Good morning. Wherever you are in the world, welcome to this virtual interview from politico. My name is robert heath and i am the author of politicos global translations. If you dont get my newsletter, you can get that. Today, we are kicking off a a worldcalled transformed. To discuss how the pandemic is changing global leadership. Other countries, global ngos andons and Global Private sector groups are rising to the occasion. Our guest today is kristalina georgieva, managing director of the International Monetary fund, imf. I have had the privilege of getting to know her over the course of 10 years as a colleague and as a journalist and im delighted that she will help us understand what she calls the great lockdown. Imf is pushing the emergency liquidity into the market. It is succeeding in getting a debt moratorium. Ina. Ome, kristal dir. Georgieva thank you very much. And hello to the obvious. Ryan we have people all over the world. Glad you made it into the office. Ill start with an easy one. Larry summers says we might have unemployment in the double digits for a couple of years. Be goingumbers seem to in one direction, down. How close are we to the bottom at the moment with the Global Economy . Dir. Georgieva this is definitely a crisis like no other. We have not seen in our lifetimes such a dramatic drop that ismic activities of actually our own making. The result is a shock for the world economy. Just to give you an illustration of the magnitude of this shock, it was not that long ago, in january we were presenting our projections and we were talking about any make growth and it was around 3 . Afterwards, from 160 countries with positive growth, we found ourselves in a situation where 170 countries were with negative growth and we had to drop our global projections by over 6 . In minus territory. Incoming data tells us it is likely for some economies to be in an even worse scenario than we projected just four weeks ago. So to answer your question, in shockof the most severe come it has already occurred. What we are likely to see in the future is not as dramatic and impact on employment and Economic Activities but some further shrinking of what we projected. We do expect a rebound. A recovery. 2021, even in the best case scenario, it will only be a partial recovery. In other words, we will be in the 20193 when we see situation returning. Ryan wow, four lost years. Dir. Georgieva it is going to be a time for the world to come together and go through this crisis. We will be on the other side. And the more we cooperate, the better the outcomes will be. Ryan im glad you mentioned that at the end. How much is our speedy recovery dependent on Global Cooperation . I look at question i look at countries like sweden and new zealand. They have had opposite reactions but similar numbers. Know what you think the relative degree of domestic policy action and global ordination is. Dir. Georgieva countries are different and the actions they take are different. We are all in unchartered territory. From theferent beginning of the crisis, it became obvious that we have a transition line. We created what we call policy one hundred 93 countries and everyone could see what others are doing in terms of fiscal measures, monetary policy, and financial actions. We got feedback that it was pretty useful. Even if countries decided to do something different, it is with the background of knowing what others have done. Now, we are moving to the second stage of this crisis. We had stabilization. Reopeninging toward a , a restart of economies so we are adding to this tracker what our countries doing what are countries doing to decide on reopening and how they approach it . Aat is interesting is i had meeting with my staff yesterday and we looked at a comparison between asia and europe. We want this comparison to be useful to anyone making decisions around what is the data . What are the most Important Health measures . How you spend your workforce . All the way to which sectors you open, how much and in what sequence . I can tell you that we found this to be extremely useful as comparison. Especially we want for the developing countries to have a credible source. Some of those developing countries have done very well so far. A positive western, unusual from a journalist, what is one thing you have seen in the tracker that you wish everyone had copied . Dir. Georgieva what we have seen on the action tracker is support for companies to retain their workers in place. And we have advocated for it and we have seen it massively spreading around the world. Keep firstyou workers affiliated with their firms, the chance for a more successful recovery is up. Thersonally like very much attention paid to linking social safety nets in a more coherent place because then you know the most Vulnerable People and the most vulnerable parts of the economy will be protected. Ryan that is very interesting because the imf has a reputation in some quarters as a kind of neoliberal nazi economic police. You come in and tell them to privatize their assets. Im not suggesting that is a reality. But your answer there suggests