Lagarde urges US, oth­ers to re­ject pro­tec­tion­ism

Times of Oman - - MARKET -

WASH­ING­TON: 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, In­ter­na­tional Mon­e­tary Fund (IMF) chief Chris­tine Lagarde warned on Tues­day.

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.”

– File pic­ture

Chris­tine Lagarde.

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