IMF Director Christine Lagarde on The G20 and the global economy | LIVE STREAM

good afternoon ladies and gentlemen my name is Arthur Brooks I'm president of the American Enterprise Institute and I'm honored to welcome you to this event today featuring iMF Managing Director Christine Lagarde as well as my colleague Desmond Lachman in a conversation about what we're experiencing today in the world economy the advantages that we see the problems on the horizon and to get a little bit of what is in Madame Lagarde crystal ball about the coming months and years many of you are as conversant as I am or more in Madame Lagarde is incredible background as you all know she's been managing director of the IMF since 2011 widely considered to be one of the sharpest minds and financial policy matters and public policy in general she started much earlier in her career as the head of the Chicago Law Firm Baker & McKenzie and then was Minister of Finance of France before joining the IMF Janet Yellen once remarked a remark with which I concurred that Christine Lagarde is unique in combining vision with action before I turn it over to Madame Lagarde and Desmond Lachman I just want to say one moment why I admire her so much and I'm so delighted that she's with us here today many of you know that the American Enterprise Institute this institution which has been around since 1938 is dedicated fundamentally to to moral principles not policy principles not financial principles but moral principles that human dignity is radically equal between all people with no exceptions and that human beings have limitless potential if only we can find it these are ideas moral ideals that can be animated and brought to life on our best days with good public policy but we need leaders in the front line that believe in this fundamental philosophy as well policy ideas are simply not enough the best policy leader I know who shares these views is Christine Lagarde it's interesting in the world today of dramatic political and ideological polarization that it seems that in the United States and other countries including France either you're on Team markets or team welfare that's a false dichotomy it's false choice it's a bad choice because it's not one that we need to make the truth of the matter is that Democratic capitalism has pulled 2 billion of our brothers and sisters out of poverty since 1970 and one of the greatest blessings that Democratic capitalism has and has created is our ability to look after our brothers and sisters in need with social safety nets with welfare programs indeed with systems that involve redistribution it's not one or the other it's a creative approach to how we build the fabric of public policy remembering the people at the margins of society no institution has been more explicitly dedicated to this in the International Monetary Fund lifting up nations such that they can serve their citizens looking out for the people at the periphery of our society and we need moral leaders at the helm institutions like the IMF and we have that and Matt I'm Christine Lagarde I am so honored to have her here today sharing our principles and sharing her wisdom with us Managing Director Christine Lagarde and Desmond Lachman well I'd like to welcome everybody as well and I'd want to say a special thank you to madam of God for coming and visiting us again she's always welcome here and at this time around she's coming at a very opportune time just before the g20 meeting in Japan and at a time that the global economy has got many challenges so maybe if we start you know if you could give us you know some indication of how you see the global economy right now in April this yeah at the spring meetings you noted that while the economy the global economy was having a synchronized recovery in 2018 it was now running into a delicate moment you know and I wonder how you see things two months later well thank you so much Desmond and thank you very much Arthur for this extremely flattering introduction but yes the moral principles that you've referred to I certainly abide by them and respect them highly you know it's not without a little bit of anxiety and some trepidation that at the last spring meeting in April we actually coined the world economic outlook as we presented it as a fragile and with a precarious recovery in sight so the test of that description is really what happens after we made the forecast and we were in a way quite pleased and not very happy but quite pleased to see that this fragility that we had identified and the precariousness of the recovery is actually confirmed and the the 3.3 percent global growth that we forecasted for 2019 we are maintaining our certainly this forecast and it's a downgrade by 0.4 relative to our forecast of October 2018 so gives you an indication of this fragility that we identified because we downgraded and also because as opposed to the 70% synchronized pick up that we had seen in 2017 and the first half of 2018 we're now seeing this sort of synchronized deceleration of growth which is shared by about 70% of total total GDP around the world so that fragility is still the same it's a little bit differently distributed than what we had assumed so most recently the results for the US economy have have been slightly better than what we had anticipated slightly better also the Europe Union but on the other hand some of the emerging market economies have been lower than we had thought Japan is a bit of an outlier in in delivering pretty good and solid results at the moment precarious recovery it certainly is the case and we are seeing risks to the downside and some of the risks that we had identified back a couple of months ago have actually begun materializing you know one of the risks that we had identified is the risks associated with trade tensions and two months ago we said be very careful what you are doing with this major growth engine that is trade because anything that breaks on trade such as tariffs such as non-tariff barriers is going to actually be a break on growth and unfortunately we're seeing some materialization of these risks that we had identified a few months