Transcripts For CSPAN Christine Lagarde On The Global Economy 20141006

The british house of commons will be in recess over the next few weeks so Party Leaders can attend their annual conferences. The house of commons returns in midoctober. You can watch past Prime Ministers questions or other british programming on our website. International Monetary Fund director Christine Lagarde talks about the imfs growth outlook. 11 00, q a. Another chance to see british Prime Minister David Cameron speak at the conservative partys annual conference. On thursday, imf managing director Christine Lagarde said the Global Economy is weaker than anticipated. Previewed this weeks Imf World Bank annual meetings in washington. This is just over an hour. Thank you for joining us this morning. For over a century, this hall has served as one of the most important places for public discourse. Today, we deepen that history as we come together to engage in conversation on the most pressing issues facing our Global Economy. And to provide insights, we are honored to have with us Christine Lagarde. The 11th person to serve in this role and the first woman, she has stewarded the imf during the our of great challenge in Global Financial environment. She is here today to talk about the way forward and the role the imf is playing to promote Financial Stability and growth around the world. There is greater urgency to this work and from how we respond to issues of poverty and inequality to our assumptions about growth. As a university, it is our role to imagine how we can better care for one another, how we can build our society so they can be more inclusive. We can address the challenges that confront us, whether for the formation of our students as women and men and for others, through the inquiry of our faculty, and responsibility we have in promoting the common good. It is the characteristic spirit of the university to seek the betterment of human kind. You can see this work, live and settings like this , live in settings like this. Come alive in settings like this. We recently announced that the 2001 Nobel Prize Winner in Economics Sciences currently senior resident scholar at the imf, will be joining our faculty in november. In todays lecture, we seek to gain a deeper understanding of the financial challenges and opportunities of this moment and to engage in conversation on the policies and approaches that contribute to global prosperity and Economic Opportunity for all people. An experienced government minister, an expert in antitrust and labor issues, the first woman to serve as finance minister of the g7 nation and the first woman chairperson of the American Law Firm a karen mckenzie, she offers an unparalleled perspective into the Global Financial system. She has held various posts in the french government. In 2009 the Financial Times med her the best minister of finances in the youre zone. She chaired as chair of the g20 in 2011 and in that role launched a wide ranging agenda on the form of the International Monetary system. Her role as managing director, a post shes held since 201e6789 shes sought to bring stact to the Global Economy. Inquality chokes the sposs perspectives for individuals to realize their full potential and contribute to society. Whether it is through personal experience or impeer kl evidence, one thing is clear, growth has to be more inclusive and for this finances has to be ore inclusive. We welcome madam lagarde to campus day today at the moment of significance frye as they approach their annual meetings here in washington. We are grateful for her presence and the insights that she will share with our community. Ladies and gentlemen its an honor for me to welcome to the podium, Christine Lagarde. Good morning to all of you and president i would like to thank you very much for introduction i would like to especially thank you for having quoted the speech that i gave in mexico. It is definitely a country that epitomizes some of the points that i will try to make and they caused my remarks this morning as the country that tries to include particularly those that did not have access to finance, those that do not have access to the job market and i mean by that often the poorest and frequently women. Madam ambassador, delighted to see you here. Mr. Dean i am pleased to look forward to you handing the questions from the many of you who are here today and its very very nice to be here at georgetown university. Im really honored to be hosted by one of the finest schools of foreign service. I looked at your Mission Statement and correct me if i get that wrong but i read that he mission is to contribute to global peace, prosperity and human wellbeing by educating future generations of world leaders. Now the founders of the school back in a year that is very famous for me, 1789, the ounders of this school had a very ambitious and sustainable vision. They were inspired by some of the writers and in what happened in france around the bus deal in 789 but im sure they had no idea that only 70 years ago in 1944 the Bretton Woods institutions including the imf would be founded with pretty much the same purpose in the same mission only using of course different means. The focus of your institution is education. Our focus is stability around the world using all the means that were then available and which i will tell you later on has evolved over time. So we are in the same boat. And as i look at the gray and blue colors of georgetown university, the colors that dorn your beautiful campus and the colors