you are very concerned about inequality. This strikes me as a pandemic that is making a lot of inequalities starker. Is that something on top of your mind to change the image of the imf and push the social issues forward . Dir. Georgieva the most important thing today is to on the most vulnerable parts of society. Message that is not usual to come from us to governments and it is please spend wisely. Spend as much as you can and then spend a bit more for your doctors coming your nurses, for them for the Vulnerable People in your society. We are looking when we are looking from the other side in recovery, risks and opportunities. On the risk side, high death levels, high deficits, possible bankruptcies, high unemployment and one that i do care quite a lot and so does the fund, increasing poverty and inequality. Inequality holds economies back. It is actually unhealthy for everyone. Today oft to think policies that are going to address this risk. We actually just published a very interesting paper on experiencing previous pandemics. N1, zika. And it is sobering reading because it did lead to inequality. We cannot afford him the other side of this crisis to damage the social fabric to a point where it is a worse world. We want to strive to be a better world. And there are the opportunities, ryan. And i would say there are three that are really exciting. One, physical. The big winner of this crisis. In youmoving governments, elearning. And that is a plus for more accountability. Bestparency the disinfectant for society. It makes it so much more effective to putting public money to good use. Ryan may i ask a followup question . Themselvesmpanies are winners. Are you finding them to be responsible partners to the imf . Is there something you would like them to do to be more responsible actors given how well they have done in the crisis . Dir. Georgieva it will be very important to define fiscal policies for the future. Have agnize we have to sharing of the pain and the gains from the crisis and i hope the leadership of Tech Companies will see this as a chance to demonstrate responsible capitalism. Responsible behavior. We would need to in gauge on damagingto go into these companies but to strengthening them in a way that is good for everybody. Society as a whole. It will be extremely important for all of us to watch whether there is further division in thess to internet, to digital economy. Pay attention to developing countries and make sure they can take advantage of that is a goalnd of the funds advice. Theif i could move to second huge opportunity and it is to be more sustainable. Carbon, means low climate resilience, environmentally friendly. We are going to pour massive fiscal stimulus. We can make it so that it accelerates the transition to green growth for everybody. And the third big opportunity is in the area of addressing inequality. Think through this crisis in a way that helps us deal with problems that is been building up even before the pandemic. From many, many life can this sense of we build more solidarity in our communities and within countries. Following up on that greenpoint, it was the most our audience. From people support a green recovery. Is that something where you are applying your brainpower and encouragement or is it something that you are going to put as conditions on imf funding . We will do both. Ourre going to apply analytical and policy capabilities. Where ouready engaged mandate is strong and we can be very helpful in this transformation. Onthree areas first, disclosure of climate related risks. Audienceany in your may not know that the imf developed. We want to add to the stress test a climate guy mentioned. Is what you are holding in your portfolios likely to be affected by a Natural Disaster or by transitional risk . A very important part of our work is fiscal policies. With oilould see is prices being very low a big harmfulity to phase out subsidies including Harmful Energy subsidies. Countries need to reduce their spending and it is a good thing to do for both fiscal reasons the resistance to climate shocks. Also on the fiscal side, we can have conditions in fiscal stimulus that encourages low carbon transition. Let us remember that during the financial crisis they had experience with that so multiple companies would get a boost but they have to raise the standard in terms of their emissions. Around third aspect climate is as we work with countries around how they planed their recovery their recovery, of course, we can bring experience from those that have gone ahead. Progress, we are already having this discussion especially in terms of climate resilience. We learned to countries we lend to countries that are shifted by Natural Disasters. It is only right that as we lend, we build more resilience to this disaster for the future. Question final specifically related to inequality. We were on the stage together in december and we talked about the need for women to be able to fulfill their potential and have the opportunity to do that. Long time agoa that we had that discussion. While men are dying at a higher rate from this crisis but in so