Speaker 1: This is Bloomberg Best. Bloomberg Best is about the insight
Speaker 1: and the context that we get from our guests. It's
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Speaker 1: seven hundred journalists and analysts in more than a hundred
Speaker 1: twenty countries around the world. I'm at Baxter and don
Speaker 1: to the spell Agremi on this weekend edition of Bloomberg Best.
Speaker 1: We have to help the world to not get into war.
Speaker 1: The managing director of the i m F, David even
Speaker 1: today there are moments when I'm pinching myself, am by
Speaker 1: the head of the IMF coming from where I'm coming from.
Speaker 1: Crystalina Georgieva on the David Rubinstein Show. Peer to Peer Conversations.
Speaker 1: If you're a president of the country in trouble, you
Speaker 1: bet the coult and Gorgyeva on the i m F
Speaker 1: S Mission. All this and more coming up in the
Speaker 1: next hour of bird Best. All right, and you know,
Speaker 1: the International Monetary Fund does a huge amount of important
Speaker 1: work across the Globe right right, Denis, And some of
Speaker 1: that work goes on behind the scenes. Yeah, and Bloomberg
Speaker 1: David Rubinstein had a chance to go behind the scenes
Speaker 1: and take a look at how it all works. And
Speaker 1: that's right. Here's David in his wide ranging interview with
Speaker 1: ahead of the i m F Crystalina Gorgeva. You've been
Speaker 1: a senior Commissioner of the European Commission and now you're
Speaker 1: the managing director of the i m F. And getting
Speaker 1: these positions was it more difficult because you were a
Speaker 1: woman where you're from a small country called Bulgaria. Where
Speaker 1: was there more prejudice against being a woman or from Bulgaria? Well,
Speaker 1: ultimately I got these jobs, so whatever the prejudice was,
Speaker 1: didn't call me back. If I'm too make a call
Speaker 1: on that. I would say being from a small country
Speaker 1: always requires to work twice as hard others to prove
Speaker 1: yourself when you're growing up in a small country and
Speaker 1: then behind the Soviet curtain, iron curtain. Um, did you
Speaker 1: ever think that you would wind up in these kind
Speaker 1: of positions as a young girl? Did you imagine anything
Speaker 1: like that? David? Even today, there are moments when I'm
Speaker 1: pinching myself, Am I the head of the IMF coming
Speaker 1: from where I'm coming from. So no, so many people
Speaker 1: don't know honestly what the I m F and the
Speaker 1: World Bank do. So can you explain what they actually
Speaker 1: do and why they're different and why we need them.
Speaker 1: So in the end of the Second World War, in
Speaker 1: a beautiful place in New Hampshire called Breton Woods, enlightened
Speaker 1: leaders came together and said, we have to help the
Speaker 1: world to not get into war, and to do so,
Speaker 1: we need to help the economy to perform better. And
Speaker 1: they created these two sister institutions, the METH with the
Speaker 1: Mandate on Financial Stability, Growth and Employment, and the World
Speaker 1: Bank to invest in reconstruction of then war torn countries. Okay,
Speaker 1: so your job at the I m F is to
Speaker 1: take a country that, let's say has financial problems, say
Speaker 1: the economy is weak, or they have other kind of crises,
Speaker 1: and you can help them through that difficult time by
Speaker 1: lending them money. Um. And right now you have about
Speaker 1: two seventies some billion dollars outstanding um. But you actually
Speaker 1: get paid it back. So the loans we provide are
Speaker 1: with very attractive interest rates because it is the money
Speaker 1: of our members. They extend to each other a helping
Speaker 1: hand for the poorest members, which are no interest. These
Speaker 1: are soft loans, much softer than the traditional IMAT loans.
Speaker 1: Countries pay us back. The poorer countries have longer mature
Speaker 1: the and longer time to serve their loans to us.
