Three “Rosetta Moments” for the Global Economy in 2015
Christine Lagarde gave a speech to the Council on Foreign Relations about the outlook for the global economy in 2015.
The following are exercpts from the speech.
To read the speech in its entirety go to http://www.imf.org/external/np/speeches/2015/011515.htm
"The Council and the IMF have much in common: they both take a global perspective; they were both founded after global conflicts – World War I and World War II; and they both joined the perennial quest for a more peaceful and more prosperous world. I am glad to say that we are still on the same team!
Good teamwork and strong leadership will be needed this year. The latest update of our World Economic Outlook – with all the specific numbers – will be formally presented next week. But I can already say this: despite the boost from cheaper oil and stronger U.S. growth, we see the global recovery continuing to face a very strong headwind.
But before I delve into the details of the challenges ahead, I would like to share with you a brief story that has resonated with me.
Late last year, on November 12, a little spacecraft operated by the European Space Agency made the first-ever landing on a comet after a 10-year journey covering half a billion miles. Like millions of others, I was mesmerized by the sheer audacity of this adventure.
The touchdown on the comet, called 67P, was part of the ongoing “Rosetta” mission, which is led by a multinational team of scientists. Together, these scientists have extended humanity’s reach into the cosmos and, by doing so, they have enhanced our understanding of our own planet. They embody the spirit of those 19th century scholars who used the original Rosetta Stone to decode the ancient Egyptian hieroglyphs.
Why is this story relevant right now? Because this year the global economy will face what we might call three “Rosetta moments”. These are major policy challenges that require decisions based on political courage, decisive action, and multilateral thinking—in short, true global leadership.
The first Rosetta moment is all about boosting growth and employment in the next 12 months – overcoming that “strong headwind” that I mentioned. The second Rosetta moment is about achieving more inclusive, shared growth; and the third is about attaining more sustainable, balanced growth.
These three moments are, of course, deeply interconnected and mutually dependent. All are important, all demand strong leadership, all require cooperation. But – surely – if we can catch a comet in space, can’t we address the policy challenges here on Earth?"
Ms Lagarde goes onto to discuss three areas in depth:
1. Global outlook, risks, and policy actions – injecting new momentum
2. Structural reforms, infrastructure, and trade – generating more inclusive growth
3. Financial regulation, international development, and climate change – engendering more sustainable growth