IMF chief Christine Lagarde on Sunday gave a clarion call for countries to create the required environment for job creation, warning that unemployment can trigger dangers of youth radicalisation and deeper poverty.
Asserting that memories of the 2008 financial crisis are “still alive and not gone away”, Lagarde, the managing director of the International Monetary Fund (IMF), underlined the need to learn lessons from the recent global shift towards protectionism. “People without jobs can lead to conditions like countries going deeper into poverty and radicalisation,” she said.
In his address to the World Economic Forum (WEF) in Davos last month, Prime Minister Narendra Modi had said “many countries are becoming inward focused and globalisation is shrinking and such tendencies can’t be considered lesser risk than terrorism or climate change”. Lagarde was speaking at a session entitled ‘Navigating a Shifting Global Landscape’ on the opening day of the fifth World Government Summit 2018 here.
Besides Prime Minister Modi, Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai, and Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, Deputy Ruler of Dubai were present at the session. “Memories of the 2008 financial crisis are still alive and not gone away,” she said, adding that a focus on resilience, which includes economic diversification, is key for governments to prepare themselves in these uncertain times.
She said that it should also be ensured that the global community makes efforts to prevent a crisis before it hits them rather than being ill prepared and work for a resolution when it comes.
Touching on other issues, Lagarde said policy makers need to focus their energies on those who have not benefited from globalisation and those who are at the risk of losing their incomes through future automation. “Globalisation has been largely a force for good –- it lifted millions out of poverty. Yet, to sell globalisation to democratic voters, honest facts, figures, and an actual assessment of the reality matters. Lifelong learning needs to be at the centre of any efforts to make globalisation work for everyone,” she said.
Speaking on regulation of markets and banking of financial companies and banks, Lagarde said there is need to regulate activities and not entities.