Speech

Managing Director's IMFC Press Conference Opening Remarks

October 15, 2020

Thank you, Lesetja, for summarizing the key outcomes from our latest IMFC meeting. Before I touch on a few issues, let me congratulate you. You have served the IMFC and the international system extraordinarily well and with great distinction under your three-year term[1]. Well done. You are a great colleague and friend. 

We broadly agreed this week that this has been a crisis like no other and that it calls for steps to enable a recovery like no other. 

I feel encouraged that the IMFC remains so steadfast in its support of the countries and people across our entire membership. In three broad policy areas in particular: 

(1) Continue with essential measures to protect lives and livelihoods. Stepping up vital health measures is imperative, as is well-targeted fiscal and monetary support to households and firms. So the IMF’s message from these Meetings is clear: avoid premature withdrawal—pulling the plug too soon risks serious, self-inflicted harm.

(2) Build a more resilient and inclusive economy. Public investment—especially in green projects and digital infrastructure—can be a game-changer. It has the potential to create millions of new jobs, while boosting productivity and incomes.

(3) Deal with debt. Global public debt is projected to reach a record high of 100 percent of GDP in 2021. This is partly because countries rightly need to boost spending to fight the crisis and secure the recovery. Addressing this issue over the medium-term will be critical. But for many low-income countries, urgent action is required now. 

In this context, I want to especially welcome two significant ‘deliverables’ from the G20 and endorsed by the IMFC: 

First, the agreement to create the Common Framework for handling sovereign debt treatments beyond the DSSI. This will be an important advancement in the international architecture for resolving sovereign debt matters in an orderly way. As you may recall, the IMF has raised several issues with improving the architecture so we can have fair, quick, relatively simple, relatively low-cost resolution of unsustainable debt. This Common Framework is a significant step in the right direction.

The second ‘deliverable’ is the extension by the G20 of the DSSI for at least another six months from the end of 2020, and for the option to extend it further if necessary. In addition, and again as the IMF has been emphasizing, further private sector participation is still needed—and remains an outstanding issue.

One additional point before we take your questions:

Lesetja noted we need strong international cooperation—especially on vaccine development and distribution. Faster progress on medical solutions could speed up the recovery; it could add almost $9 trillion to global income by 2025. This, in turn, could help narrow the income gap between richer and poorer nations. The value of cooperation right now cannot be overstated. 

Thank you.

[1] IMFC chair’s term expires January 17, 2021.