WASHINGTON – The world economic elite, meeting this week at the International Monetary Fund’s annual assembly, closed the gathering on the weekend with a firm defense of globalization and openness to trade against the growing threat of protectionism or populism.
“The first priority for inclusive growth is to escape the ‘new mediocre’ of low growth, low employment, and low wages. That means using all policy tools – monetary, fiscal, and structural: to maximize the synergies within countries – and amplify the impact though coordination across countries,” IMF chief Christine Lagarde said.
Lagarde insisted that the drop in world trade is one of the reasons for the fragile international outlook, and she affirmed that trade is one of the economic engines that must be revitalized.
During the meeting, attended by the economy ministers, central bankers and experts from the IMF’s 188 member countries, officials expressed a marked concern for the mistrust of the benefits of global trade evidenced in the presidential election campaign in the United States, the world’s largest economy.
In an interview with EFE at the annual assembly, Lagarde said that there is concern about the anti-trade rhetoric being heard in the U.S. presidential campaign, adding that there is no doubt that it could damage that engine for growth.
In addition to the protectionist tone in the U.S. elections, the recent vote in the United Kingdom to leave the European Union – known as the “Brexit” vote – has caused alarm bells to ring in world financial centers.
It is perhaps for that reason that the IMF has expanded the focus of its analysis, which has been traditionally focused on macroeconomic stability and growth, to include calls for the need to fight economic inequality and the negative consequences of globalization.
In her speeches over the past week at the meeting, Lagarde, the former French finance minister, repeatedly emphasized that growth has been “too low” for “too long,” immediately thereafter adding that it has benefited too few people around the world.
The words of the IMF chief – which were seconded by World Bank president Jim Yong Kim, who said that without a significant push for more world trade the aim of significantly reducing poverty cannot be reached – were well received by activists and non-governmental organizations.