ago there are a few other risks that we that are in the making which are not necessarily materializing so to speak but breaks it is certainly a risk on the horizon for which additional time has been given to the parties so everybody has now until October to actually come to terms with the the the actual exit and the way in which exit will will take place but it is still a risk that you know bears as a downside one so we see the recovery that we are still forecasting for the end of 2019 and 2020 because we have a forecast of 3.6 percent for 2020 we see that as still in the cards but precarious so that's that's pretty much where we are thank you I guess though that the downside risks in some sense have got more serious you know in that what I'm thinking about is that we're now getting a intensification in the us-china trade dispute and that's now been to Mexico and there's a threat a little bit down the road you know that the US postponed for six months introducing tariffs on European and Japanese automobiles 25% tariff you know that's got to be a rather major risk at the g20 meeting presumably that's going to be a principal topic of discussion you know my suspicion is that under Japanese presidency the g20 meeting of the finance ministers and central bank governors will address the issue of trade I mean I don't see how they could leave that to the side it's it's a real topic in the blog that I have released today which borrows very much from the g20 surveillance note that has been prepared for the the finance ministers and central bank governors what we tried to do is to actually try to model and figure out what will be the impact on growth of what had been announced and is being implemented and what is now being threatened in addition to what what took place and if you combine the two and you aggregate what is already in place and what will impact trade only dealing with China you know let alone Mexico which which is a more recent development and we which we have not included in that particular surveillance note that alone would shave off the forecast that we have by 0.5% now you might say 0.5% if you are you know a country that is growing at a steady pace and some of the sub serían countries or even in China is not a huge amount but if you look at global growth at three point three percent this year and most of next year three point six percent you take off point five in 2020 which is when we have calculated the impact of the trade restrictions you're not talking about three point one percent absent special you know fiscal stimulus or monetary stimulus off of some sorts that would be put in place if country are very concerned about the impact off of the trade restrictions so it's it's a significant impact and one that is in the making because you have China you have what has been announced as you know potentially implementable soon on Mexico you have the six months suspension which might lead to believe a contrary you that in six months time burying other developments it will materialize you have the elimination of the preferential tariffs on India which only impacts a very small portion of trade with India but which is a signal that nothing is warranted so you know when we try to analyze from an economic point of view the impact of those trade restrictions we actually aggregate several impacts you have the direct impact of trade which is not gigantic and then you have the market impact and then you add the confidence impact which clearly has a bearing on investment and and future decisions of economic characters yeah I can agree with you totally you know that the impact could be enormous because we've just got to think what happened in November and December when the us-china trade talks weren't going well we saw markets slump by like 20 percent so the impact it seems to me that the trade issue there really are playing with fire you know that this could really derail the global recovery though through the financial market Channel but hopefully we don't we don't get there I hope we don't because I just say that one of the big differences it stopped me if I speak to if I talk too much but what one of the big differences between now and say you know when we had the last big financial crisis is that the space that is available to policy makers has been significantly reduced you look at the the monetary policy and the space that central banks around the world have not much really not much and and they have played out many of the tools available in unconventional monetary policies you look at the fiscal position of many countries despite many iterations reiteration contradictions and all the rest of it on those those matters many countries do not have any space some countries have a little bit of fiscal space and you count on the fingers on one of one hand those countries that have a lot of fiscal space yeah well I guess that is one of my concerns is that the largest country in the world has used its fiscal space at a time that the recovery was very strong you know so when the recovery gets weak it's going to have limited fiscal space but I guess another reason for concern about this crazy issue is that as from playing out in isolation you know you mentioned brakes it did you know that we could have a hard brakes that we just had a bad European parliamentary election results in the United Kingdom that looks like it's pushing towards a difficult situation in October but then there's also issues like the Italian government in the latest election that they seem to be going down the path of rather irresponsible fiscal policies so I guess we're just not looking at this playing in isolation you know which is I guess increases the urgency of your trying to resolve this you know that this is no time to be opening up another front you know on the trade side correct and and you know in in in many ways those particularly on on trade those are self-inflicted wounds and it's you know politics aside on frankly it's frustrating because we had seen in the post-crisis period trade decline gradually over the course of time when before that it was double the global growth rate and it was beginning to