The director general of the IMF, Christine Lagarde, on the 28th September 2016 in Chicago ( AFP / Tasos Katopodis )
“set limits on the commerce is a fault in economic flagrant”, said the director general of the IMF in a speech in Chicago.
The warning comes at a time when the two main candidates in the us presidential election, Donald Trump and Hillary Clinton, have taken a position against the expansive free trade agreement being negotiated by the Obama administration with 11 countries in the Asia-Pacific region (TPP).
The republican candidate has gone further in calling to restore tariffs with Mexico or China and to denounce the trade agreements negotiated in the past.
In Europe, the protectionism also has the wind in the back since the voting british in favour of a Brexit, which has awakened the fears of a retreat into oneself widespread economic, while the free trade agreement TTIP discussed with the United States seems to be in deadlock.
“The solution to improve the fate of people cannot be a return to protectionism or other economic recipes of the past that have failed,” assured Ms Lagarde, a week before the opening in Washington of the annual meeting IMF-world Bank.
The World Economic Forum, the organizer of the Davos Forum, went in the same direction Wednesday, ensuring that the brakes to the economic opening as “a significant threat” to the competitiveness.
The decline of globalization “makes it more difficult for the leaders to build a sustainable and shared growth for all,” says the organization in a report.
Anger -
The director general of the IMF, Christine Lagarde, on the 28th September 2016 in Chicago ( AFP / Tasos Katopodis )
Ms Lagarde did, however, call the rulers to hear the anger and frustration of people who have suffered from the liberalisation of trade and saw inequality worsen.
“We continue to be faced with a global growth too low for too long, and that benefits far too few people”, has detailed Ms Lagarde.
in order To remedy the perverse effects of globalization, the patron saint of the IMF calls for helping the workers affected by “offshoring, outsourcing” and the emergence of new technologies.
public investment “well-targeted” in education should also, according to the company, to improve the prospects of disadvantaged populations.
“there is no miracle cure, ( … ), but if we want to keep globalization alive for the next generation, there is no other choice than to ensure that it is of benefit to all”, said Ms Lagarde.
The economic challenge is of size. The recovery from the 2008-2009 financial crisis remains slow and poor and the IMF could be next week again lowered its growth forecasts.
“In recent years, the global recovery has been weak and fragile and this continues to be the case,” says the leader, who was escorted to the head of the IMF last July.
The difficulties encountered, notably in Europe, adds “uncertainty” and fear of a renewed financial volatility due to divergent monetary policies, ” noted Ms. Lagarde.
The geopolitical tensions may also exacerbate the situation. “Terrorism and the influx of refugees pose a danger that it is difficult to quantify and even more to mitigate”, she added.
The current economic downturn is certainly not comparable to the 2008 crisis but it is more “pernicious” and could prove to be very “toxic”, according to Ms Lagarde.
The patron saint of the IMF notes, however, some grounds for optimism, particularly in emerging countries. China and India continue to be the locomotives of global growth, with annual progression around 6-7%.
Mired in recession, Brazil and Russia seem to also show “some signs of improvement”.
As usual, Ms. Lagarde pleads for a revival, mixing levers, fiscal, structural and monetary, but primarily calls for a better coordination between countries, citing… the legend of the american basketball Michael Jordan.
“talent win games but team work and intelligence do win championships”, said Ms. Lagarde, echoing the words of the former star of the Chicago Bulls.
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