me asays, it does strike a very unequal situation. Is there anything the imf can do to take account of those factors . Beengeorgieva we have very engaged on this topic from to economic standpoint gender equality. We want countries to do better and we believe they will do better when women can participate on an equal footing. We will continue especially with a focus on the legal side to eliminate illegal barriers and provide equal protection for women. This crisis has thrown cold water on what has been a very positive trend towards more equality. And i do appreciate you personally for coming in defense of women. Voices on that. Women are beaten up more, they do more chores at home come and they are in jobs by and large that are in hospitality. In hospitality workers have been hit tremendously hard. That our workget is richer when women are equal. Ryan 100 . To get a little technical, not for you but maybe for some in the audience, i wanted to ask you about something called special drawing rights. Oxfam raised that from our audience. Version they are a special type of asset available only to governments. An alternative for in reserve. Other than gold or cash, correct me if im wrong. You said there is an emerging consensus that maybe we should use some of these special drawing rights to deal with the pandemic. Since those comments, Goldman Sachs and trade unions in an Unusual Alliance have called for 3 trillion to be spent to aid more middle Income Countries and they want to do that via the imf and the special drawing rights. Are you supportive of a huge effort like that . And if you are, what are some of the obstacles to achieving that . Dir. Georgieva the proposal i made to the g20, for scaling significantly to fight the crisis. I did list also the special drawing rights as one possible ment we. Havegotten strong support from our shareholders ,o increase emergency financing to expand the flexible instrument we have. On the issue of special drawing rights, where we are right now is we have consensus of the usage of existing special drawing rights to move them from countries, wealthy countries, that dont need this to developing countries that do need this. We dont have consensus on a new allocation of special drawing rights. To be fair to those that are still skeptical, when we make an allocation like this it goes pro all of our members come those that need them and those that do not. Our rich members would get 62 of the new allocation whereas the low Income Countries would. Et only 3 billion you can multiply that by five and it would still be relatively small. Thoset i would say to that are urging us to look into it, yes, of course, our membership is in agreement. Everything has to be on the table in this crisis like no other. For now, my focus is to make sure that everything on which we do have consensus gets done. Ryan total consensus . Or if you got 85 , you would do it . We would need 85 of the vote in favor. We are not there yet. Where we are is we have strong support from the membership to deploy our 1 trillion lending capacity. Is fourd people, this times more than the fund has just applied to the Global Financial crisis. Using are only 1 5 into this strength of the imf. Ryan i wanted to ask you about some creative thinking now because you have always been a big advocate of global institutions being more aligned and integrated avoiding duplication and their work. The reason i wanted to talk about that was i was writing a lot about Food Insecurity and hunger. And it struck me as terribly sad that the World Food Program is struggling to get even a billion dollars together to prevent this sort of mass starvation that may happen if there is a big writedown in the Food Supply Chains in africa. Is there anything you can think of or that the imf can do to connect the World Food Program to that billion dollars . What are some of the ingredients to that . Dir. Georgieva let me first say how much i respect the work of the World Food Program. Where it isplaces savey dangerous to be to lives of people. I heard from the head of the World Food Program encouraging words that it looks like he is gathering support for this funding that is now necessary. Fund iscan do from the actually to support countries to so theirgh financing people do not go hungry. This is emergency financing. It is generally a lifeline. 56 countries. Added 3. 