Hangzhou: G20 leaders resolved to combat a "populist backlash" against global trade, and highlight the benefits it has brought including lifting millions out of poverty, IMF´s Christine Lagarde said Monday.
Lagarde said that the benefits of free trade in terms of lifting productivity, giving people choices and hauling them out of poverty were being drowned out by the chorus of opposition.
There was "a determination around the room to better identify the benefits of trade in order to respond to the easy populist backlash against globalisation," the IMF managing director said after a summit in China.
"The way, for instance, China has managed to bring more than 700 million people out of poverty towards the formation of a middle class. Those stories are not really included in the narrative that we have at the moment."
But in a concession to the rising sense that many have been left behind, she said that globalisation "has to benefit all, not a few".
In an opening speech Sunday Chinese President Xi Jinping delivered a stern warning over sluggish global growth, financial market turbulence and receding global trade and investment.
But the talks take place amid a perception that the global economic order exemplified by the G20 is not working for ordinary people, a mood that makes it difficult for many leaders to make meaningful commitments.
Lagarde said the first priority is a coordinated effort to raise growth. The G20 agreed that this will require making full use of all policy levers - monetary, fiscal, and structural - individually and collectively. The G20 also agreed to identify and prioritise reforms that provide the biggest growth impulse for each country, which is an area where the IMF is actively engaged,” the IMF boss said.
She added that pushing back against protectionism and pushing forward with free and fair trade is a vital component of this growth agenda.
"A second priority is a commitment that growth must be more widely shared. Again, countries should deploy proven tools to reduce excessive inequality and raise economic prospects, particularly for low-income groups and workers affected by rapid technological change - for example, through skills training and investments in education and health,” Lagarde added.
“We need increased growth, but it must be better balanced, more sustainable, and inclusive so as to benefit all people.”
The issue of low growth trap, she said the member countries take the very strong view that policy makers have to act upon the current situation they have to use all positive tools and levers in order to respond to that risk, “which is why I said monetary policy where possible, but where stretched too thin, use fiscal policy in order to stimulate demand, which we are short on at the moment.”
“Have we resolved all problems of the world, probably not, is there more work to be done, international taxation in fight against evasion, in fight against climate change, there´s plenty to be done.”