By Julyssa Lopez and James Irwin
Seventy years ago, the International Monetary Fund (IMF) was conceived through a coalition of countries set on reconstructing international payment stability in the aftermath of World War II. Today, the mission remains as critical as ever as countries grapple with how to strengthen the global economy following the recession, financial experts said at last week’s IMF Spring Meetings hosted at the George Washington University.
Thousands of international affairs scholars, policymakers and journalists joined IMF representatives on campus from April 9 to 13 to discuss inequality, emerging technologies and markets, and unemployment. The meetings focused on how individual countries—particularly the United States, one of the IMF’s founding members—can push reforms that will support global economic growth.
GW students had the opportunity to volunteer at several sessions and panels, witnessing the inner-workings of what’s widely considered the most powerful international economic institution. Other seminars and discussions featured GW faculty members known for their research and expertise in financial and international policy.
The IMF tapped GW Professor of Economics and International Affairs James Foster to join “Africa Rising,” a session on the critical topic of economic distribution in African countries. A panel of scholars and economists from the IMF and the World Bank traded perspectives on how to design policies that promote inclusive growth in poverty-stricken areas of the continent. Dr. Foster emphasized the importance of coming up with a universal definition of “inclusive growth” before determining appropriate policies.
Dr. Foster said GW had a meaningful presence at the meetings—one of his Elliott School colleagues, Assistant Professor of Economics and International Affairs Remi Jedwab, had his research discussed in a separate session.
“It raises the profile of the institution dramatically to have professors presenting at the meetings, and also their work being discussed,” Dr. Foster said. “The continued GW representation is a great thing.”
International affairs scholars, policymakers and journalists joined IMF representatives on campus to discuss inequality, emerging technologies and markets, and unemployment.
On Thursday, IMF Managing Director Christine Lagarde joined journalist Charlie Rose at Lisner Auditorium for an interview about the future of the global economy and the goals of the biannual meetings. Ms. Lagarde said she hopes members of the IMF can expand growth at a time when the world is “turning the corner” of the Great Recession.
“They need to talk to each other and explain what more they are going to do, how it’s going to impact their respective economies and how it will affect other economies,” she said.
Ms. Lagarde told Mr. Rose that particular countries will need their own unique types of reform to generate continued growth. While some may need structural changes to their economic institutions, others should address specific issues, like dual labor markets.
Bringing more women into the labor force may alleviate economic strains in some areas. Ms. Lagarde pointed to Japan and Korea, where government leadership has committed to making infrastructure changes that will make it easier for women to access jobs. The IMF has data showing female participation will significantly improve these countries’ economies.
Ms. Lagarde added that she hoped the biannual meetings would address historic IMF reforms proposed at a G-20 Summit in 2010. The proposals would increase the roles and responsibilities of emerging markets and developing countries, but Ms. Lagarde said the United States has stopped progress by failing to ratify the reforms.
“The United States is my biggest shareholder and it does exercise leadership in many situations. When it did, historically, it was quite often helpful. Now we are stuck,” she said.
Former Secretary of State Madeleine Albright was a featured panelist at the IMF's town hall-style forum on Saturday.
Ms. Lagarde emphasized how critical is for the U.S. to uphold its international commitment during a town hall-style panel on Saturday, sponsored by Al Jazeera America and featuring former Secretary of State Madeleine Albright. The panelists addressed a number of financial issues worldwide—including the hampered 2010 agreement. Ratification requires approval by 85 percent of the IMF's voting shares; the United States, the fund’s largest member, owns 16.7 percent of the vote.
Congress has blocked passage, citing concerns the changes would weaken U.S. influence. The White House publicly supports the changes. G-20 financial chiefs have given the United States until the end of the year to ratify.
“'Multilateral' means 'partnership'—everyone helps carry the burden,” former Secretary Albright said. “Bottom line: this has to happen.”
The IMF’s future will be affected by how it addresses a number of interconnected factors, including global economic integration and advances in technology that create a more closely connected world. Even climate change, Ms. Lagarde said, is a factor. In 2009 and again in 2012, a group of 20 IMF economies began tackling the issue of fossil fuel subsidies, which can hinder governments’ efforts to reduce budget deficits.
Some of these challenges present scenarios IMF founders likely didn’t imagine in 1944, but the way they structured the organization’s governing documents could provide the flexibility for contemporary solutions.
“Those founding father were visionaries,” Ms. Lagarde said. “They defined Article One in a way that could adapt over time.”