 13:07the Gulf countries,
-
13:07 - 13:13all agreeing that we should not
suffocate the poorest countries -
13:13 - 13:15by asking them to pay their debts
-
13:15 - 13:18when their economies are standing still.
-
13:19 - 13:22CA: Is it possible
that some developing countries -
13:22 - 13:26are overdoing the lockdown policy?
-
13:26 - 13:30I mean, if large numbers of your citizens
are already struggling to stay alive, -
13:30 - 13:34isn't it almost like a death sentence
to order them not to leave their homes? -
13:35 - 13:39KG: Well, Chris, one of the most
heartbreaking conversations I would have -
13:39 - 13:45is with leaders of countries
where they have to stare in the face -
13:45 - 13:49a choice of people dying from the virus
-
13:49 - 13:51or dying from hunger.
-
13:51 - 13:56And it is a very dramatic
situation for them. -
13:58 - 14:01Where you have a very large
part of your economy -
14:01 - 14:02being informal,
-
14:02 - 14:06where people live hand-to-mouth every day,
-
14:06 - 14:11the lockdowns we have
in advanced economies -
14:11 - 14:13are not quite applicable,
-
14:13 - 14:14but even there,
-
14:14 - 14:19countries are doing really well
in social distancing -
14:19 - 14:21to the extent it is possible.
-
14:21 - 14:24Many of the countries in Africa
-
14:24 - 14:28were very early to step up
preventive measures. -
14:28 - 14:29Why?
-
14:29 - 14:32They learned from the Ebola,
they learned from prior crises -
14:32 - 14:33that hygiene,
-
14:33 - 14:38taking any measure you can really helps.
-
14:38 - 14:40So again, I cannot stress enough
-
14:40 - 14:44how important is solidarity
with these countries. -
14:44 - 14:50How important it is for my institution
to be there for them in a timely manner. -
14:50 - 14:52And we do it.
-
14:53 - 14:54CA: Whitney.
-
14:55 - 14:57Whitney Pennington Rogers:
Hi there, thank you, -
14:57 - 14:59this is a wonderful conversation,
-
14:59 - 15:02and we're starting to see
some questions coming from the community. -
15:02 - 15:04The first one we have is from Bill Elkus,
-
15:04 - 15:07and it's a follow-up to something
you were mentioning earlier, -
15:07 - 15:09related to the stimulus, Kristalina.
-
15:09 - 15:13What are the prospects for inflation
from such a large stimulus? -
15:16 - 15:17KG: At this point,
-
15:17 - 15:21we are not worried about inflation
in advanced economies -
15:21 - 15:27and in the majority of emerging
market economies. -
15:27 - 15:29We do worry about inflation
-
15:29 - 15:34in countries that have weak fundamentals,
-
15:34 - 15:39no access to foreign exchange easily,
-
15:39 - 15:44where the only way to address the crisis
-
15:44 - 15:47is our help
-
15:47 - 15:51or their central banks
printing more money. -
15:52 - 15:55And sometimes it's
a combination of those two. -
15:55 - 15:58Why I don't worry about inflation
in advanced economies? -
15:59 - 16:05Because countries
that have their hard currency -
16:05 - 16:10are putting liquidity in place,
-
16:10 - 16:11but at the same time,
-
16:11 - 16:18they're not seeing
a big expansion of demand -
16:18 - 16:20and prices being pushed up.
-
16:21 - 16:24So for these countries,
-
16:25 - 16:28at least for the observable future,
-
16:28 - 16:34we don't see a way of going,
like after the Second World War, -
16:34 - 16:36in inflation jumping up.
-
16:37 - 16:42The consumers are not consuming
so aggressively, -
16:42 - 16:45demand is not that strong,
-
16:45 - 16:51and these are societies
where there is a lot of maturity -
16:51 - 16:56in how they exercise their policy options.
-
16:56 - 16:59But if you are a poor country,
-
16:59 - 17:04that out of desperation,
with no access to markets, -
17:04 - 17:07no access to hard currency,
-
17:07 - 17:13ought to somehow put money supply enough,
-
17:13 - 17:15then inflation is going to be there.