i have tried to replicate with my scarf i am actually reminded of the things that i would like to touch upon today. Ecause essentially what i will focus on is the gray clouds that we have on the horizon and the blue skies that most populations around the world aspire to. We have that integrity at the moment between the aspirations of the blue sky and the gray clouds that are coming out. Before i do that because those will be the topics addressed as you said mr. President next week by the 188 governors of Central Banks from around the world. Thats the management of the imf. They will be focusing on data they will also discuss how the imf can could choubey to pushing out some of these gray clouds. Let me just tell you a little bit about the imf on the occasion of that 17th anniversary are celebrating. It was founded as i said in 1944 s a world war ii was coming to a close in New Hampshire Bretton Woods. And for the last 70 years we have been doing quite a few things. We have been fighting many crises around the world starting in europe moving over to asia focusing on latin america and then we have helped many developing countries integrating into the Global Economy. E have provided enormous Technical Assistance, Capacity Building around and historically we have are very much a referee of variation of currencies. That hasnt faded away as the Monetary System has evolved which was predominantly a fixed Exchange Rate to predominantly a floating Exchange Rate. The surveillance activity in the monitoring and support, that is still with us. In the recent years, we have provided Financial Support through programs to many countries around the world predominantly in europe. In recent months we have extended support to countries like ukraine, countries in the middle east and most recently the three african countries that are the victim of ebola. We put together in next to no time literally a financial package of 130 million to give them additional budgetary support so that they can face the shortfall of revenue and additional spending that they have to engage. Our main job is as i said earlier on is to try to push the clouds up because you will see numbers and you will hear about numbers. There is some economic recovery but as we all know and as we can feel it because we have family members, friends, relatives, people we know who are looking for a job who do not have the means that they would like to have. That growth is not enough to respond to the challenges that the world is facing. O what should be done . We believe that the clouds can be pushed provided that all policymakers actually aim higher higher, try harder, do it together and country specific and i will touch on all of that. So what do i mean by that . Im higher, try harder, do it together. There has to be a new omentum. A new momentum that will consist f putting a set of bolt of policies together in order to overcome what i would call the new mediocre and that is a isk. If it stagnates as such, if we have this horizon of new mediocre. So what i will focus on his first of all the state of the Global Economy as we see it at the moment and the risk that the world gets stuck in that new mediocre. And second i would like to describe for you how all policymakers can generate the policy momentum that is needed to power up the global activity and overcome that new mediocre horizon. Of course i will conclude really that comes back to us in to us and away what to us in a way what i regard as essentially leaning forward and this is the new multilateralism which requires increased Cooperation Amongst policymakers and amongst countries. O lets have a quick look at the state state of the Global Economy as it is at the moment. Im going to give you very pecific numbers because they will be released next week when we bring all the finance ministers and governors of Central Banks together but suffice it to say at this point the Global Economy is weaker than we had hoped only six months ago so there is ecovery. Dont get me wrong but its weaker than what we had thought. And we forecast a modest pickup in 2015 and thats an important factor. The outlook for potential growth has been pared down. Now as i said earlier its country specific and the prospects are different depending on where you sit or where you look out. Among the advanced economies clearly the United States of america and in europe the United Kingdom are leading the charge and expected to be strong. The recovery is much more modest in japan and its the weakest in the euro area where there are disparities with the same currencies. The emerging and developing economies, they have been doing all the heavy lifting in the last five years. They have contributed roughly 80 of Global Growth of the last five years and led by asia predominantly given the size on the growth particularly china they will continue to contribute but then too i would like to do that at a slightly slower pace because we are all interconnected. If some of the players are a bit slower they will be affected too mad. For the low income and developing countries including Subsaharan Africa the economic prospects are rising. I will come to the risk in a minute but the economic prospects are rising and remain however because some of them have been borrowing quite extensively and issuing in the markets their debt level has increased so they should be watching. Finally in the middle east the outlook is clouded by difficult economic transitions and of course by an intense tension and political strife. The bottom line of all that, six