EconoMonitor

Christine Lagarde: Postcards From Asia

By Christine Lagarde—Managing Director, IMF:

Cambodia: Moving Beyond the Frontier

Cambodia is the first leg of my Asia trip. This is a country that has already grown by leaps and bounds, and now stands at the frontier of becoming an emerging market economy in the heart of the most dynamic hub of the global economy.

I could feel this energy and excitement everywhere. Cambodians, especially young Cambodians, have big dreams and substantial societal aspirations. They want dignity and respect, so that they can fulfill their potential, both as individuals and as a nation. They want to embrace the wider world and all that it has to offer. They want good governance and strong institutions, which are essential to underpin economic development, empower people and ensure that prosperity is broadly shared.

I heard these themes consistently—from inspiring women leaders, from dynamic young economists, and from the students at the Royal School of Administration, where I gave a speech on how Cambodia can keep its forward momentum.

I was very encouraged by my discussions with the authorities. I believe they are resolved to stay on the road of macroeconomic stability and economic growth, to invest in skills and education, and to lay down a firm foundation of good governance.

International Monetary Fund Managing Director Christine Lagarde (L) shakes hands with King Norodom Sihamoni (R) following their meeting at the Royal Palace December 3, 2013 in Phom Penh, Cambodia. Lagarde is on a three country visit to Asia. IMF Photograph/Stephen JaffeInternational Monetary Fund Managing Director Christine Lagarde (L) shakes hands with King Norodom Sihamoni (R) following their meeting at the Royal Palace December 3, 2013 in Phom Penh, Cambodia. Lagarde is on a three country visit to Asia. IMF Photograph/Stephen Jaffe

One of the highlights of my visit was a Royal Audience with King Sihamoni. I came away deeply moved by his thoughtfulness and compassion. This is a monarch who not only cares deeply about the welfare of his people, but is clearly passionately devoted to promoting the cultural and artistic heritage of his country—and Cambodia has a heritage second to none.

International Monetary Fund Managing Director Christine Lagarde watches school girls in the computer room at Toutes à l’Ecole school December 3, 2013 in Kandal province of Cambodia. Lagarde is on a three country visit to Asia. IMF Photograph/Stephen JaffeInternational Monetary Fund Managing Director Christine Lagarde watches school girls in the computer room at Toutes à l’Ecole school December 3, 2013 in Kandal province of Cambodia. Lagarde is on a three country visit to Asia. IMF Photograph/Stephen Jaffe

I was truly touched by a visit to a school run by an NGO that is focused on educating girls and young women. These beautiful young girls come from underprivileged backgrounds, and are being granted a first-rate education in a zone of safety and security. They are being given an opportunity to obtain the tools for a better future, have their voices heard, and make their mark; an opportunity that for many of them would be but a dream without this unique school.

I told everyone I met that the IMF is here to listen to them and to help as they find useful—that we really value our partnership with Cambodia. We have stood with Cambodia through its transition, especially with capacity building and technical assistance.

I was glad to learn that the IMF’s role is greatly valued in Cambodia. In addition to capacity building, an example that quite a few people raised with me involves rice field irrigation! Not exactly something usually associated with the IMF. But Cambodia used the resources freed up by IMF debt relief to invest in an irrigation scheme that completely transformed the country’s rice production, turning it from a net importer to a net exporter of rice. For me, this was a perfect example of partnership in action, of the multi-layered benefits that can result when we work with a member country like Cambodia that has full ownership of its economic program.

Overall, I was truly inspired to see how confidently Cambodia has escaped its post-conflict past. It is now truly at the frontier of great economic transformation.

For a more detailed look at the IMF’s technical assistance program in Cambodia, watch this video:

South Korea: Keeping It Dynamic

My arrival in Seoul was somewhat delayed when dense fog caused my plane from Phnom Penh to be temporarily diverted from Seoul to Daegu. Still, better late than never! I was delighted to be back in Seoul, capital of one of the world’s most dynamic and innovative economies. Just remember: in a remarkably short period of time, Korea has risen from close to the bottom to close to the top—becoming the thirteenth most prosperous economy with an income per capita that is higher than the European Union average.

