Christine Lagarde – Economic Equity and the International Monetary Fund | The Daily Show
-Welcome to the show.
-Thank you. It is not often
that I sit across people who have access
to a trillion dollars. Is this a good time
to ask for a loan? -Is this… is this
when I do it? -(laughter) For those who don’t know,
what is the job of the IMF? -Do you want a teeny, tiny bit
of history? -Of course. Okay. We just celebrated the
Second World War anniversary, -75th… 75 years ago.
-Right. We are celebrating
our 75th anniversary, as well. -Oh, wow. -Because what happened
at the time, countries decided
that fighting each other, killing each other
was probably not the way to go. Because it all started
with a bad economic situation. -Yes. -So, they thought,
rather than do that, why don’t we set up a club, give it a lot of money and have competent people, number one,
give some economic advice, number two, give some loans -in case any member of the club
is not doing so well. -Right. And, number three, ask them
to give technical assistance. That’s what we do. We try to help countries
with better prosperity, and we try to help
with financial stability so that the world is not going
in too bad a direction. It’s interesting
that you got this job at a time when the world
was going in a bad direction, because you took over, like, basically at the peak
of the financial crisis. And some people have-have said
that’s another example of– I don’t know if you’ve heard
of it– the glass cliff. You know,
you have the glass ceiling, and they say the glass cliff is
when something goes really bad, and then they give the job
to a woman. -They’re like, “All right, you
can have it now.” -Correct, yes. -Yes. Oh, okay. Great.
-You’re right. Oh, yes. -(both laugh)
-(applause) Did it… did it feel like
you were stepping into a job where you were destined to fail? ‘Cause you’ve succeeded now, but, I mean, at that moment,
was it terrifying? It was intimidating, yes. But your point is so right. Whenever the situation
is really, really bad, -you call in the woman.
-(cheering and applause) And… And the woman did a great job.
I mean, you came in… No, you-you’ve been lauded
as someone who is not just, uh, you know,
apt at handling money and understanding the cause
of the world, but you’ve moved
the IMF forward. I mean, you know,
the IMF was once regarded as an institution
that was only dealing -with African countries,
et cetera. -Mm-hmm. But recently,
the IMF was bailing out Greece. The IMF was helping countries
in Europe -that have been struggling.
-Yeah. When you look at the challenges
the world is facing now, what do you think
we need to be looking out for that could lead to the next
conflict based on economics that’s-that’s causing people to just, I guess,
flare up in different ways? I’ll tell you what I think are the two key priorities
going forward. -Number one is climate change.
-Mm-hmm. Number two
is rising inequalities. If we could fix
those two things, it might significantly improve
the position. How do you begin
to fix those things? Well, I’ll give you an example
on climate change. Around the world,
you have roughly… uh, $5 trillion that are being spent
on subsidies to burn fossil fuel. This is not a good use
of public finance. Instead of that,
you should put that money in health, in education, in hospitals, in infrastructure. -That is a lot of money. Yeah.
-Right? It is a lot of money. But someone might say to you, “Yes, but they’re giving
that money “to fossil fuel industries because they need
to boost economies.” Why do you think,
from your experience, it’s more important to be
investing in social, you know, social ground, social ideas
that move people forward, like hospitals,
like schools, et cetera? Why…
How does that help an economy? Well, first of all, it helps
by reducing the inequalities. If, uh, young kids
in all countries of the world, particularly the low-income
countries, can go to school, -they will be better off.
-Right. If, uh, women, for instance, can actually– instead
of walking miles to get water, as is the case
in so many countries, -can actually access a road,
a highway -Mm-hmm. and go and fetch water without
having to spend all that– -all those-those hours.