years after the financial crisis, we continue to see weakness in the Global Economy. Countries are still dealing with the legacies of the crisis and what do i mean by that . A much higher debt level both in sovereign and quite often corporate and private sector levels in general and unemployment is still a major major difficulty in many of hose crises. Those are the legacies. In addition to the legacies that they are still struggling with and have difficulties addressing, there are those gray clouds on the horizon. Now lets look at those clouds. We have different categories. E have the economic clouds, we have the financial clouds and we have the geopolitical clouds. I dont pretend the imf can push all the clouds. It will require collective effort and thats my final point. The first Economic Club that we see is that risk of low growth for a long time. Now, how is that characterized . Will if you expect growth to be be you are going to refrain from investing in new capital expenditure. You are going to refrain from consuming possibly in this dynamic seriously impede the recovery. So its not sort of a vicious circle into which the economy could find itself and as i said this is the circumstances where you have a combination of low inflation and high unemployment. That is currently the case within a euro area and in some countries more than others. The second cloud is still economic although more monetary. The second cloud we see on the horizon is that of unsynchronized who has studied latin and greek hear . Everybody. It means they are not going to be all synchronized together and it might apply to the same Monetary Policy with different moments of the cycle. The Monetary Policy normalization in advanced economies and the spillover effect that will have on other markets. And this bill back affects that it could have been the domestic market where the normalization is taking place. Those impacts could be of three kinds, Interest Rates, variations which we havent seen much of lately because they are all rock bottom and variations of Exchange Rates. The second category of clouds that we see, financial clouds. There is a concern that the Financial Sector excesses may be building up especially in advanced economies. Asset valuations are at the highest. Spreads and volatility in almost all sectors, not quite all but almost all are at their lowest. Further worry is the migration of new markets and liquidity risks outside the Banking Sector in what we called the shadow Banking Sector. Which is a nonregulated, nonbank sector which is growing rapidly in some countries. In the United States for instance the shadow Banking Sector isnt now considerably larger than the Banking Sector. In europe it is roughly half the size of the Banking Sector and in china about 25 to 35 of gdp, it is the fifthlargest in the world. So its growing and its not all bad. Shadow banking can be just fine in some cases ended needed is needed in some economic space to actually finance economy growth but the problem about it is we dont know enough about it. When i say 25 to 35 it gives you the range of what we now but also what we dont know about it. O that requires particular attention and probably an expanded type of regulation that will embrace larger and broader than just the banking ector. It also emphasizes the fact that we need to complete the Financial Sector reform and he may have heard a lot about the Financial Sector reform over the last six years because it was described in the objectives of the g20 back in washington and then london. I was there, i remembered that there are still areas where we have not made the progress that we have to make. Thats the case for the too two important they fail institutions and be regime that should apply. That is the case also for the derivative markets that need to be safer and more transparent and require exchange of information between those places that actually have a very active derivative market. So, we have talked about the economic clouds. We just talked about the financial clouds. I want to talk briefly about the geopolitical clouds. We have quite a few of those. We have to have them on our radar screen because they have an impact on economic and Financial Stability as well as rosperity. The first one that i would mention is any escalation that could take place in ukraine where it would cause disruption both in the immediate vicinity would also possibly disruption on Commodity Prices for instance and trade. The second area of possible disruption clearly the middle east. And also in some parts of asia. The third category that i would think of ukraine middle east in some parts of asia is obviously the development of the ebola virus. If it is not contained, if all the players that talk about it dont actually do something about it to try to stop it and contain it and help those three countries deal with it it might develop into something that would be a very serious concern and could cause significant risks. So all those risks, and some of them are materializing just a little bit. We have to be careful that they did not develop and we cannot put them on the back burner. E have to have them on our radar screen all the time. That is the reason why we must adopt collectively that new momentum that i told you about in order to avoid that raising of the new mediocre. I hope you have noted something. Its just for you to remember my speech. Mediocre and momentum m, multilateralism and so i am on my second m which is momentum. That momentum is quite special because it requires a