-
17:15 - 17:18A very extreme case is Zimbabwe,
-
17:18 - 17:21and I do worry there may be
other countries. -
17:21 - 17:27So this is why we are so determined
to engage with these countries early. -
17:28 - 17:32And also look at some
of the high-debt countries. -
17:32 - 17:38Would it be necessary,
on a country-by-country basis, -
17:38 - 17:40to restructure debts
-
17:40 - 17:46to prevent that moving
in a desperate direction? -
17:48 - 17:49WPR: Thank you.
-
17:49 - 17:53And we have one more question
that I wanted to share from our community. -
17:53 - 17:54This is from Keith Yamashita,
-
17:54 - 17:57and it's about how we all can
be involved in some of this change. -
17:57 - 18:00"You are tasked with macro-economic
and funding efforts. -
18:00 - 18:03What should we do as citizens
to help renewal and recovery?" -
18:04 - 18:09KG: Well, it is incredibly important
for all of us citizens -- -
18:09 - 18:15and aside of being the head of the IMF,
I am also a global citizen -- -
18:15 - 18:20that we are to bring that notion
-
18:20 - 18:24of solidarity in a moment of crisis.
-
18:25 - 18:30I loved the way this segment
-
18:30 - 18:36was musically backed,
and it was "Lean on Me." -
18:37 - 18:42It is very important
that we do create that sense -- -
18:42 - 18:46"we are in this together,
we will get through it together." -
18:47 - 18:49And please, speak up on that.
-
18:50 - 18:54I was, for many years,
crisis commissioner, -
18:54 - 18:59and one thing I learned
is that the majority of people -
18:59 - 19:02are positive, good people.
-
19:03 - 19:05You can lean on them.
-
19:06 - 19:12And there is a minority
that is hateful and fearful -
19:12 - 19:14and also very loud.
-
19:14 - 19:18So, good people, speak up.
-
19:19 - 19:23Spread that sense of
"we are in this together, -
19:23 - 19:24we'll get through it together."
-
19:26 - 19:29WPR: Thank you. I'll come back later
with other questions. -
19:31 - 19:34CA: Kristalina, I'd love to expand on that
-
19:34 - 19:37and just ask you a bit more
about leadership, actually. -
19:37 - 19:41You know, when people think
of the nations that have performed best, -
19:41 - 19:43they often refer to --
-
19:43 - 19:47when I say best, best in response
to the current pandemic -- -
19:47 - 19:50they often refer to Germany, New Zealand,
-
19:50 - 19:53South Korea, Taiwan, Denmark and Norway.
-
19:54 - 19:56When they think of those
that have performed worst, -
19:56 - 20:01they often think of Spain,
Italy, the UK, Belgium, -
20:01 - 20:04Sweden, Iran, Brazil, Russia
-
20:04 - 20:06and the United States.
-
20:08 - 20:11All of that second group are run by men,
-
20:11 - 20:14all but one of the first group
are run by women. -
20:14 - 20:16Is that a coincidence?
-
20:17 - 20:20KG: Well, now,
-
20:20 - 20:25speaking a bit subjectively as a woman,
-
20:25 - 20:31I do believe that women are great
to lead in a crisis. -
20:32 - 20:37They are more likely to show empathy,
-
20:37 - 20:41to care about the most vulnerable people
-
20:41 - 20:44and to be able to speak about that.
-
20:45 - 20:46They are decisive.
-
20:46 - 20:48I can say that for myself,
-
20:48 - 20:52we take energy from action.
-
20:53 - 20:59And we don't tend to,
kind of, mourn and complain -
20:59 - 21:01too much.
-
21:02 - 21:06So there is perhaps something to be said
-
21:06 - 21:11about the value of gender
equality for the future. -
21:12 - 21:18Bring more women for this world
of more crisis ahead of us. -
21:20 - 21:23CA: It's obviously hard to make
generalizations about gender of any kind, -
21:23 - 21:27but I mean, is there also,
almost, something -
21:27 - 21:29about the embracing of nuance,
-
21:29 - 21:31that women might be
better at that than men? -
21:31 - 21:34Men are often, it's like,
"let's win, let's conquer," -
21:34 - 21:38and in a situation like this,
where it's all probabilities, -
21:38 - 21:42it's like, there are so many
complex dials to turn -
21:42 - 21:49on this dangerous pandemic machine
that we're trying to wrestle. -
21:49 - 21:52I mean, are women better
at handling nuance? -
21:52 - 21:54KG: Let me say something, Chris.
-
21:54 - 21:55We need everybody,
-
21:55 - 22:00and we need this mixture of experience,
knowledge and predisposition. -
22:00 - 22:03Men and women coming together.
