allow this reality to become an excuse to do nothing to prevent further fracturing of the global economy. quite the opposite. my appeal during this annual meetings will be, let's work together in an enlightened way to lift our collective prospects. let us not take the global tensions as given, but rather resolve to work to lower the geopolitical temperature and attend to the task that can only be tackled together. trade, which has lowered price, improved quality, created jobs. and is still showing remarkable resilience in the face of new barriers often flowing around them via third countries. but we need to recognize

redirection can only take us that far and we cannot assume it will continue indefinitely. so we have to get on the page of protecting what works well in our trade system. second, and this one is truly existential, climate. countries that contribute the least are the most negatively impacted. unexpected global warming moving actually faster than we thought. you read every book and it says, oops, we were wrong, it is worse. glaciers melting, icecap crumbling, average weather events have telegraphed a frightening message from the future. we know what we must do. create fiscal space for the green transition, eliminate fossil fuel subsidies, get

capital to where it is most needed. and three, artificial intelligence. our single best shot at higher productivity. if it is managed well, it has the potential to lift world growth by up to 0.8 percentage points. with that alone we are likely to not only reach our prepandemic higher average growth, but even potentially exceed it. yet what we need is, we need regulatory and ethical kouls that are global. why global? a.i. is borderless. it's already on smart phones everywhere. i have a question for you, how many of you have chatgpt on your phones? raise your hand. how many of you don't have it?

ok. there is some way to go. but it is not going away. this technology is not going away. those of you who have not raised your hands. go ahead, catch up. bottom line is that there are areas where we need to work together. sometimes we need to relearn to work together. and we at the i.m.f., we are born from this basic idea, pull resources, everybody's better off. we have a role to play. andrea has already mentioned in my first term it was anything but boring. it was a really hard time. and we had done a lot. we have injected historically high liquidity, you mentioned this number, more important than the money, we kept our membership together so they can synchronize policy action at the

time of very high uncertainty. and now we are in the first days of my second term we deliver, again. our executive board in full consensus, not a single abstention, approved important reforms that reinforce our strong financial position and directly benefit the membership. reducing charges and surcharges on our regular lending, putting in place a comprehensive package to secure our concessional lending capacity to support low-income countries. i see quite a number of people who have worked on that. bernard, jayla. it was a very heavy lift, but it got done. andrea mentioned we are going to have a third board member for sub-saharan africa. i can disclose that this new chair will be held by ko coat

desroeur -- by cote d' ivorie. what they do is give us strength to continue to deliver high value added to a membership that engages not out of charity but self-interest. and it is this value that brought our membership to grow. now we are welcoming very warmly the principality of liechtenstein as our could 191st member. as our 191st member. so when i go back to the founding in the dark days of 1944 to today, what we have established is is a tradition of adapting to the changing world around us. and today you have my word this

will continue. we will stand with our members, always looking for the most impactful way to serve. by the time i complete my second term at the hellp of the i.m.f., will i have led it for almost the whole of this decade. if i'm granted one wish, it would simply be this, let this decade be remembered not as one where we allowed conflicts to get in the way of existential tasks, storing up vast costs and misery for those who would follow. let it be remembered as a time when we rose above our differences for the good of all.

for our mutual prosperity. and ultimately for our survival. i say, we can do better. let there be peace on earth, and let corporation flourish. we can do better. thank you. [applause] andrea: thank you so much. now we get a chance to ask questions which is my favorite part. thank you so much for the overview i did want to sort of go into

the big picture here. clearly the global economy is facing tremendous uncertainty. you mentioned rising tensions in the middle east where we have seen just dreadful, horrific pictures in recent days and over the past year. there's russia's ongoing war in ukraine. rising protectionism. the chart was -- seeing the trade restrictions was shocking i have to say. seeing it visualized like that. we are also seeing major devastating weather events. and with increasing frequency. of course, we are here in the united states, we are in an election, many things in just a few week. s. as you prepared for the meeting next week, how worried are you about the global economy and the head winds we face? it seems the challenges are daunting and the risks on the downside. kristalina: this is a very

interesting situation we find ourselves to be. because it combines better than expected performance of the world economy and risks to the downside. so when we are assess ising the situation -- assessing the situation what i want to emphasize is that incredible resilience we have demonstrated, andrea, over the last years and especially in this last year when we were fighting inflation, it does come from years and years and years of investing in strong institutions and also investing in the world having charges of communication, ability to engage. and this investment i don't think is gone. it actually -- we'll see it next

week continuing. my expectation is that we will see governors and ministers coming here leaving outside their differences. the line i would use is leave your trade war out. leave your cold war out. if god forbid you have a hot war, leave it out. and if you have a proxy war, leave it out. and engage on the important policy choices that i just outlined that are very pressing for us. it's a mixed picture when you look at the world just in the couple days we'll come with the growth projections. what we see is -- compared to historical performance, china slowing down, india is accelerating. some other parts of asia are

