How to rebuild the global economy | Kristalina Georgieva



Given below is the summary of the above video:

  1. Kristalina Georgieva is the Director of IMF since 1st October, 2019. One of the jobs of the IMF is to provide funds to weaker countries, particularly at times of crisis like today, at low-interest rates by raising funds through its key members(rich countries).

  1. In January, the IMF had predicted positive growth in income per capita of 160 countries and now they predict negative growth in income per capita of 170 countries.

  1. According to her massive capital stimulus is absolutely necessary at this time but accountability to taxpayers should also not be overlooked.

  1. She predicts interest rates to remain low.

  1. Due to the coordination between IMF, the World Bank, G20 and other institutions, debt moratoriums have been provided to the poor countries so that they don't suffocate under their debt burdens during this time when their economies are standing still.

  1. She's not worried about the possibility of inflation due to large fiscal stimulus in advanced countries and the majority of emerging countries as the demand has not increased aggressively unlike what happened after World War 2. However, inflation can be a problem in poor countries who have weak fundamentals and don't have easy access to foreign exchange.

  1. She talks about the importance of having solidarity in the society during these times of crisis and being vocal to spread this positivity.

  1. About the role of the IMF in these times, she highlights 3 key roles:
a) Giving a good diagnostic to the countries about what is happening and what's going to happen and then suggesting them the actions to take.

b) Providing financial help to countries via multiple instruments e.g. Emergency Finance Inc, which has been doubled recently, is one such instrument which has only one condition i.e. the funds should be used for better healthcare facilities and for the upliftment of the most vulnerable part of the society.

c) Helping countries during policy formulation to have good debt management, improving transparency and accountability in public spending.

  1. She thinks that it will be challenging to stop inequality in the society from increasing once the world recovers from the Corona pandemic as that's exactly what had happened in all the previous pandemics. But she also sees it as a very big opportunity for the countries to reduce their carbon footprint, develop an equitable society and improve the healthcare system.

  1. In the end, her message was to be positive and to take positive actions. She also recommends watching the movie 'Bridge of Spies'.

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