come up again and to rise you know but to two points above global growth rate and if you look at the WTO numbers if you look at the the bank numbers our numbers as well we have indications now that trade is slowing down yet again and and and yes that that is a frustration and we don't need to do that there are issues they have to be addressed the W system the WTO system needs to be improved re-energized in many ways the dispute resolution system needs to be fixed and needs to be functional but we don't have to inflict words to ourselves and it's you know it's but we're not going to leave many winners right I guess you know what one could say is that if the whole idea of trade restrictions is to try to reduce external imbalances you know for instance if you take the United States if trade restrictions are to try to reduce the external balance that's not what's going to do it that what's going to do it is sound fiscal policies that the United States needs to save more and the Europeans Germany perhaps needs to save less Germany needs to have an expensive fiscal policy the United States needs to have a restrictive fiscal policy what role do you see for the IMF in trying to get that conversation going you know that in past years you had multilateral surveillance to try to get a better balance between the various countries reduce the ones the deficits of ones who had large deficits and similarly on the surplus side is there much scope there is in that we produce every year something that we call the external sector report which is informed by many many many data and and which has the benefit contrary to the sort of bilateral comparison that you are referring to or the current account assessment on a bilateral basis which brings all comes all systemic and critical countries together to arrive at an overall system where we determine whether or not the situation of a country and particularly the situation of its exchange rate relative to its position is actually in line or whether it is not in line with the fundamentals of the economies what the Japanese president of the Japanese presidency of the g20 has done is ask us the the IMF to produce a special report on this issue of the imbalances around the world and and we are producing that report for the g20 at the Japanese presidency request what's interesting in the report is that post crisis we have seen the imbalances shrink if you if you think of China back in the immediate pre-crisis period and you look at China's current account position at the moment massive difference it's gone from an you know eight nine percent surplus to a very minimal surplus now so emerging market economies have essentially shifted their position to being almost balanced and and where we see now so that has shifted but imbalances have not disappeared they've shifted from being within the emerging market economies predominantly to being within the advanced economies and between advanced economies so when you look at the u.s. situation as you just indicated strong deficit if you look at the German position strong surplus and and and has been growing although it's beginning now to decline because the investment of Germany has now started picking up a bit so I think the other the sort of I hope that the collective wisdom of the of the g20 under Japanese presidency will be to look at those numbers to look at the facts to look at the causes of those imbalances and there are some legitimate causes when when a country is aging when the population is saving then it's it's obvious that it's going to you know deliver a surplus but it doesn't explain and justify some of the surpluses that we observe at the moment a lot of the problem is in the area of public finances I guess you know that countries that are running big deficits on the trade side are also running big deficits on the budget side and it seems that it's not very logical that if they're running big budget deficits what that tends to do is attempts to force the dollar higher you know which is also counterproductive so not only are they saving this but they're having a strong dollar you know so it just seems at least to me it seems I guess I've got more Liberty to say this than you do but it seems rather misguided to have a tariff policy to cure this problem you know that if you're running a big budget deficit the United States has had the experience of twin deficits before you know it looks like we're going down that path you know that over the past two years the deficits been increasing rather then they're narrowing let me ask quite a different question you know we mentioned breaks it could be a problem I mentioned that Italy you know could be a problem why don't with you could tell me tell us going forward what kind of role would the IMF play in resolution of a problem you know say within the eurozone you know you could argue that in 2010 Europe wasn't equipped to deal with these kind of crises but since then they've established the European Stability Mechanism the ECB's got the outright monetary transaction window my question is would the role of the fund be different you know would we be seeing the fund working with a troika or you know is that something of the past that the fund might still be involved but it would be a different kind of involvement you know if I look back and you know I started that that period of financial crisis as a finance minister as as a player at the Euro group table and then I shifted to to the IMF in 2011 if something of a similar nature was to happen now if there was a euro area sovereign debt crisis for instance god forbid because it those were not happy days and I really hope that it doesn't happen again but for the purpose of our discussion here if it was to happen it's it's different world it's a different world where as you said the ECB has explored various mechanisms and tools that it could use again some of which have not yet been totally explored but I'm sure Mario and his successor would be able to use that second there is the European Stability Mechanism which is endowed with over you know 500 billion euros which was not available at the time of the you know Irish