accelerating. u.s. is doing quite well. europe can do better. so in that picture i think the issue with that would dominate is are we going to right on the opportunities we are presented with by technology and by the instruments of collaboration we have built or we will retreat to a worse position. you heard me, i think, each and every one of us in whatever we do, institution, individually, we have a very important responsibility. i hope the media would take it as well. to work for doing better. and in that sense i'm not super pessimistic because if you look

at the trajectory of the world economy, yeah, we can do better, but we can also do much worse. so we will see how the conversation goes. my expectation is people will leave from here somewhat uplifted, somewhat more scared, hopefully scared to get them into high gear to act. we will do our part to bring get more scared but, hey, there are things you can do. go back home, do them. andrea: that brings me to another question which is you outlined ways policy makers can bolster lackluster growth forecast by improving their situation whether that's through raising taxes, reducing and boosting revenues, reducing debt, enhancing productivity. as your paper shows doing that

is hard, really hard to get through. what's your advise when you meet with the -- advice when you meet with the ministers from countries that need to implement those very often painful reforms? kristalina: two words, buckle up. i lifted a country that has gone through tremendous structural transformation. it is painful but then you reap the benefits from it. when you look around the world, there are shining examples. look at brazil. brazil started in 2017 reforms of the labor market, then they went into tax reforms. value-added tax reforms. what we see from the data is that growth in brazil is boosted by somewhere between 0.3, 0.5%. that is significant. or you look at the performance of india over the years. remarkable.

india was a country in the 90's where you can cannot make a step forward because of red tape. everything needs to be permitted. permits require -- they breed corruption. the country doesn't move. look at india today. it is a bright spot on the world. so the question really is how to generate that determination. then go to work. i would not -- do i not want anybody to -- i do not want anybody to walk oust here thinking it is doom and gloom. it is difficult. but there are actions that have been taken by others, you can do it as well. andrea: ok. i have to say that it's difficult not to be pessimistic or fatalistic about the low growth, high debt conundrum.

it seems like it's getting worse. given the high levels of uncertainty, all the risks and geopolitical environment, where do you see opportunities for hope? you mentioned a.i. how significant of a factor can that be? can we shift the momentum there on this debt issue? kristalina: there are three things that need to be done. in countries that are in situation that is not sustainable, we know what needs to be done. that needs to be restructured. i am encouraged to see speeding up the restructural process, the global sovereign at round table is helping to get consensus on some of the policy issues. ethiopia, if you look at the speed with which ethiopia moved to restructuring vis-a-vis the first country, chad, it is night and day. the second is thing that needs to be done on that is to get

governments to think about their fiscal consolidation over time. we worry of too fast tightening because you have to find this balance between -- are you still supporting growth in the economy but you are getting fiscal consolidation in place. we actually very actively and loudly tell countries, yes, consolidate credibly, but do it over time so you don't suffocate your growth potential. and three, there are *r there are things that can help -- there are things that can help economies to grow. look at the enormous impact of the green transition and digital transformation. it is cutting up parts of the world in way that is just

amazing -- powering up parts of the world in a way that's aphaeugz. when i think about the -- my concern around what is going on, the distance between those who do well and those who don't, unfortunately, is growing. what we used to be in a world of convergence, now we are in a world of divergence. pay attention not only to yourself, pay attention to others. this is where this whole conversation about trade restrictions, industrial policy can play. you throw cold water on the economies of others, guess what? other economies shrinking the pie of which would get smaller. a bit more rational design of policies. this is where the fun comes what we can do is show what are the

costs, what are the benefits. in the most transparent way for policymakers to make their mind. again, andrea, we can say, o god, it's horrible. let's go home and lie in bed and cover our heads and go to sleep. or we can say, this is a tremendous challenge. let's figure it out. andrea: when you -- during your first term you pioneered some work that was important in terms of addressing the needs. you mentioned the r.s.t. and also a global -- helped set up the global round table to sort of help particularly china as the largest creditor, but others. also work through the issues involved with debt restructuring. what's your next initiative?

where do you see opportunities, or do you -- kristalina: luckily focus at the fronts right now are three things. number one, make sure that this soft that this soft landing we talk about actually happens. a fleet of soon-to-be are forgiven. that work with helping countries with monetary policy understanding what needs to be done. but then move the attention to the fiscal side. and help countries in this fiscal consolidation that many of them have to do, do it wisely. do it pro-growth, not growth suffocating. the second one is if you come to the fund almost every day, there is a discussion around growth.

