Exposing a new world order. The u. S. Isnt the main or only center of that order, and other countries, global institutions, global n. G. O. s and private sector groups are rising to the occasion. Our guest today is the managing director of the International Monetary fund, the i. M. F. Please tweet us your questions using askpolitico. Ive had the privilege of getting to know her over the course of 10 years, first as a colleague, now as a journalist, and im delighted shes going to help us understand what she calls the great lockdown. The i. M. F. Is pushing emergency liquidity into emerging markets. It succeeded in getting a debt mother tourm. Its got 1 trillion in lending capacity. Is it enough . Were go b to find out. Welcome. Thank you very much. Hello to the audience. Absolutely. Weve got people all over the world. So glad you made it to the office today to be able to do this. Ill start with the easy one. Larry summers says we might have unemployment in the double digits for a couple of years. All the g. D. P. Numbers seem to be going one direction, down. Tell us, what do you think, how close are we to the bottom at the moment with the Global Economy . That is going to be a crisis like no other. Weve had enough in our lifetime for such a dramatic drop in economic activity. That is actually our own making. We have taken the conscious ecision to stop working. And the result is a shock for the world economy, just to give you an illustration of the magnitude of this shock, it wasnt that long ago in january we were in davos, presenting our projections. We were talking about anemic growth, and it was in the order of around 3 . Only weeks afterwards from having 160 countries with positive growth, we found out theyre in the situation of 170 countries with negative growth, and weve had to drop our growth projections by over 6 . We are incoming data, it is likely for some economies to be in an even more diverse scenario than we projected just four weeks. So to answer your question, in terms of the most severe shock, it has already occurred. What we are likely to see in he future is not as dramatic impact on employment and conomic activity, but possibly some further shrinking visavis what we projected. We do expect a rebound, a recovery. But for 2021, even in the bestcase scenario, it would be only a partial recovery. In other words, we will be in 22, 2023 when we see the situation the 2019 situation returning. Wow, four lost years, that is very sobering. It is going to be a time for e 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. Im glad you mentioned that at the end. How much is our speedy recovery dependent on global coordination . I look at countries like sweden and new zealand. They had nearly opposite approaches to covid, but theyve got nearly identical economic negative growth numbers. And to me that suggests were subject to global forces, and then we need global coordination, but i dont know what you think the relative degree of domestic policy action and global coordination is. Countries are different, and actions they tear are different. We are in all uncharted territory. From the very beginning of this crisis, it became very obvious that we have to serve as a transmission line of these different experiences, so what we created what we call policy action for 193 countries. Everybody can see what others are doing in terms of fiscal measures, monetary policy, financial actions. And we got feedback that it is patriot useful, even if countries decide to do something different, at least it is on the background of knowing what others are doing. Now we are moving to the second stage of this crisis. We have stabilization. We are still more or less there, but we are moving restart of opening, the economy, so we are adding to this tracker. What are countries doing to decide on reopening, and how they are approaching it . You know, its really interest, i had a meeting with my staff yesterday, and we looked at comparison, and we want this comparison to be useful for making who is now decisions around about what is the core data, what are the most Important Health issues, what are the other measures that have to be taken, how you spend your workforce, all the way to which sectors are open, how much and in what sequence. And i can tell you that we find this to be extremely useful as comparisons. It is where we want especially for the developing countries to have a credible source that we are putting in place. And some of the developing countries have done very well so far. I wonder a positive question, very unfrureb a journalist. Whats one thing youve seen in the tracker where you wish everyone just copied that idea or that program . What we have seen on the support for r is companies to retain their workers in place. And we have advocated for it and we actually have seen it massively spreading around the world. Because if you keep it first and you keep workers affiliated with their firm, then the successful more recovery is up. I personally like very much the Attention Space to bringing social safety in a more coherent place, because then you know that the most Vulnerable People, and the most vulnerable parts of the economy will be protected. Thats very interesting, because the i. M. F. Has a reputation in some quarters as the kind of neo liberal, nazi economic police, that you come in and you tell everyone to privatize their assets, and im not suggesting that that is the there but your answer that you are very concerned about inequality, and it strikes me this that is a pandemic that is make ago loft inequality starker and deeper. Is that something thats on top of your mind to try change that image of the i. M. F. And push social issues forward . The most important