At the IMF-WB Annual Meeting in Tokyo, Christine Lagarde, Managing Director, International Monetary Fund, outlined the three megatrends the world economy is witnessing right now.
- Demographic changes: Rising number of young people in developing countries and graying population in advanced and major emerging economies; more women participation
- Shifting economic power: Economic power is gradually shifting from west to east; the south is witnessing increasing level of prosperity
- Efficiency, productivity and connectivity with ICT: Nearly 3 billion people are connected to the internet and entrepreneurs with global reach are emerging out in developing countries
She proposed three strategies to move ahead against the backdrop of the current phase of global economic uncertainty:
- Looking beyond the crisis: Accommodative monetary policy; the right pace of fiscal adjustment, mindful of not undercutting growth but with solid and realistic plans to bring debt down over the medium term; finishing the banking sector clean-up; and structural reforms to boost productivity and growth
- Creating a better financial system and complying with new banking capital and liquidity requirements
- Inequality and inclusive growth: Focusing both on efficiency and equity-- fairness in sharing the burden of adjustment, and protecting the weak and vulnerable; better financial inclusion; better transparency and governance
On similar note, read World Bank Group President Jim Yong Kim's speech on the need to move forward with an aim to alleviate absolute poverty and ensure shared prosperity.