Greek Cypriot Spanish crisis and and a few others so that's also a huge big buffer that is there and that could be called upon if a bank was in a very difficult situation because they've ever they've allowed for that to operate as a backstop under certain conditions so that's one not to say that the sort of incestuous loop between banks and sovereign has been completely severe that's not happened yet and I think that's sort of mission to be completed there is a resolution mechanism that has been negotiated agreed upon and which is enforceable in all the system in banks in in Europe so you there are tools there that could be used I think that both the IMF and the ECB would if they were asked to intervene and to help would would operate in a different capacity I don't want to speak for the ECB because they're they're big boys and they can do that for themselves but for us I think that we would be working hand in hand with the ESM if the countries wanted us to do that we you know we have a membership of 189 countries the euro area as such is not a member of the IMF but each and every 18 members of the IMF sorry 18 members of the Euro group is a member of the IMF so we we might again help if if it was needed but my guess is that the Europeans who have built this yes and would want to call on the ESM to be the sort of first line of defense and I'm not sure that we would use the concept of concept of troika anymore because the troika was the Commissioner European Commission the European Central Bank and us I think it would it would work differently and they're trying to build fiscal capacity within the ESM as well in order to build up expertise but the big difference now is that the Europeans wouldn't be as dependent on the IMF financial resources as they were before because presumably the European Stability Mechanism has the 500 billion dollars but more importantly the ECB has got an unlimited amount of euros that they could use you know that the MT is pretty open-ended well yes and and you might argue that thanks to the the European Court of Justice and the various recorded recourses and the various actions that were taken against some of the decisions made by the European Central Bank the European Central Bank board and and its president will know within which parameters it can operate and and with what prior consent prior consultation and so on and so forth so there is there is more more room is it is it unlimited in the in the way the Fed could be I think you need to us I guess Mario Draghi before he goes well I guess I guess I was just thinking of his comment is that he would do whatever it took you know what I guess had better oh no no we had a big discussion on that because he said you're right he said that that was the day when the London Olympics started we had that same day of conference and he said because we debated that he said within my mandate and it was critically important particularly if it's Aviv I think the Bundesbank and the wooden Bundestag were very concerned that the within our mandate there was sort of or true I don't think the market that saw that they just saw whatever took and you know I just wonder whether you might not use that technique in the next crisis I'll do whatever it takes it seems to work magic let me ask you in terms of IMF resources what is the situation with IMF resources you know in the following sense you know if we were to have another crisis you know it seems that these crises take quite a lot of money to resolve you know so if you did get for any reason a crisis it's the IMF adequately financed or is the more that you need to do on that front there's always more than I would that I would like to do but let me give you two numbers our capacity to commit at the moment is roughly one trillion dollars so with the reserves and everything else we have roughly one trillion dollars that is available and that we can mobilize in order to help countries around the world the second number that I want to give you is 500 billion dollars and the 500 billion dollars is how much we actually committed during the great financial crisis so when we had this this massive financial crisis short of a Great Depression we committed 500 billion dollars and I think we were instrumental together with many others in in trying to avoid that the Great Recession turned into a Great Depression so how did we do that at the time of the great financial crisis we had and you know in in the structure of the resources we had quotas which is a bit like you know hard capital and there were new arrangements to borrows that I would represent for myself as sort of syndicated medium to long term loans and some of those were actually converted into quotas over the course of what we call the 14th review which is like a capital increase but the borrowing which is done much more easily was increased and some of the borrowing was put into quota what I want to make sure happens because we are reviewing our capitals status and our resources envelope is to maintain our overall resource anvil op' and short of increasing the quotas now what I want to do is increase this syndicated loans the new arrangements to borrow as it's called for those who are in the know here so that the total capacity to commit remains at a trillion dollars because you never know the next crisis can be worse than the last one so we need to be to be sufficiently strong and I think we need to give markets the signal that the fund is going to be equally strong on the occasion of this capital and borrowing reviews so that's that's I guess one way underway I guess one area that might give you some room is that just what we've been discussing about Europe is that this time around Europe can take care of a lot of its own needs you know whereas presumably lost time around you know the big IMF programs when places like Greece and Portugal and Ireland presumably this time you're going to have the ESM and the OMT that can help you know so perhaps you might have some room that you didn't have in their previous yeah fair enough I think the the global financial safety net as we like to call it has changed no question about that