• Fri. Apr 16th, 2021

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View From the I.M.F. — In a Crisis Like No Other, Gender Still Counts

— Kristalina Georgieva, managing director of the International Monetary Fund


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When the International Monetary Fund updated its World Economic Outlook in late June, it predicted the global economy would shrink by 4.9 percent this year.

The impact of job losses and business closures would be “scarring,” the I.M.F. stated, and social distancing and new safety standards as businesses reopened would weigh down economic activity.

To put it mildly, it was not good.

“We are definitely not out of the woods,” the I.M.F.’s chief economist, Gita Gopinath, said at the time. “This is a crisis like no other and will have a recovery like no other.”

Two months on, little has changed.

The I.M.F.’s core job is to monitor the global economy and provide loans to countries that are struggling to meet their debt obligations. Naturally, the current crisis has escalated these concerns to almost unimaginable levels.

Still, Kristalina Georgieva, the head of the I.M.F., manages to sound upbeat. Elected last September after Christine Lagarde left to become president of the European Central Bank, Ms. Georgieva is a self-described optimist. A “pragmatic” optimist, to be clear, as she put it: “One who believes that optimism has to be fed with success and that success happens when actions are calibrated properly to expectations.”

The I.M.F.’s lending capacity is now $1 trillion, up from $250 billion before the 2008 global financial crisis. Its current exposure is about $250 billion, of which $75 billion was approved between the end of March and the end of June.

Ms. Georgieva sat down with In Her Words to discuss the role the I.M.F. has played in the crisis so far, and the I.M.F.’s commitment to supporting women globally as well as within the fund itself.

The conversation has been condensed and edited for clarity.

Let’s start with the basics. During this crisis, how are financial packages meted out by the I.M.F. and what factors are taken into account?

In a crisis like no other, our response is to lean forward, to provide emergency financing, especially to countries that are faced with the toughest circumstances, that are highly dependent on exports of commodities or tourism, with high levels of debt, or very fragile economies. Because this is an exogenous shock, we are not going to ask for the traditional I.M.F. conditions. Instead, we ask only two things: Please pay your doctors, your nurses, improve your health system and help the most vulnerable people and the most vulnerable parts of the economy. And then please keep the receipts. In other words, be accountable to your citizens for the money the I.M.F. has extended to you.

Of course, we cannot lend to countries if their debt level is so high that we are just making it harder.

At the I.M.F., our membership did come together. Our advanced economies extended more financial capacity for us. They gave us money for grants. Twenty-nine poorest members of the I.M.F. now do not have to pay us back to serve their loans because of these grants. And when we asked that our membership triple our concessional financing capacity, they did it in record time — in two months — and they actually gave us even more.

You’ve spoken before about the importance of a country’s “strong fundamentals” when it comes to weathering a crisis. What do you mean by strong fundamentals?

When we talk about strong fundamentals, we mean countries putting in place policies that are conducive for growth and employment. They are transparent. The government is accountable to the citizens, and the fiscal balance is what any responsible family would do with its own finances: You spend only as much as you can afford. Countries that borrow invest the money they borrow into productive assets like education, human capital, health, infrastructure and the conditions for the private sector to flourish.

In March, there was such a panic that nobody would lend money to anyone, good fundamentals or bad fundamentals. In April, the markets opened up once advanced economies put in big financial packages. For countries with strong fundamentals, borrowing at low cost once again became possible.

You have championed gender responsive fiscal policies like subsidized child care and parental leave. Why?

The reason we should do that is crystal clear — because it makes sense for everybody. The economics of gender equality is a book already written: My former institution, the World Bank, calculated that if we were to wake up tomorrow with men and women equal, the world’s wealth would be $172 trillion bigger. And we know women on the boards of companies means the companies are stronger. Their performance is better.

But above all, in this crisis, we need to remember something that Eleanor Roosevelt said, that women are like tea bags — they get stronger in hot water. And it is so very true. I see it in my daily decision-making that women are actually very resilient to these kinds of shocks. And they also have more empathy for the most vulnerable.

But we risk walking back on what we have actually moved forward on. We can easily let go if we don’t pay attention. Gender equality doesn’t fall from the sky. It has to be written into policies, and it has to be fought for.

Unpaid labor is a huge economic blocker for women. Can you imagine a time when unpaid labor might be factored into GDP?

Well, that is a longstanding question.

The crisis is an opportunity, and we do need to rethink our economies for the future. We need to also rethink the data that informs our decisions.

How can I.M.F. specifically support women’s participation in the economy?

My predecessor, Christine Lagarde, was a great champion for gender equality. It started during her time, and I’m running with it. The I.M.F. has already provided support to 105 countries to integrate gender into economic analysis and policymaking. In some countries, we made gender equality strategy a condition for I.M.F. financial support. That was done just before the crisis.

And now in the crisis, we are strongly advocating that as money is being directed, it has to go into the hands of men and women. And we stress women because they tend to be better stewards. And we stress that there are clear requirements of how the money should be used. We have introduced gender-based budgeting.

It is not just about women. It is about their families, their communities, their countries. When women do well, countries do well.

You have said before that the more we are together, the more resilience is amplified. How has this worked in practice?

I have seen time and again, if we zero in on where we can bring people together on the issues that unite us, rather than what divides us, we can come to a collective answer.

Now if you ask me, is this always the case, well, there are issues on which it is much more difficult to reach consensus, but then we can prioritize in a way that builds the confidence of the collective.

Look, the crisis is telling us something very simple. We are as strong as our weakest link, and it is so obvious we are in this together.

One of our problems is that unfortunately, bad news has a big mouth and good news is quiet. So part of my job as an optimist, as a believer in the goodness of people, is to amplify these voices of goodness.

So you are an optimist …

I’m a pragmatic optimist. I believe that optimism has to be fed with success and that success happens when actions are calibrated properly to expectations.

How does the I.M.F. specifically make sure women are not cut out of the picture?

I believe in transparency: Put out what you do for everybody to see, and walk your own talk.

Let’s face it, the I.M.F. still has some way to go. We have done a lot. Christine Lagarde broke the glass ceiling. I came through — no cuts for me. As the second woman, it was easier. And now I relentlessly pursue gender equality in our ranks, so we demonstrate the values we preach.

And I can tell you a piece of very good news: When I came, 25 percent of senior management were women. Ten months later, we have 35 percent senior women.

Is the goal to get to 50-50?

Fifty-fifty. We have over 40 percent women at different levels, but what matters always in an organization is the top. We have about 20 people right there at the top. When I was in the European Commission, we set the target, we met the target. At the World Bank, we set the target, we met the target.

We make better decisions when we have diverse perspectives. Especially for an organization like the I.M.F., having the empathy that women bring, having the experience of women sorting out all kinds of disputes, keeping the peace at home, all of that matters.

But also the professional, the analytical contributions of women and the analytical contributions of men — when they come together, we are so much better off.

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