International Council 2020: Building a Post-Pandemic Economy and Multilateral System

10:30 am

- 12:30 pm

12 Oct, 2020

Virtual

International Council 2020: Building a Post-Pandemic Economy and Multilateral System

This year’s International Council meeting has been adapted to a virtual format and will be held alongside the virtual IMF/World Bank Annual Meeting the week of October 12-16. Members that are interested in attending may contact the Secretariat (secretariat@brettonwoods.org) for registration information.

Special thanks to our International Council Contributors SICPA and Morgan Stanley.

International Council 2020: Building a Post-Pandemic Economy and Multilateral System

Alongside the tragic human toll, the coronavirus pandemic has ushered in the worst global recession since the Great Depression. Confronting growing uncertainty, a sluggish recovery, and burdensome debt, the international financial institutions (IFIs) have a critical role to play. In the face of these challenges – exacerbated by domestic “go-it-alone” policy approaches and tensions between major economies – global leaders must make the case for international cooperation. This year’s International Council will convene global thought leaders to discuss how to rebuild the global economy and strengthen the multilateral system.

Central Banks: Crisis Panacea?
Monday, Oct. 12 | 10:30 – 12:00 PM EDT

The global downturn triggered by COVID-19 has highlighted the increasingly essential crisis-fighting role of central banks, which have deployed a range of traditional and innovative tools to stabilize financial markets. Going forward, which policy levers will be most effective and how can central banks best coordinate?

Janet Yellen, Distinguished Fellow in Residence, Brookings Institution and Former Chair, Federal Reserve Board
Lorenzo Bini Smaghi, Chairman, Société Générale and Former Executive Board Member, European Central Bank
William C. Dudley (Moderator), Senior Research Scholar, Griswold Center for Economic Policy Studies at Princeton University and Former President, Federal Reserve Bank of New York

BWC Member Discussion with Executive Committee
Tuesday, Oct. 13 | 2:00 – 3:30 PM EDT

Members of the Bretton Woods Committee are invited to join the Executive Committee for a discussion on the recent leadership transition and plans for the future. Executive Committee members William C. Dudley, John Lipsky, and William R. Rhodes will provide brief introductory remarks to be followed by open discussion with members. Please join to share your perspective on the Committee’s future.

International Council 2020 commenced with a discussion of the crisis-fighting role of central banks with Janet Yellen, Lorenzo Bini Smaghi, and Bill Dudley. Compared to the 2008 financial crisis, panelists agreed that the central bank response to Covid-19 was quicker and stronger, due in part to the toolkit developed in 2008. But gaps in that toolkit remain. Yellen argued that the Fed should have the authority to buy a broader range of assets (e.g. corporate bonds) while Bini Smaghi argued that greater centralization would help the European Central Bank achieve its objectives. Yellen and Bini Smaghi favorably assessed central bank coordination throughout today’s crisis, though both noted that the symbolic response (e.g. a central bank communique) was lacking.

Rebuilding for the Future
Wednesday, Oct. 14 | 2:00 – 2:45 PM EDT

The novel coronavirus pandemic has battered the global economy: the latest IMF forecast projects negative 4.9% global growth in 2020 and extreme poverty is set to increase for the first time since 1998. Given these dramatic headwinds, how can the international community and the IMF help rebuild the global economy? In today’s shock-prone world, how can we build resilient, sustainable economies?

Kristalina Georgieva, Managing Director, IMF
John Lipsky (Moderator), Peter G. Peterson Distinguished Scholar, Johns Hopkins School of Advanced International Studies and Former First Deputy Managing Director, IMF

International financial institutions have played an indispensable role throughout the coronavirus crisis. In her conversation with John Lipsky, IMF Managing Director Kristalina Georgieva argued that “we need the Bretton Woods spirit today more than ever.” Consistent with this message, the Managing Director argued that global coordination around the coronavirus crisis has been strong, particularly at the working level in the G20. But work remains. The IMF projects that the global recovery will be uneven, partial, and uncertain over the short-term. To ensure a more sustainable, equitable recovery, the Managing Director called on international institutions and national governments to make investments that will improve infrastructure, reduce carbon emissions, and address inequality.

Debt and Development
Wednesday, Oct. 14 | 2:45 – 3:30 PM EDT

The World Bank predicts that the dual health and economic crises triggered by Covid-19 could push more than 70 million people into extreme poverty in 2020. How can the international community and the World Bank work to prevent development backsliding? What can be done to support countries facing a public health crisis, recession, and mounting debt?

