A New Global Economy for a New Generation

A couple of logistical matters before I give thanks. The village of Shadbagh is fictional, though it is possible that one by that name exists somewhere in Afghanistan. If so, I have never been to it. Abdullah and Pari’s nursery rhyme, specifically the reference to a “sad little fairy,” was inspired by a poem by the late, great Persian poet Forough Farrokhzad. Finally, the title of this book was inspired in part by William Blake’s lovely poem, “Nurse’s Song.”

I would like to extend my thanks to Bob Barnett and Deneen Howell for being such wonderful guides and advocates for this book. Thank you Helen Heller, David Grossman, Jody Hotchkiss. Thanks to Chandler Crawford, for her enthusiasm, patience, and advice. Many thanks to a host of friends at Riverhead Books: Jynne Martin, Kate Stark, Sarah Stein, Leslie Schwartz, Craig D. Burke, Helen Yentus, and many more I have left unnamed but to whom I am deeply grateful for helping bring this book to readers.

I thank my wonderful copy editor, Tony Davis, who ventures way beyond the call of duty.

Very special gratitude goes out to my editor, the hugely talented Sarah McGrath, for her insight and vision, her gentle guidance, and for helping me shape this book in more ways than I can recall. I’ve never enjoyed the editing process more, Sarah.

Lastly, I thank Susan Petersen Kennedy and Geoffrey Kloske, for their trust and unwavering faith in me and my writing.

Thank you and Tashakor to all my friends and all the people in my family for always being in my corner, and for patiently, gamely, and kindly putting up with me. As ever, I thank my beautiful wife, Roya, not only for reading and editing many incarnations of this book but also for running our day-to-day life, without a whisper of protest, so I could write. Without you, Roya, this book would have died somewhere in the first paragraph of page one. I love you.

A New Global Economy for a New Generation

By Christine Lagarde

Managing Director, International Monetary Fund

Davos, Switzerland, January 23, 2013

http://www.imf.org/external/np/speeches/2013/012313.htm

Introduction: Priorities for 2013

Good evening. Let me begin by thanking my dear friend Klaus Schwab for the singular honor of addressing all of you.

I know we are all still deeply concerned with the state of the global economy. Where do we stand? Well, thanks to policy actions taken over the past year, we have seen some respite and some stabilization in financial conditions.

But it is not all good news. The recovery is still weak, and uncertainty is still high. As the IMF announced just a few hours ago in our World Economic Outlook, we expect global growth of only 3½ percent this year, not much higher than last year. The short-term pressures might have alleviated, but the longer-term pressures are still with us.

As I have said recently and it bears repeating: we have avoided collapse, but we need to guard against any relapse. 2013 will be a make-or-break year.

We all know the imperative—keep up the momentum on the policy actions needed to put uncertainty to rest.

What does that mean? For the Euro Area, it means making firewalls operational; pushing ahead with banking union; continuing with the difficult but necessary fiscal adjustment at the country level; and supporting demand, especially with further monetary easing.

For the United States, it means pulling together in the national interest and avoiding further avoidable policy mistakes, such as failing to agree on increasing the debt ceiling—and, for the United States and Japan, reaching agreement on medium-term debt reduction.

For the emerging and developing economies, faring better despite their concerns about continued turmoil and lack of decisive action in the advanced economies, conditions differ greatly. Some are more vulnerable than others, but they need to rebuild the policy space that has been used up in alleviating the crisis in recent times.

So these are the short-term priorities as I see them.

Date: 2014-12-29; view: 796