because the European Stability Mechanism is one big pocket of financial availability that is there only for European countries but you also have in various corners of the world in Asia for instance you have the Chennai arrangement under which countries of Asia Pacific sort of full description of the countries in there have also aggregated resources for the baton for the rainy days so they have funds that is available as well under which we have a close collaboration and which we have sort of stress tested in order to make sure that if something happens the Chennai arrangement which I think has two hundred and fifty billion dollars available and us can actually operate together in an efficient way and then you have a few other sort of pockets of financial resources that are available as well that could be mobilized eventually I think what the g20 leaders are all saying is the IMF is at the center of the global financial safety net and we have to play a critical role because we've been doing that for 75 years this year it's our anniversary actually and and we have accumulated you know experience expertise we know how conditionalities can fall don't always do it to perfection but we we have tried as hard as we could to improve it and have a recovery rating which is not bad right well I guess that's another reason why one would want the these various trade disputes resolved because this really doesn't create the right kind of atmosphere for International Cooperation or the United States has had such a role of leadership of resolving crises working with the IMF so hopefully that gets resolved pretty soon this morning you put out a blog in which one of the factors you mentioned that is of some concern is the big increase in corporate ordering you know that it seems you know the United States not only in the United States but I guess the emerging market economies that their corporations have been borrowing a lot and that what we're seeing is we're seeing a deterioration in the credit quality you know I think that mrs. Ellyn keeps mentioning you know the United States leveraged loan market of something like 1.3 trillion dollars aside from having a concern there's not much that we can do at this stage you know that seems to be a problem that we've got to live with you know that that's the result of past policies all whether there's some kind of policy prescriptions you had in mind I think it's a problem that is not only a problem in the United States the the corporate the corporate debt is prevalent pretty much across the board in all countries and what what is of you know additional concern to us is the quality of that of that debt which we see as having declined here as having declined in Europe as well in in in many of the countries comprising comprising Europe clearly in a period of a cumulative monetary policy as we have it and as we will probably continue to have it and legitimately so in our view until numbers actually firm up and we see inflation had a bit more we are seeing an accumulation of financial vulnerabilities that's what we're saying also in the the g20 surveillance note so thought of using monetary policy because we have no inflation because we have rather sluggish growth then other tools need to be used and that's where macro-prudential tools have also been developed elaborated with I don't think that we have enough history of the impact of macro-prudential tools to actually say well this works this you should use the kind of collaterals that are used in those leverage loans should be transferred or changed but it's I think it's it's coming along and then many more central bank governors now who are you know comparing notes and looking at prudential tools to see what what is effectively working and we're beginning to see good signals but that has to be you know financial stability has to be a concern which should not necessarily interfere with the monetary policy and which requires in our view an additional set of tools the prudential tools I guess I just finished before I turn you know you couldn't use the remaining time that we've got for questions from the audience just questions on the emerging market economies one the program in Argentina has had its problems I was just wondering how you see that right now you know are they getting things back on track that would be the one question and the other is there two economies that seem to have real difficulty real crises on the currency side that could have big impacts on the economy the one of course is Venezuela and the other is Turkey and you know it's just wondering whether their scope or at what stage can the fund get involved with those two countries well first of all we we have to be asked and that's a big precondition because if the authorities of a country do not want to ask the IMF to be involved no matter how we regret Lamont and and and feel terribly sorry for the people in some instances that is certainly the case for Venezuela there's not much that we can do all we can do is prepare as much as we can on the basis of numbers that we have no control over an economic situation that we have not been able to audit for the last 15 years because we have been barred from accessing you know the normal delivering the normal mission that we that we have with all old numbers so all we can do is from a distance and based on sporadic information and contacts that we have with a few people who still on the ground is try to assess what in our view based on what we've seen is likely to be just the most difficult protracted and complicated economic situation that we have seen and not just economic because you have a humanitarian crisis you have a food crisis you have a currency crisis you have inflation which is in the in the millions percent and and you and the debt situation which is extremely complex as well so you have to bring this all together it's like having you know you take the three worst cases of crisis resolution that we have ever handled in the history of the IMF you bring them all together and that is Venezuela it's like a war situation oh it's it's yeah it's it's it's really a turkey mess and we don't have