thing is to concentrate on the economy and on the most vulnerable parts of society. We have a message ready, very nusual to being from us. Anything spend wisely. Spend as much as and you can spend a bit more for your doctors, for your nurses, for the Vulnerable People in your society. What we are looking at on the other side, when we are in recovery, risks and opportunities. On the risk side, high debt levels, high deficits, possibly bank recreets, possibly high unemployment, and one that i do care quite a lot, and increasing poverty, increase inequality. Inequality holds economies back. It is actually unhealthy for everyone. So we want to think today of policies that are going to address this risk. We actually just published a very interesting paper on xperiencing previous pandemics. And it is a reading, because it did lead to higher inequality. We cannot afford on the other side of this crisis to damage the social fabric to a point that it is a worst world. We want to try to be a better world. And there are the opportunities, and its really, really exciting. Digital, clearly the big winner of this crisis. We are moving in egovernment, ecommerce, epayments, eearnings, and that is also a platform for more accountability. Transparency, the best disinfectant for societies. It makes it so much more effective to put public money for good use. Can i ask one followup question . Yeah, yeah, yeah. Tech companies, the Tech Companies themselves are big winners in this crisis. Are you finding them to be responsible partners with the i. M. F. . Is there something youd like them to do to be more responsible actors, given how well theyve done in the crisis . We define fiscal policy for the future, remember, weve got to teach them that we recognize , we have a form of sharing the pain and the gain from the crisis. And i very much hope that the leadership of companies will see this as the chance to emonstrate responsible capitalism, responsible behavior. E would need to engage on that not to go into damaging companies, but strengthening it in a way that is good for everyone, for society as a whole, and it will be extremely important for all of us to watch whether there is further division in actors to internet, to the digital economy, and that means Pay Attention to developing countries. Make sure they can take advantage of this leapfrog, and that, of course, goes for what they have, what the world bank advises them, what countries do themselves. And if i can move to the second huge opportunity, and it is to be more sustainable. That means low carbon, environmentally friendly, growth on the other side. Are going to massive fiscal stimulus. Can make it so it accelerates the position to growth for everybody. And the third big opportunity in the area of addressing inequality. We can think through this crisis in a way that helps us deal with problems that been building, even before the pandemic, and what i hear from many, many, many, many people life can be of better if we build more solidarity in our communities and within countries. Following up on that point, it was the most popular topic amongst all of the audience questions, so people i do think support this idea of a green recovery. Is that something where you just are applying your brainpower and your encouragement, or is it something where you can and are going put conditions on i. M. F. Lending to say people do have so finance projects or something similar like that . So we would do both. We are going apply our analytical and policy capabilities. We are already engaged where our mandate is strong, and we can be very helpful in this transformation in three areas. First, on disclosure of climaterelated risks, many of your audience may not know that the i. M. F. Invented stress sets for bags 20 years ago. Well, what we want is to add to this stress test also in climate dimensions. Is what you are holding in your portfolios likely to be affected by natural disasters or by transitional breaks . Second, very important part of our working fiscal policy. So what we would see, with all prices being very, a big opportunity to phase out powerful subsidies, including energy subsidies. Countries also need to reduce their spending, and its a good thing to do for reasons and for climate tance to shocks. Also on the fiscal side, we can have conditions in fiscal stimulus that encourages low carbon transition, and lets remember that during the financial crisis, there was experience with that, so other companies would get a boost, but they have to raise the standards in terms of their emissions. And the third aspect in the work around climate is as we work with countries around how they plan their recovery, of course we can bring more experience from those ahead, and yet in our progress we are already having the discussions, especially in terms of climate resilience. We lend to countries that are frequently hit by natural disasters. Lend, is only right that we build more resilience to this disaster for the future. One final question specific to inequality. The last time we spoke, we were on stage together in december, and we were talking about the need for women to be able to fulfill their potential, given the opportunity to do that. It feels like a very long time ago where we had that conversation. But i ask, because while men are dying at a higher rate in this crisis, in so many other ways, whether it is women as essential workers, more women losing their jobs than men. It does strike me as a very unequal situation. Is there anything the i am kim do to take account of those factors in your policymaking nd your lending . Wr engaged from this top fringe the economics of gender inequality. We want more countries to do better, all other things equal, tchee better when women can participate on equal footing. We will continue, especially with the focus on the legal side, eliminate legal barriers and provide Legal Protections for women. And yes, this crisis has thrown some cold water on what has been a very positive trend towards more equality. And i do appreciate you in nally for coming defense of women. We need more advice on that. Women do more at home, now everybody stays at home, their burden has gone up. And they are in jobs by and large as nurses and hospitality workers that are hit tremendously hard. So lets not forget that our work is richer when women are equal. 