better balance in our policy toolkit using both the demand and supplyside of the economy. Those of you who study the economy know about this confrontation, controversy, debates between those that up like supplyside measures and those that are in support of the canadian on one hand and many others on the other upply. What we are saying is it has to be a mix of both and we have to use all the tools that are available. You have a good Basketball Team here. Its about the same thing as la olla is. You have to use all the players. Ts not just about attack. Its about defense. Its about moving the ball around so all players have to play their part in order to score. And its exactly the same with the economy. Each policy instruments must play its part in order to achieve this momentum. I will start with the first one which is the one that is the most visible and has been most effectively lately and thats the Monetary Policy. It has provided important support to demand and that has been the case when the fed decided to start quantitative easing measures and it has proved efficient. It has done a lot to push recovery. The ecb has done quite a lot as ell. There are different moments of the cycle. The bank of japan is doing a lot. The bank of england, so all the major Central Banks of advanced economies have pushed that ool. But Monetary Policy alone does not suffice. Its as if you had a great defense play but thats it. You dont score. Plus the longer easy monetary policies continue the greater the risk of fueling financial excess so this needs to be monitored and managed. Equally important as i mentioned earlier are the prospects of exiting from that new Monetary Policy. Because it will have implications for other parts of the world. Hese implications, thats what they call the spillover effects and the peel back when in boos boos back to the domestic market that needs to be monitored, that needs to be managed. They need to cooperate and talk to each other extensively. A going to judge to explain see hat we mean by that. We believe that intelligence fiscal policy kahlo calibrated double welldesigned can actually help boost growth and jobs. But to mean by that . I am not suggesting a new stimulus package because that is ot the answer. But what i am suggesting is that because so much has already been done in terms of fiscal onsolidation, countries that still need to put their finances n order have to do so at the right place, not too fast, not too brutally, and they have to adjust his circumstances and taken into account. And this is clearly what we do in the programs that we designed. We dont push countries into dasheen brutally. The pace is important, a sense of pace. Second, they have to be well targeted because if so they can contribute as well to boosting rowth. For a sense, fighting to oxidation. Support more efficient public spending, reduce the burden of taxation and charges of labor ost, parole taxes, for instance, are clever fiscal measures that can be taken. So it is a sensible next. The third one, and i come to my environmentfriendly measures we have worked hard and made strong recommendations concerning the reform of Energy Subsidies and really believe that iran and 2 trillion is spent on subsidizing people to use energy and predominantly Profile Energy now, this is not particularly smart qaeda from a fiscal point of view, a social point of view or an nvironmental point of view because those who benefit subsidies in most of the ubsidies of those in the least popular theyre usually the 10 wealthiest in the population that actually consume a lot of energy and therefore require subsidies not suggesting that they be removed altogether without paying attention puente people who are really in need. The we are suggesting that additional revenue can be generated out of the subsidy removal program. As of this Group Policies can actually be job of Legal Environment friendly. Again, this is only some of the players begin a subsidy for imported reforms that need to deal with deepseated obstacles the Structural Reforms would challenge the we talking about . Predominantly in the advanced economies go but up only the advanced economies. We are dealing with the challenge of creating jobs for those people looking for the man making sure that those are coming to the job market in all cultures of the world have the means to access it and make a living end of it we currently have about 200 Million People looking for jobs of which 759 of under the age of 25 to win and that is a we should focus on. Focusing on the fact that apart from the 01 percent of the wealthiest in canada has been stagnant for most. You quoted me put it is not just a moral issue good that Sustainable Growth with the labor market that works better. Some people think its not right. There are countries that have tried and have succeeded. If you look, for instance, at some Labour Market policies is inside then successfully captures of germany, countries like esther oyer, countries like sweden. There is no magic recipe because it has to be specific predestine deal with the particularities of the skill set to the educational system and, indeed, the kind of growth and the kind of Growth Drivers that each country has with the second example of pulses that being put in place finally, policies that encourage women to join the job market. And that just came back from japan. I was delighted to see that the Prime Minister is not just talking about it but putting a budget on increasing the number of Child Care Centers that will be available for