5eek, we billion as emergency financing and what is provided is the ability for countries themselves projectsritical including making sure there is money to support agriculture and the provision of food. Ryan a perfect bridge into the next question where we have aboutbeing very positive your role in getting a debt moratorium for some of the poorest countries this year and next year but they described it as a first step only. And there might be more that is needed. We are in a situation where we do not have a vaccine heading into 2021 and 2022, it seems obvious we are in a zone to think about resilience. When will you start to turn to those questions . When we have to think about next steps towards the mediumterm resiliency . Dir. Georgieva we are constantly preoccupied with what more we can do to lean forward in this crisis. Innovated from the beginning and we will continue to do so. , what we are doing is updating our projections and what theasis updating asd would be expected to do the lender of last resort but also as an institution that has built more capacity to be incomeve in the low countries. And in that regard, one thing we are doing now, ryan, is to triple our concessional lending capacity. And what gives me a great deal of satisfaction is that we have been able to mobilize our membership to achieve that goal in a very short period of time and if it is necessary to do more, we will push to do more. We are also looking at a country becausery level of debt we want to be sure that we act early in situations where that is unsustainable. Ryan now, one thing that people might want to know more about is that you seem to have very good relations with the u. S. Administration and that is not true of all global institutions, lets say. Who is your secret or your rock in the administration you turn to to get those results . Dir. Georgieva my focus is and will continue to be to keep the membership together and to present a credible strategy that stable and secure future for the world. When it comes down to engagement with the u. S. , i talked to everybody. I go to the hill and i talked to the administration of course and what i present is where we are, what the projections are for the future, and what needs to be done and how the u. S. Can help. And,t to secretary mnuchin the u. S. Is integrated into the 2 billiondollar project 2 billiondollar package. They did it when the preoccupation was domestic, very serious domestic problems. Evidence this credible of actions that can be taken and then the track record of taking these actions that helps a lot. Ryan i wonder to squeeze in one more final audience question and then a few lighthearted ones at the end. The audience question is what country is your biggest headache at the moment . I think they mean is it lebanon, argentina, a country on the edge you are really worried about. Dir. Georgieva i would not go to one country. I would say my concern my biggest concern is countries that stepped into this crisis relatively weak. This is the issue that we are recognizing. That calls for the most important lessons from the crisis is build resilience during good times. They had a high level of debt. Fundamentals. K weak institutions. And that makes them more susceptible to the shock that comes from this crisis. Everyone. Ion is for we are in this world where everyone is hurting but in particular those that came into the crisis weaker. Ryan now, the fun part, the easy part. You were asking me about my bookshelf before we got started. I was wondering, what are you reading right now . Dir. Georgieva im reading reports nonstop. I actually wanted to take a picture for International Book day and the dilemma was am i going to lie that im reading a book . So i put an old picture. If youy thing i do for, well, fun is iowa the roosevelt series. Not difficult to explain why because we are now in a period of time that is the worst since the great depression. Fromking some inspiration ryan is it research for a global new deal . Dir. Georgieva thinking how we can excite the world to come together. It has been proven that after a war we come together, why not after a pandemic we come together . Ryan last question. Do you think you will cut back your travel in 2021 . I know you have always been a big traveler. Dir. Georgieva i will cut on travel because what we now know is we can do much more. My determination is for the fund to come out on the other side as a more agile organization, much more reliant on telecommuting, videoconferencing. And mych more footprint responsibility is to live in that. But stop here. Ryan you are going to have to change the imf color to green when we do our next interview. Dir. Georgieva i give you my promise for that. Talina, thank you for your time. We know you have other problems to solve. Thank you for joining this virtual interview and for everyone watching, thank you for joining and we will see you at the next interview coming up very soon. Thank you very much. Dir. Georgieva thank you. Tonight on q a, journalist susanna kaelin discusses her book the great tender, about an experiment run by stanford psychologist so much of what we contend with today, so much of the Mental Health crisis that we see today was touched in some ways by this study, and a lot of Public Opinion about psychiatry and institutions were in part shaped by the study. It, weink in questioning have to go back and question some of our assumptions, and i hope that this gives us an opportunity to kind of go back and reassess in a way, to move forward. Forward on a run foundation. This study was not up to snuff. It was not legitimate. We have to rethink some of the conclusions it presented. Tonight at 8 00 eastern on cspans q a. Journal,washington journalists from around the world give an update on global Coronavirus Response efforts, including new zealand, south korea, the united kingdom, sweden, and spain