In her address to the annual IMF-World Bank annual meeting in Washington DC, Christine Lagarde there was a need to tackle the problem of “excessive inequality”.
Strong safety nets providing direct support to vulnerable communities and fiscal tools were key, she said.
“Our research shows, for example, that some advanced economies could raise their top tax rates without slowing growth, which would provide resources for priority needs or debt reduction.”
There was also a need to realise the potential contribution of women – “an economic no-brainer”.
Empowering women and encouraging their participation in the labour market would be a “global game changer”, the IMF chief said.
“It would increase growth, reduce inequality and support diversity,” she said.
“Young girls as well as young boys will be a major influence on the world’s future.”
Young people’s concerns also needed to be addressed. A global youth survey had found that the issues of corruption and climate change top the list of their concerns.
Lagarde said the IMF had committed to stepping up the fight against corruption, which undermines growth in government and reduces the potential for growth.
“Our analysis shows that moving from high to low perceived corruption levels can increase public investment efficiency by 50% – and raise real per capita income by nearly one percentage point,” she said.
On climate change, Lagarde said there was an opportunity to reduce and eventually eliminate the public subsidies that support carbon-emitting fuels.
The IMF head also rounded up the impact of the fund’s work, telling members 127 country consultations had been conducted over the past year.
“We have also provided more tailored technical assistance and knowledge sharing. We have deployed to your countries thousands of missions to help raise public revenue more efficiently, monitor public spending in a more cost-effective way, manage your debt and regulate your financial markets.”
But Lagarde said the IMF could not stand still and needed to make progress, particularly on how to help low-income countries manage the effects of conflict and natural disasters.
