The following is the unofficial transcript of a CNBC interview with IMF Managing Director and Chairman of the Executive Board Kristalina Georgieva from the CNBC Evolve Global Summit which took place today, Wednesday, June 16th.
Video from the interview will be available at cnbc.com/evolve.
All references must be sourced to the CNBC Evolve Global Summit.
Geoff Cutmore: Managing Director of the IMF, who comes to us now from Washington. Good to see you once again, Managing Director. If I might just start by asking you a question about the pandemic, before we move on to the environmental issue, and it's one really that you have been very strong about, the need to tackle the pandemic, to recover economic growth, before we can then move on and focus on building back better. One of the issues at the moment that is a very hot topic is whether we should be encouraging vaccine passports as a way of finding a route back to travel, and to business as we once knew it. What's the IMF's current view on these passports, and should they be embraced as a way of getting back to the world we knew?
Kristalina Georgieva: Thank you very much for having me today. Yes, vaccine policy this year, probably next year, is going to be the most important economic policy; it may beat even monetary and fiscal policy, in terms of significance. We do need information on how high are the risks in different countries, and before I answer concretely on the passports, let me just say that a prerequisite to bring the world to a sustained high level of growth everywhere is to vaccinate all people, and that is not yet done. We have a two-track vaccination path right now. We have to overcome that. And, as you know, we put a planned $50 billion award that would generate tremendous benefits, the best return on investment in our lifetimes. Now, going to the question of data, we do need to know the levels of vaccinations in different countries, and then we have to be able to communicate internationally what is the status of people when they travel. In that sense, having a vaccination card that shows when you were vaccinated is a very useful tool. It is already being applied, and I do believe that we need to look into applying that more broadly. Obviously, the question in hand would be how credible is the underlying information? How trustworthy are the passports? And that is a question that there are more qualified organizations than the IMF to answer. But, from our standpoint, first things first, we need to vaccinate people, and then we need to make sure that information around what is the degree of protection we carry is a very useful one to incentivize a more open border policy around the world.
Geoff Cutmore: Is there an international body that could manage this, to overcome concerns around inequality of access to vaccines, and privacy issues over the data? Or would you anticipate that countries would take a piecemeal approach, based on their own data systems and abilities to implement the structure of a system?
Kristalina Georgieva: One of the conclusions coming out of this pandemic is that we do need to build a global governance that is more effectively connected, to deal with pandemics, and that is one of the reasons why the G20 invited a high-level panel to present recommendations with a strong focus on that exact issue of global governance. I am very eager to see the outcome of this panel, the recommendations they will present, in July, at the G20 Ministers of Finance meeting. It is very interesting to see what they refer to as a possible pointer, and that is how we dealt with the global financial crisis, by creating an entity that watches us very carefully, whether we are facing trouble. And that… that concept is one that they are pursuing. On data, you know that the issue is much broader than passports; it is one that many believe can only be addressed by a world data organization, that actually brings these questions of quality of data, the underlying protection of privacy, and integrates the world, but at this point of time, I think we are a way away from having that world data organization in place. So a lot to be done, because of the huge expansion of digitalization in all areas, and that is clearly seen when we look at the question of how do we trust health data?
Geoff Cutmore: Let me just push on, and we'll move on to the G7, because one of the announcements that came out of that meeting was the Build Back Better World – B3W, as it's now being called – which very much focused on the idea of investment into green objectives, environmental objectives, and yet there was no timescale, and no real clear idea of just how much money would be involved, and would be put into the project by G7 members. Are you disappointed that it was pretty thin on detail, even if it made a good headline?
Kristalina Georgieva: I want to take an objective look at what has been achieved at the G7 when it comes down to climate and environmental sustainability, and it is significant. One, we finally recognize that while it is progress to have targets by 2050 to be carbon neutral, it is this decade, the next couple of years, that will determine whether we can reach that goal, and, in that regard, the G7 made progress with taking more accelerated commitments by 2030, and I welcome that very much. Second, the G7 looked into the most significant carbon intensity areas, energy, transport, some of the industries that are very difficult to decarbonize, and in that sense, bringing country commitments in specific terms is definitely progress. I hope it will be followed up in the G20 context. And three, a very clear recognition that developing countries need help. The fact that we now are getting a promise that the 100 billion will materialize, and that when we go to COP26 we will see it, that is to be welcomed. From my perspective, where I would've liked to see more is a clear commitment to carbon price, with a forward trajectory that sends a signal to producers and consumers. There is some way still to go in that area.