Speaker 1: But what matters is not just the money. What matters
Speaker 1: is that we work with countries to make them stronger
Speaker 1: so they can repay with more ease. And that is
Speaker 1: absolutely paramount for people to know about the fund. We
Speaker 1: are there to help countries to have strong economic fundamentals. Now,
Speaker 1: there are some people who say that sometimes when the
Speaker 1: I m F has lent money in the past, let's
Speaker 1: say to Argentina agrees, the terms are let's say draconian,
Speaker 1: and there's a lot of um I would say revulsion
Speaker 1: in those countries against the harsh I m F terms.
Speaker 1: Is that still fair or those things are the days
Speaker 1: of the past? What the the Of course, we learn
Speaker 1: from experience, and one of the things we learned is
Speaker 1: that we have to pay very close attention to the
Speaker 1: impact of programs on people. Policies are for people. Macro
Speaker 1: decisions have micro consequences, and we are integrating this much
Speaker 1: more in the programs we do today, we think about
Speaker 1: social spending. Put the floor. Don't allow education and health
Speaker 1: to be so dramatically impacted that human capital of the
Speaker 1: country is eroded. Let's suppose I'm the president of a
Speaker 1: country and I, you know, like some extra money, and
Speaker 1: can I call you up and say I'd like to
Speaker 1: borrow some money? And how hard is it to get
Speaker 1: the money? How long does it take? And are people
Speaker 1: afraid of calling you because their own credit ratings might
Speaker 1: go down if it's known that they have to borrow
Speaker 1: money from the I m F. If you're a president
Speaker 1: of a country in trouble, you better call because if
Speaker 1: you do not have access to markets, and some developing
Speaker 1: countries don't, then the only way to boost your economy
Speaker 1: is to rely on the I m F, the World
Speaker 1: Bank Institution like us. Because this is an exogenous shock,
Speaker 1: it is truly an emergency. The way we respond is
Speaker 1: different from what we do when a country isn't in
Speaker 1: trouble because it mismanaged its economy. It is the fault
Speaker 1: of those that have been governing at that time. What
Speaker 1: we are asking countries is two questions. One, please when
Speaker 1: you get the money, prioritize your health system and helping
Speaker 1: the most vulnerable people and the most vulnerable part of
Speaker 1: the economy. Two, show me the receipts. What did you
Speaker 1: use the money for. We are advising countries to spend more,
Speaker 1: but keep the receipts. We want accountability not just to us,
Speaker 1: but to the taxpayers in the countries. And we have
Speaker 1: advanced already financial lifelines to seventy five country is in
Speaker 1: record short time. I mean in this place, when a
Speaker 1: crisis knocks on the door, we turn on a dime.
Speaker 1: We are the world's first respondering crisis. Now, recently you
Speaker 1: have asked the g twenty two more or less have
Speaker 1: a debt forgiveness situation so that some people that owe
Speaker 1: you money wouldn't have to pay it back. Why did
Speaker 1: you need to do that when we got hit by
Speaker 1: this crisis? Four poor countries that is devastating twice as
Speaker 1: much as it is for countries that are wealthier. Why
Speaker 1: because one they have weak health systems, Two they have
Speaker 1: very little capacity to respond on their own, and three
Speaker 1: a number of them have had high that levels by
Speaker 1: that time. So the economy is instand still. If dead
Speaker 1: services not put in stand stills. These countries have to
Speaker 1: decide do they pay doctors and nurses and safe lives
Speaker 1: or serve that death. And that is bad for them,
Speaker 1: but it is also bad for the rest of the world,
Speaker 1: because a country in desperate situation falling to pieces turns
Speaker 1: into a security threat to its neighbors and the rest
Speaker 1: of the world. So we have lots of economists here. Um,
Speaker 1: what are the economists here telling you about the state
Speaker 1: of the economy in the world because of the pandemic?
