...urges US, oth­ers to re­ject ‘dystopian’ path

Daily Observer (Jamaica) - - INTERNATIONAL -

WASH­ING­TON, United States (AFP) — Coun­tries that go it alone and fail to adapt to new eco­nomic re­al­i­ties could face a “dystopian” fu­ture where an an­gry ma­jor­ity is left be­hind, IMF chief Chris­tine La­garde warned yes­ter­day.

She urged world lead­ers to re­mem­ber the les­son of the global re­ces­sion that fol­lowed the 2008 fi­nan­cial cri­sis: “In­ter­na­tional co­op­er­a­tion is es­sen­tial, not op­tional.”

The manag­ing director of the Wash­ing­ton-based global cri­sis lender is­sued yet an­other plea to gov­ern­ments, no­tably the United States, to back away from pro­tec­tion­ism and con­fronta­tion.

At a time when US Pres­i­dent Don­ald Trump is en­gaged in global trade con­flict that the IMF says puts world eco­nomic growth at risk, La­garde said she is pleased by the “sig­nif­i­cant progress” over the week­end to defuse the Us-china trade dis­pute.

But asked about the sharp de­cline in US stock mar­kets — which fell more than three per cent due to con­cerns over the trade war and the im­pact on the econ­omy – La­garde urged pa­tience.

“Com­pared to what we’ve gone through it’s progress,” she said.

La­garde de­liv­ered her mes­sage about the need for global eco­nomic co­op­er­a­tion wrapped in praise for the key lead­er­ship role the US plays in the world.

In the eco­nomic pros­per­ity that fol­lowed World War II, “We learned from the past, got creative, and changed for the bet­ter,” she said in a lec­ture at the US Li­brary of Congress.

“None of this would have been pos­si­ble with­out the United States. This coun­try chal­lenged the in­ter­na­tional eco­nomic or­der when it needed chal­leng­ing. It forged com­pro­mise when com­pro­mise was nec­es­sary.”

And it was in the US in­ter­est to take a lead­ing role be­cause “a stronger and more sta­ble world paid div­i­dends for the US,” she said.

“This suc­cess did not come at the ex­pense of other na­tions,” La­garde said. “On the con­trary. This coun­try’s col­lab­o­ra­tive lead­er­ship paved the way not only for decades of op­por­tu­nity here in Amer­ica, but also for growth that spread across the world.”

That con­trasts sharply with Trump’s “Amer­ica First” rhetoric and his view of trade as a zero-sum game in which im­ports equate to coun­tries tak­ing money out of the coun­try.

Poli­cies like that could lead to an “age of anger”, where in­equal­ity soars and mil­lions are left be­hind, La­garde cau­tioned.

Much of the anger erupt­ing world­wide and the eco­nomic anx­i­ety “is a legacy of the cri­sis”, she said in re­sponse to a ques­tion.

In Bri­tain, it was chan­nelled into fear of for­eign­ers and led to Brexit, but she said there is “more re­gret in the UK than there was only six months ago,” as the con­se­quences of leav­ing the Euro­pean Union be­come apparent.

To avoid the “dystopian sce­nario”, coun­tries must adapt, im­prov­ing co­op­er­a­tion among gov­ern­ments, to strengthen over­sight, re­duce cor­rup­tion and re­form tax col­lec­tion. That will free up re­sources to im­prove in­fra­struc­ture and ed­u­ca­tion.

That also means fix­ing the trad­ing sys­tem to re­duce ten­sions, in­clud­ing getting rid of sub­si­dies and pro­tect­ing tech­nol­ogy — is­sues Trump has com­plained about.

The rapidly chang­ing global econ­omy of­fers “a fun­da­men­tal choice: stand still and watch dis­cord and dis­con­tent bub­ble over into con­flict, or move for­ward”, La­garde said.

“Be­cause more than ever be­fore, what hap­pens in one na­tion can im­pact all na­tions.”

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