With such a track record, Korea plays an increasingly important role on the global stage. It held the annual presidency of the Group of Twenty advanced and emerging economies at the height of the global financial crisis in 2010. It is host to the Green Climate Fund, whose aim is to help developing countries respond to climate change—surely one of the greatest challenges of the 21st century. And it is playing ever increasing leadership roles in other international institutions, including the IMF.

Korea’s enhanced role in global affairs is paralleled by the reach of its “soft power”: the famous “hallyu” (Korean wave) has swept Asia and beyond with the melodies of its K-pop stars, its addictive Korean dramas and the technological wizardry of its products. And who has not danced—or at least tried to dance—to Psy’s insanely catchy viral hit?

A student asks International Monetary Fund Managing Director Christine Lagarde a question after she spoke at the Student Town Hall at Seoul National University December 5, 2013 in Seoul, Korea Lagarde is on a three country visit to Asia. IMF Photograph/Stephen JaffeA student asks International Monetary Fund Managing Director Christine Lagarde a question after she spoke at the Student Town Hall at Seoul National University December 5, 2013 in Seoul, Korea Lagarde is on a three country visit to Asia. IMF Photograph/Stephen Jaffe

I was particularly interested in what the future might hold for the “miracle on the Han”. I learned a lot from my discussions—with the authorities, with women leaders, and with students at the extremely prestigious Seoul National University, where I had been invited for a lecture and dialogue with students.If I could distil the main takeaway from my interactions, it would be this: for Korea to stay at the cutting edge of the global economy, it needs to sustain the inclusive growth that has been the hallmark of its development, and give everybody the chance to develop their multiple talents and fulfill their rich potential.

In part, this means providing more opportunities for young people and women—who tend to be less included in the labor market than is the case in other Organization for Economic Cooperation and Development countries.

I was really struck by the worries of young people about growing inequality and discontent in society—especially related to their fears about finding meaningful work, job security, and a living wage in an ever more competitive world.

International Monetary Fund Managing Director Christine Lagarde (L) meets with Korea's President Park Geun-hye (R) at the Blue House December 4, 2013 in Seoul, Korea Lagarde is on a three country visit to Asia. IMF Photograph/Stephen JaffeInternational Monetary Fund Managing Director Christine Lagarde (L) meets with Korea’s President Park Geun-hye (R) at the Blue House December 4, 2013 in Seoul, Korea Lagarde is on a three country visit to Asia. IMF Photograph/Stephen Jaffe

I was also struck by the Korean women I met—some of the most talented, determined, and dedicated women anywhere in the world. First among these, of course, is President Park Geun-hye, the first woman elected to the highest office in Korea, whose life has been dedicated to the service of her country. With women of this caliber, it is hard not to be optimistic about Korea’s future—but they must all be given a chance to access and demonstrate their many talents.

Letting everybody contribute also means strengthening the social safety net, and Korea can afford it. And it means making the services sector embrace more fully the dynamism that is the true hallmark of Korea, including by tackling vested interests where needed.

I take great encouragement from the government’s commitment to push ahead in all of these areas.

For my part, I emphasized the importance of an enduring partnership between Korea and the IMF. Korea has and will always have an important place at the IMF—exemplified most recently through our newly-appointed Korean director of the Asia and Pacific Department! I further saw Korea’s contribution in action with its generous commitment to provide $15 million over five years toward the IMF’s capacity building programs—a strong display of global solidarity that will give other countries the chance to follow in Korea’s footsteps.

In turn, the IMF wants to be of service to Korea, through our critical role in international economic cooperation and our multilateral perspective. We bring together the viewpoints of our global membership. And we have a unique cross-country perspective on how the different parts of the global economy fit together, affect each other, and ultimately can cooperate together for the global economic good.

In short, I left Korea feeling energized and optimistic. I also left looking forward to further partnership with Korea as it continues its dynamic quest to forge the best possible future for its people.

Myanmar: Awakening to Countless Possibilities

Having visited Cambodia and Korea on this whirlwind tour of the region, I touched down in my third and last country—Myanmar.