the data we don't have the tools we don't know we have not seen it in real in real life other than them through the prism of the humanitarian crisis that that is playing out turkey must be more that something can be done well I hope the authorities can actually handle the situation and can can they have a teeny tiny bit of fiscal space they have a private sector that is massively indebted they have inflation running high they have a currency situation which is which is also pretty dear and I I don't think that President Erdogan would would actually pick up the phone to ask me whether the IMF can come and help but this would be a classic case for the IMF to do something yes what I understand but takes two to tango yeah right which takes us to our Janina okay that was a I had thought of that segue you know in the case of Argentina first of all I'm reasonably and hopefully positive about the most recent developments it's it's it's an economic situation which was incredibly complicated as well that I think many many players ourselves included underestimated a bit when we when we started trying to help and put together with you know with the Argentine authorities a program to address what had been critical for the economy which was the fiscal position which was the current account position on both those accounts the situation has significantly improved and is continuing to show signs of improvement the the I guess the the the most surprising component but which is improving now and the more in the most recent numbers that we received is inflation which instead of stabilizing and gradually declining as as we had anticipated is showing much more resilience than we had thought it is now beginning to decline but it is it's it's taking longer than we had we had anticipated you know I'm hopeful that with a steady continuation of the program as it is with the monetary mass as the anchor of the program as it is now I'm really hoping that the Argentine program will actually turn out to be successful for the Argentine people and for the Argentine economy there are political you know developments that will will come into play over which we have no control of course and which will be the decision of the other people but from an economic point of view very hard legacy inherited by the previous team difficult situation to address from all angles you know fiscal current account inflation and and the issue of the exchange rate which is like the barometer for the people but my hope is that you know keeping steady and there's deliver the Macri government is very committed to the program oh yes they are yeah yeah yeah well that's what that's yes with your permission if we let's just turn it over to questions I think that what we'll do is just take like three questions at a time and if I turn to you if you could just identify yourself and perhaps please keep it to a question rather than a statement this gentleman over here yeah hi carl galavan historically constitutionally gold and silver coin were the money in the u.s. and their circulation provided great stability for the working people of course the velocity at which gold could move through the economy was a limiting constraining factor with new blockchain and wireless technology is it possible for yet to be gold that to be romana ties and circulate and exchanged in the economy digitally and serve as an honest money I guess that question was directed at me I'm originally South African and the on stage go for gold no no okay hi thank you marked any mathematical finance company um one of the issues with the protectionism by the US is it's hard for us to sell insurance services to Africa because they don't have the risk regulatory framework mark Greene talked here from US aid and his people Thomas Ward said that American insurance companies can't sell into Africa because they don't have the risk regulation setups of Prudential wants to sell their the state of New Jersey would have to do it Paul coupie Akkad a IAE I is agreed to set up a relationship with actual groups in the US and some of the actuaries in South Africa were here a couple weeks ago and they would like to be part of a project to set up a regulatory systems for countries in Africa near South Africa could you come to the question so the question is would you be willing to become part of this dialogue that Paul Kupiec today I is part of of talking to actual groups in the US and South Africa you know with the IMF to develop a capacity to help set up regulatory risk systems for insurance in developing in emerging countries thank you Robert shredder with international investor Madame Lagarde is it possible that the multilateral community has relied too much on trade as the primary engine to for developing countries to develop their economies to the exclusion of other forms of development that perhaps should receive more attention I would just take one more Barry would RTHK and honk on mr. guard you've attended most of the g20 meetings it's their ninth year I think how should this forum be strengthened we know its strengths but other shortcomings for example I see there 50 60 people in the room is that too many the role of gold and silver and how it can be associated with distributes and ledger technology it's something that we have not explored but certainly we are very very keen to explore distributed ledger technology for all sorts of purposes particularly in the FinTech world and when it comes to accelerating cross-border payment when it comes to remittances when it comes to a lot of the transactions that are being conducted at significant cost and with great length of time we believe that that technology can be of great use much more I think there is much more interest in in that technology now separate and independent from you know the bitcoins and the a theorem and the all the rest of them now I think the IMF card would would actually argue that we sort of going back to fixed exchange rate and the sort of guarantee of gold or silver whatever would actually reduce the flexibility and the sort of shock absorbing capacity that flexible exchange rate have demonstrated over the course of time