-
22:03 - 22:09I find it that it is great
to have different perspectives -
22:09 - 22:10when we make decisions.
-
22:10 - 22:15Then, the chances of making
a good decision are higher. -
22:15 - 22:18So we need each other,
-
22:18 - 22:22but we also need to recognize
is that yes, there are certain things, -
22:22 - 22:25I have seen it time and again,
-
22:25 - 22:30women are more willing to find
a pathway to compromise, -
22:30 - 22:36they're more willing
to be corrected if they're wrong. -
22:36 - 22:38Say, "Oh, OK, that's a good point,
-
22:38 - 22:41let me integrate it
in the way I think about it." -
22:41 - 22:44And when you are in uncertainty,
-
22:44 - 22:48that is a huge advantage
in decision-making. -
22:50 - 22:53CA: So perhaps talk a bit more
about your own leadership in this moment. -
22:53 - 22:56I mentioned you've only recently
come to this job. -
22:56 - 22:58Before that, you were
European Commissioner, -
22:58 - 23:03you dealt with humanitarian crises
in more than one part of the world. -
23:03 - 23:05And in your own country, Bulgaria,
-
23:05 - 23:08you witnessed the wholesale
transformation of the country, -
23:08 - 23:10both politically and economically.
-
23:10 - 23:14What lessons can you bring
from your past experience -
23:14 - 23:15to this moment?
-
23:17 - 23:19KG: Well, there are many things I learned.
-
23:19 - 23:23I was very fortunate
to have these multiple experiences -
23:23 - 23:25for the job I have now.
-
23:26 - 23:28But let me highlight three.
-
23:29 - 23:34First, how critically important it is
-
23:34 - 23:39to prepare for a crisis.
-
23:39 - 23:41Kind of, think of the unthinkable,
-
23:42 - 23:47and then act with some foresight
-
23:47 - 23:49when a shock hits you.
-
23:51 - 23:57You have a title for this series
called "Build Back Better." -
23:57 - 24:01I actually would like
to modify it, if I may, -
24:01 - 24:06and I would talk
about "Build Better Before." -
24:07 - 24:12Preparedness, prevention,
pay off big time. -
24:13 - 24:14The second --
-
24:14 - 24:18and not necessarily in priority,
it is as important -- -
24:18 - 24:21is collective action,
-
24:21 - 24:23working together.
-
24:23 - 24:26Seeking help, offering help.
-
24:27 - 24:31Makes a huge difference in an emergency.
-
24:31 - 24:35And the third is something
I learned time and again. -
24:36 - 24:41We don't know our internal strength
-
24:41 - 24:43until we are hit.
-
24:43 - 24:45We are so resilient,
-
24:45 - 24:50we are so able to withstand shocks,
-
24:50 - 24:53especially when we come together,
-
24:53 - 24:58that this always gives me
this sense of optimism -
24:58 - 25:05that, as hard as it is,
we can overcome it. -
25:05 - 25:09From the days when my country
collapsed, the economy collapsed, -
25:09 - 25:11I would get up at four o'clock
in the morning, -
25:11 - 25:14queue to buy milk for my daughter,
-
25:15 - 25:21to the days when I would see
Syrian refugees in terrible situations -
25:21 - 25:23helping each other,
-
25:23 - 25:27to today, when I'm the head of the IMF,
-
25:27 - 25:29that internal strength,
-
25:29 - 25:34our power of resilience,
-
25:34 - 25:36the more we are together,
-
25:36 - 25:39the more it is amplified.
-
25:40 - 25:43CA: Actually, could you talk a bit more
about the role of the IMF, -
25:43 - 25:47especially as we look forward
to trying to recover from this? -
25:47 - 25:50What specifically can your organization do
-
25:50 - 25:51to take us forward?
-
25:52 - 25:56KG: So there are three things
that are quite unique for the IMF, -
25:56 - 26:00and they're really so important
in a time of crisis. -
26:01 - 26:05The first one is to give a good
diagnostic of what is happening -
26:05 - 26:07and what is the way forward.
-
26:08 - 26:10Let me just say, in this crisis,
-
26:10 - 26:12in the very first weeks,
-
26:12 - 26:18we put together, we call it
policy action tracker, for 193 countries. -
26:18 - 26:20What actions are countries taking,
-
26:20 - 26:22how they can learn from each other,
-
26:22 - 26:25so we can be more effective together.