japanese three will be able to join the market. An aging country like japan or korea which is also trying the same thing, is critical. All potential be used and that those who want to join the market can actually join. They have to take place in the open end of markets that have een predominantly nicely protective of those who had access to it. There are many catchers are on the world where if you want to be a taxi driver, if you want to be a lawyer, notary, pharmacist or other protected professions you would not have access. Again, without the uprising by their health or safety those reforms have to take place. Ut the reforms will only go so far this money slows to a lot of fun to be norris cannot access credit. And that is where we believe we will support that. We believe that banks have to revisit their Business Model. Hopefully supported by the appropriate forms of the insolvency and bankruptcy laws which have to help them clean and strengthen their balance sheet, but they will have to revisit their Business Model and focus on actually making sure that credit flows within the economy and that we do not have this unpleasantness between what some call a real economy and the financial economy parisians and as i said to me know, it is not a onesizefitsall, one learning from everything that we are seeing at the moment. So connected proven have been talking about it as a result of globalization. The situations are countrys pacific in terms of cooperation between the players. All right i want to mention one other area where we believe that clouds can be put stop because the shortterm demand can be helped and the lager term Growth Potential can be also remedied. And i am talking here about investment in infrastructure Public Investment but also Public Investment. Because when you look at the damage caused by the financial crisis to use the data we have calculated for the g20 countries. Nbc that the g20 countrys gdp is 8 percent lower than it would therwise a been. That is a big number. Theres a bigger member permit a short fall in investment is much higher, nearly 20 below. So it is no surprise that in most advanced economies when you use airports, electricity, intemperance, so on and so forth, it is release suboptimal. Why is that . Because the Public Investment has been depleted overtime. You should compare the level of investment back in the 80s. It was about, you know, 4 of gdp. It is now out of 3 percent of gdp. Hat is a big number. How many of you cycle . Come on. Hands up. I am cycling. So you know what i am going to talk about. And it is not just me cycling. It is not use cycling. It is the American Society of Civil Engineers estimates that n washington d. C. , i did that f the agent of and supported scott 1 6. To do that. Bleeped keith some estimates place spending on infrastructure up 6 trillion over the next few years, 6 trillion. Now, it is nice to have better roads and, but it is far more important in some of the low income and developing countries that they have transportation, that the harvest does not to sit in the field because it cannot be transported to the port. The lowincome developing countries have electricity available so that they can power their machines and equipment. So investment in infrastructure is an imperative across all economies, not just lowIncome Countries, emerging countries where there are bottlenecks but also in the advanced economies. It will be different. We will be country specific. For some it will be about maintenance. For others it will be about greenfield investment. One thing is for sure across the mall there will have to be a focus on the efficient spending because the moment you talk about Public Investment in infrastructure you have to focus on it being efficiently spend. Now, one final point on infrastructure, and i am going to quote a number that is mentioned by the Global Commission on the economy and climate that indicates that integrating lower emission standards into Infrastructure Investments could cost only a tiny fraction of the overall project investment. For a half percent. So efficient investment, especially at the time of historically low Interest Rates can be good for growth, good for jobs, and good for the environment if it is efficiently designed. So we talked about the new risk. We talked about the momentum. I would like to talk a little bit. This is what actually gave the Incredible Energy to the founders of the Bretton Woods institutions, the imf and the world bank. Multilateralism was the principle on which the military chaos postworld war two has been avoided. Multilateralism is always what has animated the leaders of the g21 it was a question of fighting the terrible financial crisis that we head back into the snake and of which we are suffering the legacies. That multilateralism is what we need in. Now, you will say, why would that be need . Okay. I will give you a few examples. But as policymakers get together to sort out the Financial Sector to regulate it better, to supervise it better, they have to cooperate. They assess Monetary Policy. They have to cooperate because they have to be mindful of not only the effect at home but the spillover affect a broad. When they put together safety nets just in case they cant do it in isolation. It has to be accorded effort. And when there was Strong International institutions like the imf to be in a position to bring them together as they will next week but also to be together to provide budgetary support to guinea, liberia, sierra leone, they have to be together and cooperate. And