F&D Magazine: A Mother’s Example


By: Jeffrey Hayden, Editor-in-Chief

FD June CoverNazareth College was my second home. As a child, I spent countless evenings roaming the small liberal arts college in Rochester, N.Y., where my mother headed the office of graduate studies and continuing education.­

Most of her students worked day jobs, attending class at night. For her, this made for late hours at the office—and for a complex juggling act: off to work in the morning to manage a staff, drop everything at 3 p.m. to rush home to fix dinner for the family, and then back to work around 5 p.m.—with me in tow—to staff the office until evening classes let out. Sleep and then repeat. This was the rhythm of my childhood.­

I thought a lot about those days as we put together the special feature on women at work in this issue of F&D—about her example, and about the many women who share in her experience and the many who do not.­

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An Open and Diverse Economy To Benefit All Algerians


Christine LagardeBy Christine Lagarde

(Version in عربي)

I was in Algiers last week, my first time as the Managing Director of the IMF. It was a good visit: we reaffirmed the special partnership between Algeria and the IMF, and I was able to gain a deeper insight into Algeria’s aspirations—and also its challenges in reaching a hopeful future.

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IMF’s Christine Lagarde on the U.S. Fiscal Cliff


by iMFdirect

The head of the IMF Christine Lagarde has weighed in on the ongoing U.S. fiscal cliff debate. Three weeks before a series of automatic tax increases and spending cuts are due to kick in if lawmakers don’t reach a new deal, Lagarde said she favors a comprehensive fix, rather than a quick one.

“My view is that the best way forward is to have a balanced approached that takes into account both increasing revenues and cutting spending as well.”

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Sendai: A Tale of Natural Disaster, Resilience, and Recovery


in SendaiBy Christine Lagarde

Japan was struck, in the mid-afternoon of Friday, March 11, 2011,  by the country’s largest ever recorded earthquake. Within an hour, parts of Japan’s northeast coast were hit by a wall of water that swept away cars, boats, trains, buildings, roads—and thousands of lives.

It was with humility and respect, then, that I visited parts of the affected area more than 18 months on, in a special event this week in and around Sendai—the Japanese city most affected by the disaster, a couple of hours by train north of Tokyo. This “Sendai Dialogue,” cohosted by the Government of Japan and the World Bank, was part of the overall IMF/World Bank Annual Meetings being held in Tokyo this week.

Disaster turned to success

I went to two areas around Sendai—the first was the Arahama Elementary School, site of a successful evacuation during the disaster. The school is still in its wrecked state—just as it was straight after the tsunami struck. Debris is strewn all over the grounds–a mangled mass of vehicles resembling more a scrap yard than a school. The corridors and classrooms inside are also in ruins.

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Promoting Multilateral Solutions for a Globalized World


Jeremy CliftBy Jeremy Clift

(Version in Español عربي)

We live in an increasingly globalized and interconnected world, helping to spread ideas, information, and technology ever more quickly. The globalized economy has created a complex and interlocking network of capital and trade flows that have brought major economic gains, lifting hundreds of millions of people out of poverty around the world.

But, as we have seen from the prolonged global financial crisis, our interconnectedness carries grave risks as well as benefits. With instant communication comes the risk of rapid contagion. There is, thus, a strong public interest in ensuring that global economic integration is supported by a coherent set of coordinated national macroeconomic policies and a harmonized international regulatory regime that addresses the fragilities in our global financial system.

The new issue of Finance & Development magazine looks at different aspects of interconnectedness. Kishore Mahbubani, dean of the National University of Singapore’s Lee Kuan Yew School of Public Policy and author of the forthcoming book The Great Convergence: Asia, the West, and the Logic of One World, argues that what he terms the global village increasingly requires global solutions to big emerging problems such as climate change.

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Latvia Beat the Odds—But the Battle Is Far From Over


By Mark Griffiths

Latvia, a nation of about 2.2 million people bordering the Baltic Sea, went through the most extreme boom-bust cycle of the emerging market countries of Europe, and was among the first to ask for financial assistance from the international community.

Back in the dark days of December 2008, many doubted that Latvia—which joined the European Union in 2004 together with its Baltic neighbors Estonia and Lithuania—would be able to stick to the tough economic program it had just agreed with the IMF and the European Union. But it did. Against the odds, it successfully completed its IMF-supported program in December 2011.

Over the past three years, I have worked closely with the Latvian authorities in my capacity as IMF mission chief. Worked with them—but learnt from them too.

A successful comeback

Today, Latvia is one of the fastest growing economies in the European Union. Real GDP grew by 5½ percent in 2011, and is now projected to expand by 3½ percent in 2012, a number that possibly will come out even higher.

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Fiscal Consolidation: Striking the Right Balance


By David Lipton

(Version in Español, in عربي)

The debate on austerity vs. growth has gained in intensity, as countries in Europe and elsewhere struggle with low growth, high debt, and rising unemployment. In essence, policymakers are being asked to tackle a continuation of the worst crisis since the Great Depression.

This would be no easy task under any circumstances. But it is made considerably harder by the fact that a number of countries need to engage in fiscal consolidation simultaneously. Complicating the picture further is the fact that monetary policy in most advanced economies is approaching the limits of what it technically can do to stimulate activity, while global growth remains weak.

There is no getting around the need to reduce debt levels. High debt leaves countries exposed to interest rate shocks, limits their capacity to respond to future shocks, and reduces long-term growth potential.

At the same time, we all know that fiscal consolidation―reducing deficits by cutting spending or raising revenues―can and usually does stifle growth. With more than 200 million people out of work worldwide, and with growth in advanced countries forecast at a mere 1½ percent for 2012, getting the pace of consolidation right is therefore of paramount importance. So how do policymakers strike the right balance?

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How to Get the Balance Right: Fiscal Policy At a Time of Crisis


By Anders Borg and Christine Lagarde

Last autumn was a turbulent time for Europe. The debt crisis deepened and financial markets became embroiled in turmoil, driven by fears of widespread restructuring of public debt. The crisis has harmed growth, increased unemployment, and left a large number of people less protected.

We are now seeing some signs of stabilization. Most countries are reducing their deficits and even if debt ratios are still rising, the return back to fiscal health has begun.

The International Monetary Fund and the Swedish Ministry of Finance are hosting an international conference in Stockholm on May 7-8, with the purpose of sharing knowledge and providing guidance on the best way to achieve fiscal consolidation, and on the role that effective fiscal policy frameworks and institutions can play in this endeavor.

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Lagarde on Women in Leadership


At the Women in the World Summit in New York on March 8, International Monetary Fund Managing Director Christine Lagarde spoke to historian Niall Ferguson about the role of women in leadership around the world, saying it might be a safer place if more women were in charge. Men were bigger risk takers than women.

Lagarde: “World Economy Not Out of Danger Zone”


Although a derailing of the global recovery has been avoided, the world economy is still not out of the danger zone, IMF Managing Director Christine Lagarde said after the conclusion of the Group of 20 Finance Ministers and Central Bank Governors meeting in Mexico City.

“Over the last two days, we discussed the challenges facing the world economy and continued our deliberations over next steps and actions,” she said in a February 26 press statement.

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