-
26:25 - 26:27We are adding to it, now,
-
26:27 - 26:32actions for responsible reopening
of the economies -
26:32 - 26:34exactly with that purpose.
-
26:34 - 26:36What we are known best for,
-
26:36 - 26:40we are the financial first responder.
-
26:41 - 26:45We are coming in this incredible shock
-
26:45 - 26:50with very significant financial firepower.
-
26:50 - 26:57And what people don't know
is that the Fund has multiple instruments. -
26:57 - 27:01Emergency financing
is the one we doubled for this crisis. -
27:02 - 27:04And it is no conditionalities.
-
27:04 - 27:07We are asking one thing, Chris.
-
27:07 - 27:11Pay your doctors
and your nurses, your hospitals, -
27:11 - 27:14protect your most vulnerable people
and parts of the economy. -
27:14 - 27:16That's it, this is the condition.
-
27:17 - 27:19And the third thing we do at the Fund
-
27:19 - 27:25is to help countries
have the capacity for good policies. -
27:25 - 27:28After the financial crisis,
-
27:28 - 27:31we helped many countries
to have good debt management, -
27:31 - 27:33good fiscal management,
-
27:33 - 27:35transparency and accountability
-
27:35 - 27:39to improve the performance
of public finance. -
27:39 - 27:44So the Fund is not a very big organization
-
27:44 - 27:45by any standard,
-
27:45 - 27:47we are some 3,000 people.
-
27:48 - 27:51Highly professional, incredibly committed.
-
27:52 - 27:57When you use the expression
"all hands on deck," that's us. -
27:58 - 27:59And it is a digital deck,
-
27:59 - 28:01it is a digital deck these days.
-
28:03 - 28:05CA: I mean, this is a global crisis.
-
28:05 - 28:08A lot of people are worried
that unlike perhaps even in 2008, -
28:08 - 28:12where it really did seem
there was a lot of global cooperation, -
28:12 - 28:14there's actually, in some worrying ways,
-
28:14 - 28:16less this time?
-
28:17 - 28:18Are you worried about
-
28:18 - 28:21how crucial is that
to getting us through this? -
28:22 - 28:26KG: I mean, my preoccupation is,
-
28:26 - 28:29in our mandate,
in my area of responsibility, -
28:29 - 28:30bring the membership together.
-
28:30 - 28:33We have almost the whole world,
-
28:33 - 28:36189 countries are our members,
-
28:36 - 28:43and so far, I am very impressed
by how responsive the membership has been. -
28:43 - 28:46I put in front of them in the spring
-
28:46 - 28:49a package, very strong package of measures
-
28:49 - 28:53to expand the role
of the IMF in the crisis. -
28:53 - 28:55Everything that we ask for --
-
28:55 - 28:58we ask for doubling emergency financing,
-
28:58 - 28:59we got it.
-
28:59 - 29:00Very interesting.
-
29:00 - 29:03We ask for tripling
concession of financing. -
29:03 - 29:06Exactly because, you know,
-
29:06 - 29:10like the virus hits people
with a weak system the hardest, -
29:10 - 29:14the crisis hits weak
economies the hardest. -
29:14 - 29:17So we wanted to triple
concession of financing. -
29:17 - 29:21Within one month, we got it.
-
29:21 - 29:24We asked for grants for debt relief,
-
29:24 - 29:26we got it.
-
29:26 - 29:31So what I'm trying to say here
is that we need to focus -
29:31 - 29:35on ways in which we bring
the world together. -
29:36 - 29:39And then act on that.
-
29:39 - 29:43Rather than complaining
-
29:43 - 29:47that maybe not everything
is the way it should be, -
29:47 - 29:50do your duty to the global community.
-
29:51 - 29:53CA: Well, indeed.
-
29:53 - 29:57And the IMF is dependent
on the financing from its members, -
29:57 - 29:58its key members.
-
29:58 - 30:00KG: Yes.