What a place! It is rare to find such a combination of enchanting beauty, warm hospitality, and an unstoppable drive to succeed. Myanmar is undergoing a great awakening to the world and all that it has to offer. And it is engaging on multiple fronts. For example, it has recently taken over the chairmanship of ASEAN, and when I arrived I found the country in the midst of hosting the South East Asian games.

 

International Monetary Fund Managing Director Christine Lagarde cheers on the water polo players as she watches Myanmar play Thailand during the 27th biennial SEA Games December 6, 2013 in Nay Pyi Taw, Myanmar. Lagarde is on a three country visit to Asia. IMF Photograph/Stephen JaffeInternational Monetary Fund Managing Director Christine Lagarde cheers on the water polo players as she watches Myanmar play Thailand during the 27th biennial SEA Games December 6, 2013 in Nay Pyi Taw, Myanmar. Lagarde is on a three country visit to Asia. IMF Photograph/Stephen Jaffe

I was deeply impressed by the achievements Myanmar has realized in a really short space of time—reducing inflation, freeing up access to foreign exchange and imports and establishing a new central bank. For sure, Myanmar has a long road ahead. And on this journey a “no haste, no waste” strategy will be key; a strategy that shuns reforms simply for the sake of reform, and instead makes progress at a pace that allows the authorities to manage the related risks, all while taking maximum advantage of the available opportunities. I was encouraged by the dedication, determination and optimism of everyone I talked to—the authorities; women leaders; and professors and students at the prestigious Yangon Institute of Economics, where I gave a speech.

In that speech, I noted that the priorities for Myanmar at this stage are threefold. First,invest in the future—especially in health, education, and infrastructure. Second,include all people in development, including the poor and women—for inclusive growth is the only real form of lasting growth. Third, integrate further into the broader regional economy, taking advantage of Myanmar’s auspicious location in the heart of Asia.

I also stressed that the IMF would be a lasting partner on the road ahead, and would always stand with the people of Myanmar.

International Monetary Fund Managing Director Christine Lagarde is greeted by faculty members prior to speaking at the Yangon Institute of Economics at Yangon University December 7, 2013 in Yangon, Myanmar. Lagarde is on her final leg of a three country visit to Asia. IMF Photograph/Stephen JaffeInternational Monetary Fund Managing Director Christine Lagarde is greeted by faculty members prior to speaking at the Yangon Institute of Economics at Yangon University December 7, 2013 in Yangon, Myanmar. Lagarde is on her final leg of a three country visit to Asia. IMF Photograph/Stephen Jaffe

One of the highlights of my visit was the chance to participate in the Women’s Forum Myanmar. The dialogue at the Forum suggested that, as Myanmar opens up, it is committed to the right kind of development—the kind that incorporates the skills, talent, and leadership of women. At the Forum I talked about the economic potential of women—we know that if women do better, economies do better, and that empowering women is one of the best ways of reducing poverty. I came away most impressed by the creativity, commitment, and compassion of Myanmar’s women.

International Monetary Fund Managing Director Christine Lagarde (L) meets with Daw Aung San Suu Kyi (R) meet privately prior to a breakfast meeting at the Chatrium Hotel December 7, 2013 in Yangon, Myanmar. Lagarde is on a three country visit to Asia. IMF Photograph/Stephen JaffeInternational Monetary Fund Managing Director Christine Lagarde (L) meets with Daw Aung San Suu Kyi (R) meet privately prior to a breakfast meeting at the Chatrium Hotel December 7, 2013 in Yangon, Myanmar. Lagarde is on a three country visit to Asia. IMF Photograph/Stephen Jaffe

I also had the chance to engage with one of my personal heroes, Daw Aung Suu Kyi. This was an especially poignant moment for me, as it came right after the passing of another giant on the global stage and another of my heroes—Nelson Mandela.

I remain humbled by Daw Suu’s achievements, and heartened by the resolve she has to create a better future for all citizens of Myanmar. In a moving speech at the Forum, she talked about generosity and empathy as the hallmarks of a decent society—where everyone is valued equally, respected for their innate human dignity and worth, and allowed to contribute and realize their full potential.

I was sad to leave Myanmar, but I also left inspired and optimistic. I felt that I had I glimpsed the future unfolding right before my eyes.

These pieces were cross-posted from iMFdirect with permission.

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