-Right. If kids are born in hospitals where there is a-appropriate
care, then, clearly, they’re going to be better off
for the rest of their life. So, by doing that, you improve
the prosperity of people not today, maybe not tomorrow, but in five and ten years’ time. Because that’s critically
important for the future. You have to have a long-term
view in your job though, because you’re working
with so much money and you’re working
with the future of countries and the world. One of the issues
you’ve been vocal about has been the trade disputes
happening right now, -especially between America
and China. -Yeah. And you actually said to both of
the boys leading their countries -they both need to calm down
-Yeah. and they need to work this out. Now, on the American side– I can’t speak
for China’s policy– but I know,
on the American side, Donald Trump’s argument has been they have to impose these,
um… these trade policies. They have to–
they have to block China, because, uh, American industries
are suffering and they have to impose
these tariffs. How do you respond to that? And-and what do you think
a possible solution could be, for the small business owner/the
industries that are feeling it and the economy and
the global economy at-at large? Mm. Well, I’d say two things. One is, um,
President Trump has a point -concerning…
-Wait, wait, wait, wait. -What? -Yeah, yeah, yeah, yeah,
yeah. Yeah, yeah, yeah. -(laughing)
-Because– Yeah. No, he has a point, um, -on intellectual property.
-Yes. It is correct
that nobody should be stealing intellectual property
to go ahea– to move ahead. -Right.
-He has a point on subsidies. You cannot just go about
competing with others out there that are being
heavily subsidized. So, on those two points– You-you can’t, either, say, “Well, welcome in my country, “but you’re only going to come “if you’re going
to transfer technology. “And this is compulsory. -You have no option.”
-Right, right, right. So, on these three points,
the game has to change. -Mm-hmm.
-The rules have to be respected. But where it doesn’t work
is when you say, “I’m going to raise tariffs.” Because the impact
of raising tariffs is not going to be on China. The impact is going to be
on those companies in the United States
that are importing goods -from outside the U.S.
-Right. And the ultimate person
who will bear the brunt of those tariff increases
are the consumers, and particularly
the lower-income consumers, those who need to actually buy
reasonably cheap products because they can get by
with those products. And they are the ones
who are going to actually suffer the consequences
of tariff increases. So I’m saying to all those
involved in trade discussions, you know,
we need adults in the room. -Uh, you need to hear…
-(chuckling) (laughter, applause) You need to hear? You need
to hear the economic facts, not focus on one or two numbers, -but look at the overall
picture… -Mm-hmm. …and understand that
if-if you actually do that, you’re going to give a little
haircut to the global economy. We’ve calculated
that if there is tariff on the entire business
between the U.S. and China at 25% as is threatened–
already applied on some– it’s going to shave off about half a percentage point
of growth. That’s the equivalent -of removing South Africa
from the planet. -What? Yeah. In terms of size, that’s the equivalent
of the GDP of South Africa. Why did you choose South Africa? (laughter) You made it personal. Wow. You-you… you are always
dealing with such a big issues. I mean, it is
an International Monetary Fund. One of the main things
that you have been a driver of, one of the main issues has been
empowering women. -And not in a charity sense.
-Mm. -But in a business sense.
-Yeah. You know, you very famously had
the-the quote where you came out and said, “If Lehman Brothers
was Lehman Brothers and Sisters, maybe they would have done
a little bit better.” -Yes.
-Right? Why is it so important for
countries to invest in women, beyond the niceness of it all? Yeah. I’ve given up
on the morality -and charity side of things,
because… -Oh, you have? -No. I’ll tell you why.
Not personally. -(laughter) But because it doesn’t seem
to impress people. -Yes. -So I said, “Fine.
You’re not impressed by that? It’s a moral imperative.
You’re not concerned? Okay.” Now, let me tell you
that if, on the economic side, you increase the size
of the economy, you improve the income per
capita, each individual… -Mm-hmm.
-…in-in society, and if, at the company level, you actually get a better profit
at the end of the year, because there will have been
women on the board or women in the executive team,
aren’t you concerned about that? I don’t know yet,
and I’ll have to meet yet the leader of country who says,
“No, I don’t want more growth. “No, I don’t want
a larger economy. No, I don’t want
to distribute more income.” -Right.
-They all want the same thing. So bring the women. If you look at the participation
of women in the economy, you usually have 15% difference. -If you look at the wages
of women versus men… -Mm-hmm. …same job, same effort, you have
at least 16% difference. Why is that? This is a complete waste
of time and waste of energy
and waste of resources. So, women have to be given
the same opportunities, be given the same salary, and have the same exactly right
as men. (applause and cheering) (applause and cheering) Thank you so much
for being on the show. -Thank you.
-Wonderful having you. Good luck at the G20. Christine Lagarde, everybody.