IMF head Christine Lagarde hopes Ottawa’s stimulus plan ‘goes viral’
OTTAWA — Christine Lagarde has some strong advice for developed nations and those still in the process: follow Canada’s lead if they want to create jobs, grow their economies and avoid the temptation to build trade walls.
“I hope it (Canada’s plan) can actually go viral,” the managing director of the International Monetary Fund said Tuesday.
“At the IMF, we have strongly advocated what we call the three-pronged approach,” Lagarde told reporters in Ottawa, standing alongside Prime Minister Justin Trudeau following a private meeting.
“Because growth has been too low for too long and for too few, we strongly believe — based on the analytical work that we do — that a combination of monetary policy, fiscal policy and structural reforms (can) enhance the capacity of the state to support the development of economic growth, to encourage economic enterprises to develop investment, to encourage innovation and creation of jobs,” she said.
“The policy adopted by Canada under the leadership of (Prime Minister) Trudeau is indeed demonstrating this three-pronged approach that we are advocating.”
Lagarde’s comments in Ottawa came the day after she spoke to an international economic gathering in Toronto, where she urged developed nations to do more to protect those who may be negatively affected by increased global trade.
The visit by Lagarde, previously France’s finance minister, has focused on concerns that globalization and the benefits of free trade have not been equally shared by a large portion of the world’s population.
“We need to make globalization work for all,” she said during a Toronto speech earlier Tuesday.
“Growing inequality in wealth, income and opportunity in many countries has added to a groundswell of discontent, especially in the industrialized world (where there is) a growing sense among some citizens that they ‘lack control,’ that the system is somehow against them,” Lagarde told a meeting sponsored by the C.D. Howe Institute, a Toronto-based think-tank.
Lagarde also stressed that governments must do more to help those who have been negatively impacted by globalization, including those who have lost jobs. To counteract that trend, the IMF chief said there needs to be more access to education and training.
In an address Monday in Toronto, Lagarde said “those who suffer from globalization need to be helped along the way.”
“We cannot just have growth that benefits some and leaves many without skills, without retraining,” she told those attending the International Economic Forum of the Americas.
Lagarde also raised the issue of increased protectionist views in reaction to globalization.
Those who suffer from globalization need to be helped along the way
There is a “growing risk of politicians seeking office by promising to ‘get tough’ with foreign trade partners through punitive tariffs or other restrictions on trade,” she said.
Such rhetoric has become popular fodder for U.S. Republican presidential candidate Donald Trump, who — along with Democratic nominee Hillary Clinton, to a lesser extent — is opposed the 12-nation Trans-Pacific Partnership, which President Barack Obama has already signed off on.
The positions of the U.S. candidates on the North American Free Trade Agreement appear to be wider apart. Trump has said he wants to tear up the 1994 deal and start negotiations over again, while Clinton has drifted toward the protectionist camp but remains fuzzy about details on how to improve the U.S.-Canada-Mexico pact.
Trudeau, speaking to reporters Tuesday in Ottawa, said Lagarde’s three-pronged initiatives “are goals that Canada shares.”
“I know that our team is committed to being a strong partner for the IMF and working with Madam Lagarde on a wide range of issues including gender equality, on which she has been a leader throughout her career.”