Speaker 1: Are we likely to have a kind of global recession
Speaker 1: for another year or so? We have some optimism on
Speaker 1: two grounds. The first one is exceptionally decisive action by
Speaker 1: central banks and by finance authorities. They put the floor
Speaker 1: under the world economy. We on our side have done
Speaker 1: our part for the countries that have no resources on
Speaker 1: their own. The second reason we are somewhat more optimistic
Speaker 1: today than we were a couple of months ago is
Speaker 1: that we see the world learning how to function with
Speaker 1: the pandemic still with us. But make no mistake, the
Speaker 1: recovery is partial and it is uneven. We are not
Speaker 1: going to see in return to pre COVID conditions, and
Speaker 1: we are seeing big divergence. Parts of the economy doing
Speaker 1: really well and parts falling behind. And this is my
Speaker 1: biggest concern, that we may come on the other side
Speaker 1: of this crisis with more inequality, higher that higher deficits,
Speaker 1: and a climate cry I see still hanging on us.
Speaker 1: If we are strong as a world, we ought to
Speaker 1: come together. A massive coordinated stimulus can make it so
Speaker 1: that we have a better economy on the other side.
Speaker 1: Then we head in twin So let's talk about your background. Um,
Speaker 1: As I mentioned the outset, you grew up in Bulgaria.
Speaker 1: Bulgaria at that time was behind the Iron Curtain, so
Speaker 1: it was not a powerful country in the west, and
Speaker 1: it was actually a small and I think relatively poor country.
Speaker 1: It turns out you were from a prominent family, but
Speaker 1: not a wealthy family. Can you tell us a little
Speaker 1: bit about your background. So, yes, I was a daughter
Speaker 1: of ordinary people. My my father was a road engineer.
Speaker 1: My mother's it at home to look after us. Modest means,
Speaker 1: very happy childhood, very loving parents. Yes, my family was prominent,
Speaker 1: but I didn't know that until I was in my twenties.
Speaker 1: Why because my father was concerned that if we talk
Speaker 1: about the revolutionary who was my great grandfather. And the
Speaker 1: fact that we can trace back our origins five centuries
Speaker 1: into the past, that may not jail well with the
Speaker 1: power of the prolettariat. Some when you're growing up no Bulgarian. Bulgarian,
Speaker 1: let's say the fifties and sixties, did were you required
Speaker 1: to learn Russian? Of course, of course engst No. I.
Speaker 1: Actually my mother was a Francophe so she sent me
Speaker 1: to learn French. I had some French. When Gorbachev came
Speaker 1: to power in the Soviet Union and Glasses and Paris
Speaker 1: Striker came to Bulgaria, I was able to apply for
Speaker 1: a scholarship in the West, and in six months I
Speaker 1: learned English enough to pass to win a British Council
Speaker 1: scholarship to go to London School of Economics. That was
Speaker 1: incredible to be on the other side of the Iron Curtain.
Speaker 1: And what I found out over there, having access to information,
Speaker 1: was that my country was broke. My country was so
Speaker 1: much deep in debt that I couldn't imagine how it
Speaker 1: is going to survive. Sure enough, two years later Bulgaria
Speaker 1: the economy collapse and Bulgaria turned a page away from
Speaker 1: socialism to market economy. How did you wind up in
Speaker 1: the Fiji Islands. Now that is a story. So when
Speaker 1: I was at London School of Economics, a professor notice
Speaker 1: me as somebody who is quite professional. He then became
Speaker 1: the dean of economics in the University of South Pacific
Speaker 1: in Suva in Fiji. He sitting there wondering how he
Speaker 1: can find highly qualified professors that are willing to work
Speaker 1: for very little money, And so brilliant idea wrote to
Speaker 1: this Bulgarian woman. I got the letter, the invitation to
Speaker 1: go and teach. I had to virtually go to the
Speaker 1: map and see where Fiji was. Getting from Bulgaria to
Speaker 1: Fiji was an adventure. And so I'm lending in Fiji.
Speaker 1: I handed my passport to the passport control lady. She
Speaker 1: takes it, type something, looks at me and as where
Speaker 1: are you from? I said, Bulgaria. She types again, looks
Speaker 1: at me and says there is no such country. The
Speaker 1: first Bulgarian to go to Fiji. Now the professor really
Speaker 1: liked me. He offered me a job. I still remember
Speaker 1: he offered me a job sixteen thousand dollars a year.