-
30:00 - 30:02CA: I mean, you spoke
of the trillion dollars -
30:02 - 30:06that you are looking to make available
to nations that need it. -
30:06 - 30:08As I read it, that comes from --
-
30:08 - 30:12you've got these units
called Special Drawing Rights. -
30:12 - 30:14You basically draw
a currency from members. -
30:14 - 30:18And hasn't there been pushback,
though, from the US, -
30:18 - 30:22to block that effort
of raising all that money? -
30:23 - 30:29KG: So the one trillion dollars
is from our quotas -
30:29 - 30:34and also from our ability to move money
-
30:34 - 30:40from well-to-do members
from the advanced economies -
30:40 - 30:44and lend it at very low or zero interest
-
30:44 - 30:47to the developing emerging markets.
-
30:47 - 30:49And we had this one trillion
-
30:49 - 30:52and what was very interesting,
not everybody noticed that -- -
30:52 - 30:57the US, in their two trillion
dollars stimulus package, -
30:57 - 31:00included the support for the IMF.
-
31:01 - 31:03The Special Drawing Rights
-
31:03 - 31:05is something that we, indeed,
-
31:05 - 31:10don't have yet consensus
among the membership to do. -
31:10 - 31:16It was done during the 2009 crisis,
-
31:16 - 31:19issuing liquidity,
-
31:19 - 31:21and it goes to everybody.
-
31:22 - 31:24And there are many voices,
including mine -- -
31:24 - 31:27I spoke to the G20 about that --
-
31:27 - 31:30that are saying, well, that may be
a good thing to do now. -
31:31 - 31:35It is not being supported for reasons.
-
31:35 - 31:37It is not just capriciously.
-
31:38 - 31:43The problem with Special Drawing Rights
is that when we issue them, -
31:43 - 31:45they go to all members,
-
31:45 - 31:50and the advanced economies
get 62 percent of the new allocation, -
31:50 - 31:52and there are some that are saying,
-
31:52 - 31:56"Can we think of something
that is more directed, -
31:56 - 31:59or exclusively directed
to those who need it?" -
31:59 - 32:02But, Chris, everything
is on the table for us. -
32:02 - 32:07As the crisis unfolds,
-
32:07 - 32:11we need to do more,
we bring the membership to do more. -
32:13 - 32:14CA: Whitney.
-
32:15 - 32:17WPR: We actually have a question
from the community -
32:17 - 32:20that builds on what
you're discussing right now. -
32:20 - 32:22Yavnika Khanna asks,
-
32:22 - 32:25"Which countries will prove to be
resilient in the Great Transformation: -
32:25 - 32:29those with popular leaders
or those with sound financial systems?" -
32:30 - 32:32KG: You know, they both matter.
-
32:33 - 32:36Countries with strong fundamentals
-
32:36 - 32:40are clearly going through this crisis
-
32:40 - 32:47with less trauma than those
that had weak fundamentals to begin with. -
32:47 - 32:50And of course, leadership matters.
-
32:50 - 32:54How you mobilize a country
for action matters. -
32:55 - 32:59In my view, what we would see
on the other side, -
33:00 - 33:05the winners would be those
who think today of this crisis -
33:06 - 33:08also as an opportunity.
-
33:09 - 33:13Clearly, digital transformation
is a huge opportunity. -
33:14 - 33:19Moving to e-learning, e-government,
-
33:19 - 33:22e-payments, e-commerce,
-
33:22 - 33:26linking small and medium-sized enterprises
-
33:26 - 33:28through digital to consumers,
-
33:28 - 33:30big winner.
-
33:31 - 33:34Secondly, I very much hope
-
33:34 - 33:38that we would come on the other side
-
33:38 - 33:41with a low carbon footprint
-
33:41 - 33:44and a more climate-resilient economy.
-
33:45 - 33:47Those who move in this direction,
-
33:47 - 33:52they would reduce the risk
for themselves and the world. -
33:53 - 33:54From this other crisis,
-
33:54 - 33:57that we are not talking
so much about these days, -
33:57 - 33:59but it hasn't gone anywhere.
-
33:59 - 34:01And you know, if you don't like pandemic,
-
34:01 - 34:06you are not going to like
the climate crisis at all. -
34:06 - 34:09And also, countries that are thinking
-
34:09 - 34:16of how to make the economy in the future
-
34:16 - 34:17a fairer economy.
-
34:17 - 34:19In other words,
-
34:19 - 34:25we have been seeing inequality
building up before this crisis. -
34:26 - 34:30My colleagues
who have researched pandemics -
34:30 - 34:33have a very bitter lesson for us.
-
34:33 - 34:34After pandemics,
-
34:34 - 34:39after H1N1,
-
34:39 - 34:42after SARS, after Zika,
-
34:42 - 34:43inequality goes up.
