Economic and social transformation: an interregional perspective

What can policymakers learn from previous key economic, political and social transformations about how to push forward reforms to support a new social contract? Drawing on the experiences of former Soviet economies, the Arab Spring and ongoing constitutional reforms in Latin America, the panel discussed how the pandemic can be an opportunity for countries to restructure their economies.

Key points:

  • Reasons for change: muasher noted that the root causes of major societal changes are the lack of good governance and economic opportunity. Cardenas highlighted the sharp reversal of recent gains in poverty and inequality. by Shafik pointed out that current social contracts do not provide security or equal opportunity and that massive talent is wasted around the world.
  • Successful transformations: Georgiava observed that change/transformation brings benefits and opportunities, but must be accompanied by policies that support those who are negatively affected. Shafik noted three elements of successful transformation: (i) political change (as opposed to political rebranding), (ii) institutional reform towards greater efficiency, and (iii) new ideas. For Berglöfeconomic and social transformation can only be accompanied by political transformation, whereas muasher highlighted the need for a new social contract. Cardenas observed the need to prioritize between different objectives, focusing on social cohesion objectives that go hand in hand with an increase in institutional capacity.
  • Role of the fund: Cardenas called on the Fund to inform about the economic trade-offs of different options for change. muasher insisted on the need to talk more to civil society. Shafik added that the Fund must show countries the economic costs of unequal societies. Berglöf saw a role for the Fund in supporting conflict-affected, vulnerable, island and low-income economies.

Quote:

“Transformations are desirable when they lead to good policies, but they are complex and can be painful.” Kristalina Georgieva

“We absolutely have an obligation to look at what policies can do to move us towards a digital world that is more inclusive, greener, resilient and with as few divergences as possible” Kristalina Georgieva

Contributor: Rodolfo Dall’Orto

What interregional perspectives can be drawn from previous economic, political and social transformations, such as the fall of the Berlin Wall, the aftermath of the Arab crisis Uprisings, and the recent protests in Latin America? What can policy makers learn from these events about how to advance reforms to support a new social contract?

After IMF Managing Director Kristalina Georgieva’s keynote address, join IMF Jihad Azour, Alejandro Werner, and a panel of leading experts from the Middle East, Latin America, and Europe for a discussion on the how the pandemic can serve as an opportunity for countries to redesign their economies, make them smarter, fairer, greener and more conducive to job creation.

Opening remarks:

Kristalina Georgiava Managing Director of the International Monetary Fund

Speakers:

Jihad Azour, Director, Middle East and Central Asia Department, IMF (Moderator)

Erik BerglöfChief Economist at the Asian Infrastructure Investment Bank
Mauricio CardenasVisiting Senior Researcher and Visiting Professor at Columbia University SIPA
Marwan MuasherVice President for Studies at the Carnegie Endowment for International Peace
Minouch Shafikdirector of the London School of Economics and Political Science

Final remarks:

Alexander Werner, Director, Western Hemisphere Department, IMF