IMF Chief Shares 3 Steps to Boost Economic Growth
TEMPO.CO, Nusa Dua - The International Monetary Fund (IMF) managing director, Christine Lagarde, said that global trade could encourage economic growth for all. However, she said that building a good trading system to encourage economic growth is not an easy task, and therefore, she mentioned three priorities in a discussion in Bali.
"Today’s generation of policymakers will be measured by their ability to help create a lasting bond of union and friendship, a trade system that works for all,” Lagarde said at the opening speech in the discussion about 'How Global Trade Can Promote Growth for All' in Nusa Dua, Bali, Wednesday, October 10.
Lagarde said the first thing to do was to de-escalate the trade disputes. She asked the policymakers to see a great potential through new trade agreements and transactions, such as the TPP-11 and the African agreement, also the progress made on the US-Mexico-Canada agreement. "So, let us use that momentum to turn tension into rapprochement,” she said.
Secondly, everyone has to work together to improve and modernize the global trading system, not to destroy it. It means that it is necessary to improve the enforcement of intellectual property rights while ensuring effective competition to avoid the excesses of market dominations.
In addition, unlocking the full potential of e-commerce and other tradeable services, such as using more flexible negotiating approaches within the WTO.
The third, Lagarde went on, everyone needs to implement domestic policies to ensure that global trade is more effective in delivering for all people. The method was proven to be effective in creating the world's largest middle classes, as happened in Asia.
Meanwhile, economic integration has boosted per capita incomes while creating millions of new jobs with higher wages around the globe.
However, "we also know that some workers, and some communities, are heavily affected by the human cost of disruption; whether from technology, or trade, or a combination of both," she added.
Based on these reasons, Lagarde remarked that the IMF needed more effective domestic policies, including leveled-up investment in training and social safety nets. Because the IMF cannot do it without the help of all parties.
DIAS PRASONGKO | LA