Lagarde Calls for Greater Focus on Empowerment
She pointed out in the June 6 address at the London School of Economics that people will have greater chances of flourishing if more is done to empower individuals, national institutions, and the multilateral framework.
“Fundamentally, there are no shortcuts to a vibrant economy—it must be built up from the bottom up, from the empowerment of every single individual,” Lagarde stated. “We must do whatever we can to help people help themselves, to let people lift themselves up—through enabling policies, enabling institutions, and enabling modes of international cooperation.”
Income, gender disparities
Of the many obstacles to individual empowerment, those based on income and gender disparities are among the most pressing, Lagarde noted.
She cautioned that excessive income inequality can hinder individual empowerment because it is intimately connected to opportunity.
“In more unequal societies, too many people lack the basic tools to get ahead—decent nutrition, healthcare, education, skills, and finance,” often creating a vicious cycle whereby economic insecurity discourages people from investing in their own skills, noted Lagarde. Societies with high levels of inequality also see lower levels of contentment and less mobility across generations.
‘Win-win’ policies
As a result, “policies to tame excessive income inequality are win-win” and “can spur empowerment and economic advancement.”
Similarly, the fact that women earn only three-quarters as much as men and account for 70 percent of the billion people living on less than a dollar a day “is a matter of justice but also a matter of basic economics,” observed Lagarde.
Increasing women’s independence and empowerment means focusing on education, ownership rights, and employment opportunities outside the home. Lagarde also noted that “eliminating gender gaps in labor force participation can lead to big jumps in income per capita.” She referred to the IMF’s recent recommendations to boost female employment in Korea and Japan—“where women are still not visible enough.”
Stronger institutions
Given that a person striving to reach their potential has to navigate through a range of institutions, institutions play an important role in empowering people, Lagarde stated.
She noted that the IMF is working with...
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