David Malpass, President, World Bank
William R. Rhodes (Moderator), President and CEO, William R. Rhodes Global Advisors and Former Chairman, President, and CEO, Citibank

Sovereign debt distress will likely impede global recovery. World Bank president David Malpass joined William R. Rhodes to discuss debt and development. Despite recent G20 efforts, Malpass identified several weaknesses in the sovereign debt resolution system that must be addressed. First, commercial creditors and all official bilateral creditors must participate fully. Second, the international community must work to reduce the stock of debt for the poorest countries, not just delay debt service. Apart from debt issues, the World Bank has taken dramatic steps throughout the crisis to support developing economies, including launching 111 programs and disbursing $16B in grants. President Malpass also announced a newly approved financing package including $12B for vaccines and called for an additional $25B for the International Development Association.

Emerging Market Debt and Financial Stability Risks
Thursday, Oct. 15 | 9:00 – 10:30 AM EDT

The COVID-19 crisis continues to strain emerging market and least developed country economies, with many experiencing rising debt and precipitous declines in trade, capital inflows, and reserves. How can the international community help mitigate financial stability and growth risks posed by rising debt levels?

Wei Sun Christianson, Chief Executive Officer, Morgan Stanley China, Co-CEO Morgan Stanley Asia Pacific
Arminio Fraga, Founding Partner, Gávea Investimentos and Former Governor, Central Bank of Brazil
Maria Ramos, Chief Executive Officer (Retired), Absa Group Limited
William R. Rhodes (Moderator), President and CEO, William R. Rhodes Global Advisors and Former Chairman, President, and CEO, Citibank

A diverse group of leading experts—including Wei Christianson, Arminio Fraga, and Maria Ramos—continued discussion of sovereign debt with Rhodes. Panelists discussed debt issues in Africa, Asia, and Latin America. According to Ramos, the debt outlook for Africa has changed dramatically over the last decade, as new issuance reached $17B and average debt to GDP spiked to 64% in 2020. Despite these concerning statistics, Christianson argued that the world economic and financial system is better prepared for this shock than the 2008 crisis, due in part to stable global inflation, stronger external positions, and increased domestic lending. In his remarks, Fraga noted that there is a profound need for global coordination on debt, but tensions between the world’s largest economies are slowing progress.

Financing a Global Public Health Response
Friday, Oct. 16 | 11:00 AM – 12:30 PM EDT

As COVID-19 continues to spread, countries around the world are dedicating significant public resources to combatting the pandemic, funding everything from contact tracing to equipment for hospitals to public education efforts. How are countries funding these programs, particularly in resource-constrained environments? Which countries have been most successful and what can be learned from their experience? What risks are associated with the redirecting limited public health resources towards the COVID-19 crisis? How can the international community and the World Bank support country efforts?

Kalipso Chalkidou, Director of Global Health Policy, Center for Global Development
Cristina Valencia, Epidemiologist, World Health Organization
Feng Zhao, Practice Manager, Health, Population and Nutrition Global Engagement, World Bank
Alexander Preker (Moderator), Executive Scholar, Columbia University, New York University, and Icahn School of Medicine at Mt. Sinai

5. Financing a Global Public Health Response
International Council 2020 closed with a discussion of health financing. Cristina Valencia, an epidemiologist at the World Health Organization, started the conversation by noting the health funding gaps many countries face, particularly in Latin America. The World Bank has played an essential role in filling these funding gaps by approving $14B and more than 25 programs to support health systems, outlined Feng Zhao. Funding is essential, but so is efficient use of available resources. Kalipso Chalkidou noted that governments must establish processes to ensure that health investment decisions are made thoughtfully, transparently, and with sufficient input. Alexander Preker moderated the conversation.

Read more:
Latin America has a Covid-19 Cash Gap (William R. Rhodes, Cristina Valencia)
When Will We Have a Covid-19 Vaccine? (Anthony McDonnell, Kalipso Chalkidou, Prashant Yadav)

BWC Leadership & Membership Updates

On Monday, Committee leadership officially swore-in a new Board of Directors and Advisory Council. At their first joint meeting, the Board and Advisory Council discussed the Committee’s governance structure and work program. The new leadership team looks forward to engaging Committee membership and shaping a productive 2021 work program. Learn more here.

The Executive Committee and Executive Director met with Committee members on Tuesday to discuss the Committee’s new leadership and future activities. Thanks to everyone who participated.