My thanks to His Royal Highness the Prince of Wales and to Professor Schwab for bringing us together.
Now is the time to think of what history would say about this crisis. And now is the time for all of us to define our own role.
Will historians look back and say this was the moment of a Great Reversal? Today, we see very worrying signs.
One hundred and seventy countries are going to finish this year with a smaller economy than at the start of the year, and we already project that there will be more debt, bigger deficits, and more unemployment. And there is a very high risk of more inequality and more poverty.
Unless we act.
So, what would it take for historians to look back at this crisis as the moment of a Great Reset?
From the perspective of the IMF, we have seen a massive injection of fiscal stimulus to help countries deal with this crisis, and to shift gears for growth to return. It is of paramount importance that this growth should lead to a greener, smarter, fairer world in the future.
It is possible to do this. Provided that we concentrate on the key elements of a recovery—and act now. We don’t need to wait.
At the IMF, we see some tremendous opportunities.
First, let me first talk about green growth.
Governments can put in place public investments—and incentives for private investments—that support low-carbon and climate-resilient growth.
Many of these investments can lead to job-rich recovery—think of planting mangroves, land restoration, reforestation or insulating buildings. Think of the key sectors for reducing carbon intensity where both the public and private sector can invest.
I am particularly keen to take advantage of the low oil prices we see today, to eliminate harmful subsidies and introduce a carbon price that would work as an incentive for future investments.
Second, let me talk about smarter growth. We know the digital economy is the big winner of this crisis. But we must not allow the digital divide to widen so that some countries and communities fall further behind. This would bring more pain than gain in the future.
So, it is critical that institutions like the IMF support investments that will shrink the digital divide—working in partnership with the World Bank and others.
We also need to think carefully about how to make sure the jump in growth and profitability in the digital sector leads to benefits that are shared across our societies.
And that takes me to my third point— fairer growth.
We know that—if left to its own devices—this pandemic is going to deepen inequality. That has happened in prior pandemics.
We can avoid this if we concentrate on investing in people—in the social fabric of our societies, in access to opportunities, in education for all, and in the expansion of social programs so we take care of the most vulnerable people. Then we can have a world that is better for everyone.
I want to conclude with an example from the past. William Beveridge, in the midst of the Second World War, put forward his famous report in 1942 in which he projected how UK should address what he called the ‘five giant evils.’ That famous ‘Beveridge Report’ report led to a better country after the war—including the creation of the National Health Service that is saving so many lives today in the UK.
And my institution, the IMF, was created at this time as well—at the Bretton Woods Conference.
So, now is the moment to step up—and use all the strength we have—to turn the page. In the case of the IMF we have a one trillion-dollar financial capacity and tremendous engagement on the policy side.
This is the moment to decide that history will look back on this as the Great Reset, not the Great Reversal.
And I want to say—loud and clear—the best memorial we can build to those who have lost their lives in the pandemic is to build a world that is greener, smarter and fairer.