Remarks to World Economic Forum
Kristalina Georgieva, Managing Director, IMF
So, what would it take for historians to look back at this crisis as the moment of a Great Reset?
From the perspective of the IMF, we have seen a massive injection of fiscal stimulus to help countries deal with this crisis, and to shift gears for growth to return. It is of paramount importance that this growth should lead to a greener, smarter, fairer world in the future.
Governments can put in place public investments—and incentives for private investments—that support low-carbon and climate-resilient growth.
I am particularly keen to take advantage of the low oil prices we see today, to eliminate harmful subsidies and introduce a carbon price that would work as an incentive for future investments.
Second, let me talk about smarter growth. We know the digital economy is the big winner of this crisis. But we must not allow the digital divide to widen so that some countries and communities fall further behind. This would bring more pain than gain in the future.
So, it is critical that institutions like the IMF support investments that will shrink the digital divide—working in partnership with the World Bank and others.
We also need to think carefully about how to make sure the jump in growth and profitability in the digital sector leads to benefits that are shared across our societies.
We know that—if left to its own devices—this pandemic is going to deepen inequality. That has happened in prior pandemics.
We can avoid this if we concentrate on investing in people—in the social fabric of our societies, in access to opportunities, in education for all, and in the expansion of social programs so we take care of the most vulnerable people. Then we can have a world that is better for everyone.
Founder and Executive Chairman, World Economic Forum
Every country, from the United States to China, must participate, and every industry, from oil and gas to tech, must be transformed. In short, we need a “Great Reset” of capitalism.
The Great Reset agenda would have three main components. The first would steer the market toward fairer outcomes. To this end, governments should improve coordination (for example, in tax, regulatory, and fiscal policy), upgrade trade arrangements, and create the conditions for a “stakeholder economy.”
This means, for example, building “green” urban infrastructure and creating incentives for industries to improve their track record on environmental, social, and governance (ESG) metrics.