100 . Now, 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. Thats a topic that Nathan Copland from oxfam raised as a question. For anyone not familiar, this is a special type of asset thats available only to governments. Its kind of an alternative foreign resefrpblt i think other than gold or cash, you correct me if im wrong there, now youve said theres 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, theyve called for 3 trillion to be spent to aid poor and middle income countries. They want to do that via the i. M. F. And the special drawing rights. Can you tell us, are you supportive of a specific huge effort like that, and if you are, what are some of the bstacles achieving that . For th the heads of states the contribution of the i. M. F. To fight this crisis, i did list also special drawing rights as one possible instrument. We have gotten very strong support from our shareholders to increase emergency nancing, to expand the flexibility instrument we have, on special drawing rights where we are right now is weve had consensus of the usage of existing special drawing rights to move them from countries, wealthy countries, they dont need it, to developing countries that do need it. We dont yet 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 to all our members, those who need it and those who dont need it. Tomb our rich members, our advanced economies, would get 62 of the new allocations. Wheres the lowincome countries would get only 3 billion out of 500, assuming 500 bill yofpblet you cannot modify by five. It would still be relatively small. So what i would say to those that are urging 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 to assess this gets done. Total consensus or if you got i dont know, 85 or 90 youd do it . Of the ed to get to 85 folks in favor. Were not there yet. Where we are actually with very strong support from the membership is to deploy our 1 trillion lending, and just to remind people, this is four times more than what the fund has just prior to the Global Financial crisis. And we are only 1 5 into using this strength of the i. M. F. Now, i wanted to ask you about some creative thinking now, because youve always been a big advocate of global institutions being more aligned and integrated and avoiding duplication in their work, and the reason i wanted to talk about that is i was write ago lot about Food Insecurity and hunger in recent weeks, and it struck me as terribly sad that the World Food Program is struggling to get even a billion dollars together to really prevent the sort of mass starvations that might happen if there are big breakdowns in Food Supply Chains in africa. Is there anything that you can think of or that the i. M. F. Can do to connect the world food froom that billion dollars, or what do you think are some of the missing ingredients . Let me satisfies how much i respect the work of the food program. They are in places where it is really dangerous to be. I heard from the head of the food program, encouraging work that it looks like he is gathering support for this fun thing that is now necessary. Hat we can do from the fund is actually support countries to have enough financing so that people dont go hungry, and this is our emergency financing. That is genuinely a lifeline. , are now up to 66 countries and just this week, we added 3. 5 billion as emergency financing, and what it provides is the ability for countries hemselves to fund critical items, including to make sure that there is money to support agriculture and the provision of food. Thats a perfect bridge into the next question, actually, where we have n. G. O. s being very positive about your role in getting debt moratorium for some of the poorest countries over this year and next year, but they also described it really as a first step only, and that there might be more thats needed. And if were in a situation where we dont have a vaccine getting closer into 20, 2021, 2022, it seems obvious that were in a zone where we have to think bhor the medium term resilience and some other adaptation. I just wonder, when will you start to turn to those questions, when we have to think about next steps beyond the first moratorium and the edium term resiliency . We are preoccupied with what re we can do to lean forward in this crisis. We have innovated from the beginning, and we will continue to do so. For the funds, what we are doing is updating our projections, and on that basis, updating what the funds as the expected to do lender of last resort, but also as one who has built more capacity to be effective in the lowincome countries. And in that regard, one thing we are doing now, ryan, is to lending capacity. And what gives me a great deal of satisfaction is that we have been able to mobile ease our membership 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 ountrybycountry level of debt, because we want to be sure that we are early in situations when that is unsustainable. Uhhuh. Now, one thing that people might want to know more about is that you seem to have a very good relations with the u. S. Administration, and