structure reforms or growth. how do you lift up productivity? what we can learn from one country to the other? for us yes we are about monetary policy, stability, but let's remember our articles say for growth and employment. and we are very keen to see that ability of countries to grow enhanced by the support of the fund. and three, we are in a world where the changes technologically are so rapid that we risk new shocks to come for which we have a blind spot. just think about technology affecting financial systems. cross border payments, the way investments are managed. and that area of risk that is financial stability risk for us,

for b.i.s., central manx, hugely important. when you ask me what's next for us, i'll tell you, i want the fund to be financially very strong to anchor our members and lean forward on issues that matter to them. one thing i'm extremely proud we are financially strong, andrea. the fund for years and years and years and years and years had a target for precautionary balances. this is what buffers us against risk in our portfolio. we couldn't reach this target until april this year. for the first time i can say we walk our own talk. we tell countries build buffers, here we are our buffer is really strong. that's how -- i'm not thinking

of big initiatives, i'm thinking about doing the police -- business of our membership with agility, speed, and of course quality of the work we do. andrea: terrific. in advance of this event we asked for some questions. we have got four people that are going to ask questions that were selected. let's start with you, fred. get the microphones to you. >> madam manageling director, thank you for that really remarkable presentation. i want to fred from the atlantic council. i would like to grill down on global trade. your global trade alert, your quote trade will not be the same engine of growth as before. you said that in 2019. you are saying it's worse. my question is is, how much worse is it getting? and you talk about we can do

better. wonder if you can get more specific? a lot of countries see it in their self-interest whether it's chinese over capacity exports, whether it's tariffs of the e.u. or u.s., self-interest sometimes overcomes what you are arguing for which is global trade coming together. where do we start? what changes this trajectory? kristalina: first observation i would like to make, fred, is that trade has slowed down, but has not gone into reverse. when you look at the reason for it, it is primarily this very deep interdependence that has been built over decades. what is important to recognize is that it is now mostly

advanced economies that are leading the way on restrictions. in the last 18 months there have been 4,000 industrial policy measures that impact the free flow of trade. 4,000. 60% of them come from advanced economies. can can we work -- can we work rationally to determine where this is genuinely grounded in national security concerns, or in market failures? yes. the person sitting right next to you, her team just published a guidance on industrial policy. the job for us -- it defines when it is justified, when it is not, how do we measure costs and

benefits, and how we build this in our regular surveillance work so we can help countries make decisions in the future that they are grounded in sound analysis. this is our job. and then comes the reform of the w.t.o. it is not going very fast, but it is also not dead. how can we more momentum be built practically to make the w.h.o. more acceptable for members? and three, i put actually a lot of hope on that. what we see as regional corporation. you have the world cooling off a little bit on global cooperation.

but at the same time we see gulf corporation council, countries that are linked by interests, for example some of the commodity producers, we have seen africa more interest in building africa wide free trade arrangements. how can can we use different pathways to build better prospects for growth on the basis of trade continuing to function although it's not going to be the same engine of growth as it used to be. you the atlantic council, you have also role to play, because you do a lot of this analysis of comparative performance. i think we have to be -- one thing i would advise against is don't take it for granted that oh, well, this is how it is.

make the analysis show the arguments, better days will come. but these are the three things. one is make sure people understand the implications of measures they take. especially industrial policy measures. we can help. make sure that obstacles to the functioning of the global tradecies is tell related to w.t.o. are removed. and look at the other drivers of collaboration and trade especially in regional settings. andrea: let me follow-up on fred's question. we'll go to a few more questions. it occurs to me that when you talk about inflation coming down and prices staying up, it's one of the big drivers of the discontent. isn't the same thing sort of true with trade restrictions that once they are implemented they are really hard to dismantle? going back is always harder.

kristalina: one of the main messages of this industrial policy piece i mentioned it says, make it temporary, build an exit door. don't make it so can you not leave it. you're right, occasionally this is the case. since you mentioned inflation, why are we concerned about trade restrictions and protectionism? actually who pays for it? who pays for tariffs? the businesses and the consumers. mostly in the country that will has created the tariffs. and also what we see is that there is three out of four -- if this is to happen, in three out of four cases there will be retaliation. somebody's going to get hurt because of this. i think our job is to show that

you make benefits here but they may be costs there that outweigh this benefits. and help policymakers think through this. andrea: it's not a panacea. kristalina: no. it is not. there is no silver bullet in very short supply. andrea: terrific. let's take a question from homey from brookings. >> great to see you. >> thank you so much for the overview. you talked about countries worrying about getting growth going again. many countries worry about the impact of comply mat on their growth -- comply mat on their growth and -- climate on their growth. they are worried about build up of debt. i just wanted to ask how do you view

how do you balancing -- view balancing those kind of risks? kristalina: we did a fairly thorough analysis of how to finance mitigation and one obvious conclusion was who cannot borrow your way through this problem. you have to think about and this is why i'm so much emphasizing the purpose of growth. and unless you do that, unless you do that you are in a catch 22.