Geoff Cutmore: Managing Director, given your history, you know an awful lot about Cold Wars, and one of the themes that came out of both the G7 meeting and the NATO meeting was a reframing of America's strategic competition with China, we have the Putin-Biden meeting as well here, and increasing temperature, it seems, between the United States and its western allies, and Russia, and China. Are you concerned that we are sleepwalking again into a world that looks something like the 60s and the 70s, in Cold War terms? And, if so, what are the consequences for all of us, in terms of business, and how safe we may feel about just going around our day-to-day lives? Is the world becoming slightly unsafer today?
Kristalina Georgieva: What we live in is a world that is much more interconnected and much more integrated than the one I lived in during the Second… after the Second World War, when we had a Cold War separating us with an Iron Curtain. There is no separation in economic terms, we see global supply chains operating, and if anything, the pandemic just confirmed to us that we are interconnected, and we are interdependent. It also sent a very important signal that we are dependent on mother nature. In other words, we are in a world in which there are global challenges we can only address together, and our economy is functioning in a very strongly interconnected manner. That was not the case during the Cold War. Of course, there are differences in objectives, and we are in a multi-economic power world, that is again a difference vis a vis where we were a couple of decades ago. From the perspective of my institution, the International Monetary Fund, we see a holistic, functioning as one, economic system, and we see all the benefits of sustaining this interdependence, and riding on it to address the huge challenges we face. Let me go back to climate change. This is certainly one area where we need each other, and I am hopeful that what we have seen in the last years, a growing recognition everywhere how critical for our very existence working together is would take us to a more collaborative place. Now, would there be differences, and would there be wrestling? Yes. But we can only solve this problem on a foundation of mutual trust. There is no other way. So we will do our part, at the IMF, to build this mutual trust, and keep our countries seeing the benefit of collaboration as something that they cherish for their own interests, for their own people, for their own businesses.
Geoff Cutmore: We famously, in the old days, used to talk about the clock, and how close the hands were to midnight, and that was perceived as a gauge of political risk. The new Biden administration has embraced multilateralism, but it's very much on America's terms, at this point, and it's unclear, ultimately, what that multilateralism will mean for the environmental agenda, for the new global tax policy, for the ongoing engagement with China and Russia. Do you worry that those hands are moving closer to midnight again? And do you think that we can keep Russia and China on board on these policies, with what appears to be a more antagonistic attitude towards their not participating in the rules-based system that we recognize?
Kristalina Georgieva: Well, so far, so good. What we see is seeking solutions in multilateral settings, and bringing the big challenges of tomorrow to unite the world on finding solutions to these challenges. Let's recognize that we have been also beneficiaries of this renewed multilateralism. The G7 endorsed the largest in the history of the IMF creation of reserve assets, of our special drawing rights, 650 billion, and it is something that unites our membership, everybody is on board, from the large economies, including the G7, including China, to small countries. We see that same approach, when it comes down to addressing climate change. Bring the world together. We cannot do it each one separately. And that I want to continue to nurture within the parameters of our work. Again, would there be differences in views? Of course. Will there be competition? Of course. Can we overcome, on the big issues of today and tomorrow, that tendency to look at our own interests? Yes, because our own interest is to collaborate and work together, and we will continue to provide the evidence that it is a winning strategy on the big issues we face, from climate, to the pandemic, to how the world would operate when it is primarily digital, how we can have a common foundation on data, to make that world work. We will continue to put our best effort into it. You asked me… you talked about my experience during the Cold War. Look, I did not like it one iota. A divided world misses on opportunities. A united world provides a better chance for prosperity. And let's remember, we are in a more shock-prone world. We cannot possibly accept a concept in which, in this one boat we sit, we say, "You know what? My part of the boat is just fine. Yours is the one that is sinking." So the logic of today and tomorrow is to overcome differences on the big issues the world faces.
Geoff Cutmore: Managing Director, always a pleasure to catch up with you. Kristalina Georgieva, the Managing Director of the IMF.
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