-
34:45 - 34:49Well, are we going to let
inequality to go up, up, -
34:49 - 34:50after this crisis?
-
34:50 - 34:52And if we do,
-
34:52 - 34:55we are damaging
the fabric of our societies, -
34:55 - 35:01and my sense is that hundreds
of millions of people in this crisis -
35:01 - 35:07would much prefer
to have a simpler, fairer, -
35:07 - 35:10more equitable world to live in,
-
35:10 - 35:13and definitely, a more sustainable world.
-
35:15 - 35:16CA: Mm.
-
35:16 - 35:18KG: Those would be the winners.
-
35:20 - 35:21WPR: Definitely.
-
35:21 - 35:23And just one more question
from our community, -
35:23 - 35:27before turning it back to Chris
for some final questions here. -
35:27 - 35:30You know, this one
is from Sarah Rugheimer. -
35:30 - 35:33And the question is,
-
35:33 - 35:37"What do you see as the main potential
positive shifts / changes -
35:37 - 35:39in this world
-
35:39 - 35:42from this pandemic, say,
two to 10 years from now?" -
35:43 - 35:47KG: Well, I touched upon it a little bit.
-
35:47 - 35:52First, I hope to see fiscal policy
-
35:53 - 35:56to help us recover
-
35:56 - 36:02to be geared towards green recovery
-
36:02 - 36:05and more equitable recovery.
-
36:06 - 36:10And that is something
that is in the hands of policymakers. -
36:10 - 36:12It can be done.
-
36:13 - 36:19Secondly, I very much hope to see us
-
36:19 - 36:23integrating what we have learned
from the crisis, -
36:23 - 36:28in terms of virtual work.
-
36:28 - 36:31My organization, the IMF,
-
36:31 - 36:35well, we can shrink
our carbon footprint dramatically -
36:35 - 36:39just by sustaining the practices
we are developing now, -
36:39 - 36:40and we will.
-
36:41 - 36:46I certainly hope to see, in the future,
-
36:46 - 36:52much more attention to two things
that we saw in this crisis are essential. -
36:53 - 36:56Universal access to health in some form,
-
36:56 - 36:58strong health systems,
-
36:58 - 37:03as well as strong social safety nets,
-
37:03 - 37:08built as automatic stabilizers
in a time of shock. -
37:08 - 37:13And by the way, it is cheaper
if we do it in this way. -
37:13 - 37:18The bill for everyone
is going to be smaller. -
37:20 - 37:26And also, I very much hope
that this notion of investing in people, -
37:26 - 37:31recognizing that now that we see
this horrible tragedy, -
37:31 - 37:33the loss of lives,
-
37:33 - 37:39that investing in people
is the very best investment we can make. -
37:40 - 37:42CA: Mm.
-
37:42 - 37:43WPR: That's great.
-
37:44 - 37:48CA: So, see you again
in a minute, Whitney. -
37:50 - 37:51Kristalina, it's so --
-
37:54 - 37:57It's so inspiring, actually,
hearing the energy and stuff, -
37:57 - 37:59the energy that you're bringing to this.
-
37:59 - 38:02I don't think many people coming into this
-
38:02 - 38:06would have expected to hear,
from the head of the IMF, -
38:06 - 38:08this emphasis on, you know,
-
38:08 - 38:10"Let's solve the climate crisis,
-
38:10 - 38:15let's tackle inequality and injustice."
-
38:16 - 38:19Do you really believe that this moment,
-
38:19 - 38:24this crisis could help lead us
into a great transformation? -
38:24 - 38:27People will feel it's your job
to sound positive, -
38:27 - 38:29you have to do that.
-
38:30 - 38:35Do you really see the path forward
that we can get through this, -
38:35 - 38:39and what sort of timescale
are we talking about here, Kristalina? -
38:40 - 38:45KG: Well, you know, one thing I learned
from the transition I lived through, -
38:45 - 38:48the transition from central
planning to markets, -
38:48 - 38:53is it is tough, it is long, it is painful
-
38:53 - 38:55and it is a road that takes turns.
-
38:55 - 39:01So I don't have an expectation
of miracle from here to there. -
39:01 - 39:07But I genuinely believe that we are now
-
39:07 - 39:10in a point of our history
-
39:10 - 39:15when people demand from their leaders
-
39:15 - 39:18safety and security
-
39:18 - 39:25and a society that is not
torn apart by conflicts. -
39:26 - 39:30And that is actually not unusual to see.