and with a financial crisis as as they went but you know it although ideas have to be explored and I think we are we should be open to to ideas whatever they are American insurance in South Africa we have a South African desk at the IMF and clearly we do not operate at all ever at the request of any particular groups any particular segments of the business this is that this is not our mandate this is not our mission we act at the request of countries and we provide either policy guidance surveillance technical assistance training and what have you if South Africa was interested in you know having technical assistance to elaborate a better regulatory framework for insurance distribution development or whatever we would we would you know certainly consider whether we can best do that or whether the World Bank is not better qualified than we are but it sits in that relationship between a member and the institution that that could eventually be conducted have we relied too much on the militant lateral system or as the multilateral system rather relied too much on on trade to the explosion of other mechanisms you know when you look back and when you see how much has been improved Thanks in particular but not to the exclusion of others to trade I don't think that we should have too many regrets should it be to the exclusion of other channels of development absolutely not and and you know I think that the summit that took place in Addis Abeba for instance was it now four years ago when sub-saharan African countries and particularly decided to explore how they could develop how they could reach the sustainable development goals and concluded to the fact that it was not going to be just about trade it was not going to be just about aid it was not going to be just about international institutions but it was also going to be about they own economic development and their own domestic revenue Bizet ssin and having control over their destiny I think all tools have to be used and and not to the detriment of others but I think trade will continue to play a significant role and it's not actually randomly that all sub-saharan African countries have now concluded a pan-african free trade agreement which has just recently entered into effect because it was finally ratified by the required number of countries and we are clearly there is a big upside to be had among sub-saharan African countries in order to develop the activities when you look at the volume of trade regionally between sub-saharan African countries relative to the volume of trade that they have off on their raw materials and commodities with advanced economies there's a huge upside to be had locally as there would be a huge upside in developing and trading services in a less constricted and less constrained way g20 are there too many people in the room you know you're right I have I have attended I think all g20 leaders summit ever since the crisis and there were no g20 leaders summit before the crisis so I think I've attended them all and I would concur with many observers who will say that it's never as efficient as when there is a crisis because crisis you know bring about a sense of urgency a sense of cohesion and need for cooperation that is you know an unparallel tool for achieving results same happened with the construction of the European Union and what I would have said that he would have said Europe will develop one crisis at a time and through crisis so to many people you know and I'll give you my personal view it's not an IMF Orthodox proper view it's my view I think the problem of the g20 at leaders levels is that because it goes from one presidency to the other each new presidency feels committed and obliged visibly the previous presidencies to sort of take over the legacy and say I don't know the young you know Japan for instance was it was very focused and concerned about population about aging about demographics well I bet you that I don't know but I bet you that Saudi Arabia which is the next g20 presidency will probably as a courtesy to Japan and out of politeness and respect for Japan will say we will continue looking at demographics and aging and probably look they will be looking at it from the other perspective of this youth population that is coming to markets and that needs jobs whereas Japan was looking at it from the other end of the lifecycle but each new presidency wants to have its own pet topic so over the course of ten years you have at least ten pet topics which have been carried over from one presidency to the other and sometimes it's actually healthy when one member says let's be sensible let's just wipe out some of those that we have examined to death and let's just shorten the list of topics that we are going to be concerned focused about and where we're going to be active the lots of things that you know the g20 has achieved recently if you look at the determination of the g20 to fight against tax evasion and profit base it's not shifting it's the best base erosion profit shifting there has been significant progress you know the automatic exchange of information in order to fight those those two phenomenon I think on corruption I hope we're going to be able to also make some some progress going forward in infrastructure there is a hub that was set up under Australian presidency which has been taken over by the two successive presidency and which is now delivering set of best practices best tools in order to develop infrastructure in a more coherent and effective way so I think it's it's delivering value probably not as visible or nor as much as when we have the crisis and of the 60 people in the room you have a good group of them who are generally sitting in the second or the third row who are effectively doing the work so you need them in the room thank you very much Madame Lagarde you've been extremely generous with your time and you've been ready thank and open with us already appreciate it I would just ask if people can remain seated while Madame Lagarde leaves the room but before that I'd ask you to join me in just thank you [Applause]


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