At the United Nations General Assembly (UNGA) in New York City, International Monetary Fund (IMF) Managing Director Christine Lagarde highlighted how the fund is expanding its support for developing countries. The poorest countries can now borrow 50 percent more from the fund’s interest-free facilities and the IMF is strengthening its technical support to help countries boost domestic revenue mobilization to finance development spending.
“We are doing that together with the World Bank, and the fund is intensifying its support for fragile and conflict-afflicted states,” she added.
Importantly, she said, the fund is maintaining, for the longer term, the zero interest rate on its Rapid Credit Facility loans.
Lagarde was addressing the UNGA on the united action she says is needed to make the Post-2015 Development Agenda more than just ambition. In her address, titled “The Post-2015 Development Agenda: Unity in Ambition, Unity in Action”, Lagarde highlighted macroeconomic stability, which she called “a prerequisite for a sustainable economy — but not sufficient on its own”.
“While priorities vary across countries, structural reforms and efforts to diversify the economy are often required. Equally, revenue mobilization and efficient, effective public spending — including investment — will be key,” she said.
Lagarde noted that in addition to country responsibility, macroeconomic stability is a collective responsibility, as are the other two levels she urged countries to act on: inclusion and the environment.
“Because in today’s interconnected world, for good or ill, cause and effect, spillovers and spillbacks travel across borders, instantly and unceasingly, irrespective of the walls that are being built,” she said. Her second priority was inclusion. More inclusive growth is also stronger growth, she asserted, “so we must empower people to fulfill their potential”.
“Improving girls’ education and removing barriers to women’s employment and access to finance would not only boost growth, but also tackle income inequality and poverty. Because let us not forget that poverty and exclusion are sexist,” Lagarde said.
Her third priority was the environment.
“Countries have a crucial stake in managing their natural resources efficiently and effectively. At the same time, limiting the harmful impact of economic activity on the environment can and will require targeted interventions,” she said. “In short, each country must do all it can to drive its own development. But durable progress cannot be achieved in isolation — it requires engagement from the international community. So we need collective action.”
In her three priority areas, she highlighted the interconnectedness of the world: macroeconomic stability — where an economic shock in one country will affect all others; inclusion — where social transformations drive the winds of change, and the environment — where, with global warming, everyone reaps what others have done.
“The IMF, with its 188 member countries and 70-year track record of promoting global economic cooperation and stability, understands well the need for, and power of, collective action. The IMF is working with its member countries and international partners in the spirit of global cooperation necessary to achieve the SDGs (Sustainable Development Goals). We have done so, we are doing so, and we will continue to do so,” Lagarde said.
The Sustainable Development Goals were adopted and officially launched last week.
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