-
39:30 - 39:35So, I would turn the table
a little bit on you, Chris. -
39:36 - 39:37After a war,
-
39:37 - 39:39we see the world coming together
-
39:39 - 39:42and building a better world.
-
39:42 - 39:44Why not after a pandemic?
-
39:45 - 39:48And yes,
-
39:48 - 39:55we can make mistakes and not take
the right road to travel. -
39:56 - 40:03But we certainly have an obligation
to try to get on that road. -
40:04 - 40:06CA: So if you could just inject --
-
40:06 - 40:09KG: And everybody matters for that.
-
40:10 - 40:15CA: So if you could inject one idea
into the mind of everybody, -
40:15 - 40:19or into to the world leaders
who listen to you, -
40:19 - 40:22what would that idea be at this moment?
-
40:24 - 40:25KG: Optimism.
-
40:26 - 40:28Build a better world.
-
40:31 - 40:34Possible, desirable, we must do it.
-
40:38 - 40:40CA: That sounds like
optimism as the stance, -
40:40 - 40:42not just a naive belief
that it will happen, -
40:42 - 40:44but a determination to make it so.
-
40:44 - 40:45That's what you're calling for.
-
40:45 - 40:48To use that as the motivation
to pull us all forward together. -
40:50 - 40:54KG: Chris, do I have one minute,
or I'm done, I need to go? -
40:55 - 41:01CA: If you want to say one last thing
in one minute, alright, go. -
41:01 - 41:02KG: I want to say one thing.
-
41:03 - 41:08To recommend to the audience
to watch the movie -
41:08 - 41:10"Bridge of Spies."
-
41:11 - 41:12There is a part in the movie
-
41:12 - 41:19in which the two main actors,
-
41:19 - 41:24the lawyer and the Russian spy,
talk to each other. -
41:24 - 41:27The lawyer says, "Things are very bad,
it looks like you may hang." -
41:28 - 41:30The spy is very calm.
-
41:30 - 41:32Lawyer says, "Aren't you worried?"
-
41:32 - 41:35The spy answers, "Would it help?"
-
41:36 - 41:40So my message is, it is tough,
-
41:40 - 41:44but worries won't help.
-
41:46 - 41:48Positive action will.
-
41:48 - 41:51Positive, stay positive,
so that's my message. -
41:53 - 41:55CA: Well, I have to say thank you.
-
41:55 - 41:59It's incredibly inspiring, actually,
to see your energy -
41:59 - 42:03and your determined optimism,
let's call it that. -
42:03 - 42:06I think we wish you the very best
-
42:06 - 42:10as you use your position to help
get us out of this mess. -
42:10 - 42:13Thank you so much, Kristalina,
for spending time here at TED. -
42:13 - 42:14Thank you.
-
42:14 - 42:16WPR: Thank you, Kristalina.
- Title:
- How to rebuild the global economy
- Speaker:
- Kristalina Georgieva
- Description:
-
The coronavirus pandemic shattered the global economy. To put the pieces back together, we need to make sure money is going to the countries that need it the most -- and that we rebuild financial systems that are resilient to shocks, says Kristalina Georgieva, managing director of the International Monetary Fund. She takes us inside the massive economic stimulus efforts leading the world toward recovery and renewal and discusses what it will take for countries to emerge from this "great transformation" even stronger than before. (This virtual conversation, hosted by head of TED Chris Anderson and current affairs curator Whitney Pennington Rodgers, was recorded on May 18, 2020.)
- Video Language:
- English
- Team:
- closed TED
- Project:
- TEDTalks
- Duration:
- 42:29
Erin Gregory edited English subtitles for How to rebuild the global economy | ||
Erin Gregory approved English subtitles for How to rebuild the global economy | ||
Erin Gregory edited English subtitles for How to rebuild the global economy | ||
Erin Gregory edited English subtitles for How to rebuild the global economy | ||
Erin Gregory edited English subtitles for How to rebuild the global economy | ||
Krystian Aparta accepted English subtitles for How to rebuild the global economy | ||
Krystian Aparta edited English subtitles for How to rebuild the global economy | ||
Krystian Aparta edited English subtitles for How to rebuild the global economy |