Speaker 1: I had no idea of my market value at that time.
Speaker 1: I was paid hundred dollars a month. But I still
Speaker 1: didn't take the job. Why because it was so far,
Speaker 1: so far from Bulgaria. So I went back. I got
Speaker 1: a chance to go to m I T. To come
Speaker 1: to the United States and the resist history. What did
Speaker 1: you ever say, I'm not going back to Bulgaria. I'm
Speaker 1: now in the West and I'm going to stay in
Speaker 1: the West. Actually no. I came to m I T
Speaker 1: with the idea to spend one year, learn as much
Speaker 1: as I can and bring this knowledge back to Bulgaria.
Speaker 1: I actually had a contract to write a textbook on
Speaker 1: environmental economics as an outcome of this visit. But the
Speaker 1: World Bank called me up. They offered me a summer job.
Speaker 1: I came for the summer. The fourth day I'm in
Speaker 1: this consulting job, I got a call and I got
Speaker 1: an offer to stay at the bank. Why. At that time,
Speaker 1: the Bank was looking for environmental economists ninety two post
Speaker 1: reel Check. They were desperate for women. They were very
Speaker 1: male dominated, so check, and they were opening up towards
Speaker 1: the Soviet Union formased and block Russian speakers. Check. So
Speaker 1: I took the job. I said, well, you know it's
Speaker 1: it's this is such an opportunity to work here, and
Speaker 1: then I did incredibly interesting jobs within the bank. I
Speaker 1: raised up in the in the ranks, and one day
Speaker 1: I got the call to go to Europe. What did
Speaker 1: you actually do there? What was your job? I had
Speaker 1: first the job of Humanitarian and Crisis Commissioner Commissioner and
Speaker 1: it was an incredible experience. I had the front seat
Speaker 1: position in all the terrible crisis that were happening at
Speaker 1: that time, from a Highiti earthquake to the Triple disaster
Speaker 1: in Japan to the Syrian war, and I was able
Speaker 1: to mobilize the very best of Europe to help people
Speaker 1: in terrible need and reformed the crisis response system of Europe.
Speaker 1: One of my strong memories of this time, I'm in
Speaker 1: a in a village talking to a Syrian girl who
Speaker 1: wants to go back to school, but there is no
Speaker 1: schooling available. And I said to her, her name was Aisha, said,
Speaker 1: I said, I hope you would be able to go
Speaker 1: back to school. I walked out of there and I thought,
Speaker 1: my hoping means nothing to her. My acting would make
Speaker 1: a difference. And then we mobilized and we scaled up
Speaker 1: massively access to education for Syrian refugee children. So you
Speaker 1: talked about Brenton Woods and how the I m F
Speaker 1: and the World Bank were created in the late nineteen forties.
Speaker 1: If you had been there, then how would you change
Speaker 1: the structure for the I m F or the World Bank?
Speaker 1: And might you think there could be some time in
Speaker 1: the future when some of the structure might be changed
Speaker 1: to make it better. But they were created very thoughtfully
Speaker 1: with the institutions that evolve with time. The shareholding changes
Speaker 1: as the world economy changes. What is required from us
Speaker 1: is to relentlessly pursue this adjustment. So the I m
Speaker 1: F in terms of its governance and the shareholding reflects
Speaker 1: the world of today. Uh and that takes a lot
Speaker 1: of work bringing the membership together. The IMF has done
Speaker 1: a successful quarter adjustment. This is changing shareholding UM and
Speaker 1: now is due to take stock again. So between now
Speaker 1: and twenty twenty three it would be a very important
Speaker 1: job to do. So what percentage of the people who
Speaker 1: are under staff are they Americans or from overseas? And
Speaker 1: what percentage or male or female? And soft worth? So
Speaker 1: we have just about UM sevent of stuff from all
Speaker 1: countries in the world and around twenty Americans. Logically, for
Speaker 1: many positions we recruit locally, like for some of the
Speaker 1: assistance coordinators for the professional pool, we recruit internationally and competitively. Uh.