it is for that very reason that i hope that the United States of america will actually ratify the governments of reform. So much wanted to happen back in 010 and which is currently stuck between the legislative and the executive branch because the imf has to be representative of the economy in the changes in the economy. North to kuwait has to be financially solid to respond in case their is a crisis. Because we are an institution that is capable of adopting, adjusting to new circumstances. We have done it. When the crisis hits we have to very surely change from our inancial instruments to invent new ones, put in place programs and Lending Conditions of zero percentage straight for the owIncome Countries not having hose programs. The more focused. We have to adjust our analysis and thinking as well. We have to enlarge. Brady said the bilateral surveillance. Together with the multilateral analysis. We have to adjust from seeing the Exchange Rate roughly the the talkedabout to being in a position to provide surveillance, to provide monitoring as we will do oncerning the 2 percent growth objective that this trillions of set for veggies 40 to providing Capacity Building got to providing training and technical ssistance. We do that using what i will mispronounce. A see it in my veins. Online Education System from which 2,000 Civil Servants and others have graduated in the last year. And trying to compete with you, president. The sustainability analysis. So we do that. As i said, which diet to constantly adjust to the needs f our. As i like to say sometimes the way it is not your father. Is you. Not together as we look forward to the future, as we just i hope that together we can actually pushed the clouds out and see a lot more of the blue sky then many people have far around the world. Thank you. Thank you very much. Agreed to honor georgetowns tradition not only by wearing this handsome start but by agreeing to take questions from our students. So we are going to bring out the microphone. I think that there might be one in the middle aisle. Would you please step up to the microphone, identify yourself, and as your question briefly so that everyone has an opposite of the task third question. Thank you. I am engineering college. The law says about International Development little bit and sort of your opinion, micro finance and Community Banking s new innovations. Critically important. You know, when i talk about exclusive growth is also based on inclusive finance. And micro finance Community Finances at the very base of finance or inclusion. As i am supportive of it. We encourage you were rican. I think that we are seeing some major developments the fuel their base on new technologies and the extensive use of sulfites in countries that have not seen fixed lines but where they use of self funds actually help with the moving of money round without corruption and can actually help those who want to start something predominantly women and actually do it whenever the official financing s not available. Hi. Thank you very much for coming to speak to us. Y name is marco. I am the freshman from switzerland here georgetown. I was lucky enough to have a conversation with former chancellor darling a few years ago. He made quite clear that he believes the only path to a genuinely sustainable Economic Union in europe was through Stronger Political union which falls into your multilateral aspects. Today this was soon, the politics. Dont ask what you think of that initial assertion and secondly, given the current, of possible lead is in that direction. You know, i think the only response is precisely starter corporation, a clear picture of what the leaders want to achieve together. You know, you have the euros on which is clearly a currency. You look at the euro, not bad. But additional layers are needed and have been built. Of talking about the fiscal year ou, the banking union. And where there has to be olitical union with a Brighter Future and people feel included so that they have a future and it is something exciting to do. What suggests that more and more throughout europe would go a long way to pushing the european ideal often project for the earth. Think it is where the response is needed. So. Thank you for speaking to us today. I am a canadian, a firstyear law student. I am requesting more about yourself and less about the imf. As an individual you have done so many courageous and often as a lot when youre the first to do them. So when youre young, like many of us here, what gives you confidence that Interest Rates reach further, take risks, and except new challenges. Then smell someone who has a great deal of responsibility and also experience. What continues to give you that conference and in the trength. Love. Very simple. It would be unkind to my parents of i did not say is of good health. You need that. You can work on. I see some of you sometimes turning around and xercising. Think it is also the basis on which you can develop that ove. Em papyrus and the finished a book by one of your countrymen. He finishes . Yes,. It only took about two months. Not a dismissive comment on my part. South could be wrong. Great, great information. My question is about a central thesis that in the long run, the returns on capital will always be greater than Economic Growth to what extent would that be, the mplication is going for a . We at the imf have done quite a lot of work on in the quality. Please that his Group Contributed to putting that topic in the limelight. This subject, but one that actually