thats not true of all global institutions, lets say. I just wanted to know, whats your secret or whos your rock in the administration that you urn to to get those results . My focus is and will continue to be to keep the to rship together and prevent a credible strategy that builds a more zpable secure future for the world. So when it comes down to engagement with the u. S. , i talk to everybody, i go to the hill, i talk to the administration, of course, and , at i present is where we are what the projections are for the future, what needs to be done, how the u. S. Can help. The u. S. , a credit to secretary mnuchin, integrated in the 2 trillion package resources for the i. M. F. , our ability to lend more. They did it when the preoccupation was domestic, very serious domestic problems. Nd it is this credible evidence of actions that can be taken, and then the track record of taking this action that helps. I wanted to squeeze in one more final audience question, and then just a couple of lighthearted ones at the end. The audience question is what country is your biggest headache at the moment . I think they mean, you know, is it lebanon, argentina . Is there a country thats right on the edge that youre really worried about in the coming days and weeks . Well, i wouldnt go to one country. I would say my concern, my biggest concern are countries that stepped into this crisis relatively weak. This is the issue that we are recognizing, that calls for the most important lesson from the crisis is during good times. O they have high level of debt , relatively weak fundamentals, weak institutions, and that makes them more susceptible to the shock that comes from this crisis. Our intention is for everyone, you know, we are in this world where everybodys hurting. But in particular those that came in the crisis weaker. Ok, now the fun park the easy part. You were asking me about my bookshelf just before we got started with the audience. I was wondering, what are you reading right now . Im reading reports nonstop. I 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 of the nly thing i do for you that is series, and the it wasnt difficult to explain why, because we are now in a period of time that is the worst since the great depression. So seeking some inspiration is it reset for a global new zpheel is that something we need . Yeah, thats what were thinking about, how we can get the world to come together. It has been proven that after a war, we come together, well, why not, after a pandemic we come together . Last question, i promise this time. Do you think you will cut back your travel in 2021 . I know that youve always been a big traveler. Your schedule has been jampacked. Yes, i will. I will cut on travel, because what we now know is that we can telecommuting. I want the funds to come on the other side as a more agile organization, much more reliant on telecommuting, video conferencing, and possibly engagement with much smaller my rint and, of course, responsibility is to live in that regard. The buck stops here. Youre going to have to change the i. M. F. Color to green next time we do the interview then. I give you my promise to that, for that. Well, thank you so much for your time. I know that youve got other problems to solve, so were going to leapt you go. But thank you so much for joining this politico world transformed virtual interview, and for everyone watching, thank you for joining, and well see you at the next interview coming up very soofpblet [captioning performed by national captioning institute] [captioning performed by the national captioning institute, which is responsible for its captioning content and accuracy. Visit ncicap. Org] well have more live promising today from texas with a briefing by Governor Greg Abbott on his states response to the pandemic. Thats scheduled for 3 00 eastern time. You can watch it live when it starts right here on cspan. On capitol hill, social distancing guidelines remain in place as Congress Begins their week. The senates back today at 3 00 p. M. Eastern to consider a judicial nominee to the u. S. District judge for arizona, with a procedural vote set for 5 30. The rest of the week, they have more nominees to consider, including republican lawyer James Trainor to be a commissioner on the federal election commission. For now, the senate has no plans to take up the 3 trillion Coronavirus Relief package, passed by the house late last week. The house of representatives has no vote scheduled this week, but on tuesday, during a short pro forma session, there will be a swearingin for two newly elected republican members. The house plans to resume legislative work on may 27, starting with the reauthorization of fisa, which has already passed the senate. Watch live coverage of the house on cspan and the tonight on the communicators, new yorker magazine writer talks about his book antisocial, online extremists technical hope you technical utopia. Without we will just disrupt everything and have every hierarchy we know just come crashing down. Whatever happens next, it will probably be fine, but we dont know what it is. But we now know in retrospect, spoiler, it was not fine. Valleyvacuum silicone created came the nihilists, trolls, liars, propagandists. Watched the communicators tonight on 8 00 eastern on cspan two. Federal reserve chair Jerome Powell and treasury secretary Steven Mnuchin testify remotely before the Senate Banking committee about the 2 trillion cares act, which passed in march, as part of the governments coronavirus response. Live coverage begins tuesday at 10 00 a. M. Eastern on cspan, cspan. Org, or you can listen live on the free cspan radio app. Ues. Host reid wilson is with us this morning, author of de