How the world moves forward after the novel coronavirus (COVID-19) pandemic is an important question that the International Monetary Fund (IMF) wrestles with, and involves three parts, according to its Managing Director, Kristalina Georgieva.
Georgieva also said that there is anxiety on returning to normal, particularly given that the previous ‘normal’ was “not great”.
The IMF head’s comments during a virtual Panel Discussion on Economic and Social Transformation, which it organised on Wednesday.
Georgieva noted that governments have an important role to play in the post-COVID-19 era, and that it is not about big government or small government. It is, instead, about good leadership that does the right thing for people.
“This includes reflecting on what it means to make sure that there is access to opportunities for all, what is the role of policymakers to set the right policies in place, but also to put their money where their mouth is,” she added.
“Of course, the fund has to be clear on policy recommendations that are forward leaning and that is a big part of my second point, in addition to there being shocks to come,” Georgieva noted, “Building resilience to shocks is something that becomes a ultimate goal of policymakers, but it is also a role for individuals and certainly for businesses.”
The IMF head added that there then comes the issue of social acceptance, and how the world builds that social acceptance in an era of information, misinformation, and straightforward lies. This includes how we go about creating such a concept, and how we get that notion of vibrant civil society, where information serves a powerful purpose in that vibrant society.
She explained that transformations are good when they lead to good policies, but that they are also complex, and they can be painful.
Micro decisions have micro consequences, Georgieva said, adding that they have to be understood. This includes negating and mitigating their impacts to the greatest extent possible, to ensure they bring the desirable gains for country, community, and family.
“I know that we are now at the boundaries of another transformation due to the pandemic, and it is very important that what comes on the other side is better and inclusive,” she said.
She recalled her first speech as IMF head in the month just before the pandemic, noting that it is not practical to return to how things were before the global health crisis.
“In the speech, I talked about low productivity, anaemic growth, inequalities going up, and a looming climate crisis, none of which have gone away,” she said.
Georgieva noted that the world has an absolute obligation to look at what policies can do to bring us to a more inclusive greener resilient digital world. This would ensure as little divergence as possible, and yet growing divergence is being seen within and across countries.