matters enormously for Economic Growth and dividend would not pass judgment on these overall pieces because for wondering about finished the book myself. And there is so much information and data. It would be unfair always trying to do that and dishonest. Ut what weve studied on the particular point of inequality is, well, too important conclusions. The first one is that excess of a quality is bad for Sustainable Growth. It is not conducive to Sustainable Growth. If we want Sustainable Growth which is the aim of, you know, all g20 leaders when they get together in excess of inequality has to be the target or one of the targets and the second finding is that contrary to conventional wisdom of distribution, redistributive policies actually did not harm Sustainable Growth. They are part of the toolkit this should be used up policymakers. Thank you. Hello. Thank you very much for coming to speak. International economics. Y question is what sort of relationship, if any, do you think that the imf should have with the new Development Bank . May i restrict your question to the contingency reserve marines are . That is really what is and more on the part, right . Youre talking about this initiative taken by the bridge countries. Direct. At think that the bank is more an initiative that is parallel all will play with the world bank and of the imf. What is being announced as something that is called the contingency reserve arrangements which is an arrangement where the Central Banks of the brick countries took together and related sub lines along themselves from which they can draw problems. I see it as an area for operation because in excess of certain thresholds that condition for the kutcher to access those contingency reserves is that there is an agreement with the imf. So we needed to continue to Work Together with regional Financial Arrangements of that nature. There is one in europe. The european stability mechanism is one. There is the general arrangement which has been put in place in south asia. And all of those provide more cooperation with the imf. Take you very much. Thank you for coming to speak to us. Seen here in he college my recumbent test your question together. A discussion about your comments regarding the need to improve efficiency in terms of of research reform. Realize that oftentimes the challenge to that is corruption within governmental officials, the distribution application. With regard to foreign aid to developing countries was steps in the imf take to reduce corruption . Youre right to point that out. I think the best remedy to that is transparency, transparency, ransparency. The opinion is often the strongest way to actually defeat orruption. And an nbc something that has not been made transparent by country with which we have a poor relationship to the chair lending money would just up wwor i want to hear what the imf is doing to reach out to populations and ensuring they are included in this very important part of economy and how addressing this issue might p us moving forward. We try to serve the entire membership and in our membership there are lots of countries that are low Income Countries and developing countries. I dont like to put them all in the same category because they are country specific. Andwhether a country has a Natural Resources available if they exploit those resources with the purpose of collective wellbeing or not to. Surrounded by countries it is a different story. Where the Economy Economic development has prosperity. O when we look at the various, the highest growth rates like southeast asia, with the Technical Assistance and training everything is focused on them to help lift them p. The education of girls and women is a critical factor in the development of those countries. Thank you. [applause] really have time for just one more question. Researching george show lot coming from portugal picking up 12 points the one about equality that is not a moral choice but that economic choice end the part to talk about the interventions made it a try to adopt those other Group Friendly or job friendly or environmental riendly. S those of measures used for budget cuts by portugal or greece or spain or italy or with the sensible applications of the quality . In supporting a reasonable pace. Theyre one of the members of the troika. Nd they were initially considered but having said that, those measures had to be taken in by gates is said to be restored and put together so those countries could finance themselves. Because when they face the economic crisis and solution keeps running. Because the markets had closed on them. But we also believe they have done a lot now moving into a direction of supporting growth to focus on what will create the obs that are needed. [applause] thank you very much for enriching our knowledge of the international Monetary Fund and encouraging us all to exercise more. That concludes our program. Would you please remain seated while the states party and president ial party exit the hall. Next q and a then David Cameron speaks. After that former ambassador and utah governor talks about gridlock in washington politics. Cspans 2015 student cam competition is under way. T will award 150 prizes toting 100,000. Videos need to include cspan programming and must be submitted by january, 2015. Grab a camera and get started today. This week on q a, our guest is johnetta cole, the director of the Smithsonians National museum of african art. She talks about her thoughts on Race Relations in america today. The last time i looked, you