WASHINGTON — In her first major address as managing director of the International Monetary Fund on Tuesday, Kristalina Georgieva pledged to continue her predecessor’s efforts to bring the institution’s tools to bear on those left behind by globalization and to deepen engagement in fragile and conflict-affected states.
“You want to be rich tomorrow? Invest in your people today”— Kristalina Georgieva, managing director, IMF
“In the last years the IMF has done something that I admire — and I will drive that in practical implementation — which is a very different approach to social policies,” Georgieva said at the institution’s headquarters in Washington, D.C.
“We need to know who are the vulnerable [people] to be impacted by policies, and we need to know how to protect them,” she said.
Georgieva, who is originally from Bulgaria, was selected to lead IMF on Sept. 29, after a contentious nomination battle. The former World Bank CEO and European commissioner for humanitarian aid and crisis management assumed her post on Oct. 1, becoming the first IMF chief from an emerging market country.
In her remarks on Tuesday, she highlighted the need to help countries target public spending toward human capital, reduce inequality, address climate change, and deliver tailored policy solutions to fragile states.
Under Georgieva, World Bank’s work on fragile states
“I think we need to recognize the speed of change and that our duty in public spending is to prepare nations to be better positioned in that fast changing world,” Georgieva said.
Countries have often ignored investing in people, under the assumption that people should invest in themselves, she said, adding that this has disadvantaged them in the global economy.
“People are becoming such an incredible ... competitiveness factor that it is, more than ever, a public good for the country. So, you want to be rich tomorrow? Invest in your people today,” Georgieva said, drawing particular attention to digital infrastructure, human capital, and research and development.
The international development community has been eager to see whether Georgieva’s extensive background in humanitarian relief and global development will translate into deeper involvement in those areas by the fund — a trend that former IMF Managing Director Christine Lagarde is widely credited with encouraging.
“Before Kristalina’s name was made public ... we were quite concerned about what could happen with the agenda that Christine Lagarde had laid out. She had really been a champion on the issue of gender, inequality, climate change. I think in some ways Kristalina can take that and run with it,” Nadia Daar, director of Oxfam International’s Washington, D.C. office, told Devex prior to Georgieva’s speech.
During Georgieva’s tenure at the World Bank, the institution significantly increased its financing to fragile states and played a much larger role in humanitarian crises, including by offering concessional loans to refugee-hosting countries. Georgieva suggested on Tuesday that the fund could work more closely with the bank and apply its fiscal policy tools to fragile and conflict situations.
“Obviously the fund has to play on its strength, and the strength of the fund is in monetary, fiscal, structural policies — bringing that understanding in situations of fragility,” Georgieva said.
“Working with the bank, and actually working with humanitarian agencies that are grounded in these countries, gives us a much better chance to turn the fate of people around,” she added.