Speaker 1: Broadly speaking, we are about the same men and women.
Speaker 1: But you wouldn't be surprised when we go up there
Speaker 1: are more men then we head down. And this is
Speaker 1: something that I am zeroing on um when I came directors.
Speaker 1: This is the layer of management that has most important
Speaker 1: operational responsibility. Were women men Now they are forty sixty
Speaker 1: and I would drive this pipeline of talented women, not
Speaker 1: because I am obsessed with percentages, but because diversity matters,
Speaker 1: having different regional perspectives, having men and women working together
Speaker 1: makes us more effective. We make better decisions as result. Historically,
Speaker 1: the World Bank President was picked more or less by
Speaker 1: the United States administration and President of the United States,
Speaker 1: and the head of the IMAP was more or less
Speaker 1: picked by Europeans. I would say, um, you foresee that
Speaker 1: that will change or that's going to continue for the
Speaker 1: foreseeable future. I think that there would be more and
Speaker 1: more demand to make these positions open for competition based
Speaker 1: on merits. And even if you take this round, yes,
Speaker 1: I'm a European. Europe aligned to nominate me, But I'm
Speaker 1: a European from a country that in the mid nineties
Speaker 1: benefited from an IMF program. I do belong to emerging markets,
Speaker 1: and emerging markets were very loud in supporting me for
Speaker 1: that reason. So I want to see that process to continue. Why.
Speaker 1: Because institutions are much stronger when the whole world believes
Speaker 1: they belong to all of us. Now China has become
Speaker 1: a major economic power, I guess the second largest economy
Speaker 1: in the world. Does China have the influence in the
Speaker 1: i m F the World Bank proportionate to which overall
Speaker 1: global economy? Now what they have, they have increased their
Speaker 1: shareholding in both institutions. They have been also very active
Speaker 1: in supporting the institutions. In the case of the I
Speaker 1: m F, China, the US, the rest of the world
Speaker 1: in this crisis stepped up significantly support for US to
Speaker 1: be able to extend concessional lending. And I see the
Speaker 1: engagement of China as as constructive. That is so very
Speaker 1: important when we are in the midst of the worst
Speaker 1: crisis we have had since the Second World or so.
Speaker 1: The i m F stands for the International Monetary Fund.
Speaker 1: Have you ever thought of changing it to say it
Speaker 1: stands for I am fair, I am friendly that most
Speaker 1: people here in the funds say it stands for it
Speaker 1: is mostly fiscal, but I much prefer the definition you give,
Speaker 1: and actually this is what I would relentlessly work for.
Speaker 1: We at the fund to always think of the people
Speaker 1: whose lives are impacted by the policies we recommend. Um.
Speaker 1: You're the most prominent person in the West from Bulgaria
Speaker 1: as far as I know. Maybe there's somebody else, but
Speaker 1: I can't think of anybody else, So I assume you
Speaker 1: could go back to Bulgaria whenever you wanted to and
Speaker 1: run for president of Bulgaria. I don't know if that's
Speaker 1: a better job than the one you currently have, but
Speaker 1: you ever thought of running for office in Bulgaria or
Speaker 1: you're quite happy where you are. I always take the
Speaker 1: job I have as what takes my full concentration. I
Speaker 1: poured my heart in it. I never ever think of
Speaker 1: what next. So as long as I'm the head of
Speaker 1: the I m F, it is I d I m
Speaker 1: F and the membership that has my complete medication, And
Speaker 1: that was Crystallina Georgieva, head of the I m f
Speaker 1: on the David Ribbonstein Show Peer to Peer Conversations, and
Speaker 1: that's it for this hour of Bloomberg Best. I'm at
Speaker 1: Baxter and I'm Denise Pellogreni, and this is Bloomberg