Benefits of globalisation trump flaws, insists IMF
The head of the International Monetary Fund (IMF) has warned that a backlash against globalisation is destined to fail, and that protectionist policies and closed borders are "not the way to go".
In a speech delivered in Toronto, Canada, yesterday, IMF managing director Christine Lagarde championed the benefits of "openness and integration" while stressing that countries need to work to alleviate the negative "side-effects" of globalisation - including concerns over wages and jobs.
"The ability of countries to rise above narrow self-interest has brought unprecedented economic progress over the past 70 years," she said.
"History clearly tells us that closing borders or increasing protectionism is not the way to go. Many countries have tried this route, and just as many have failed.
"Instead, we need to pursue policies that extend the benefits of openness and integration while alleviating their side-effects. We need to make globalisation work for all," she said.
Economic integration has lifted living standards even in advanced economies, she said, explaining that more efficient spending has helped increase productivity and lower consumer prices. Globalisation, Ms Lagarde added, has also helped raise real incomes.
Ms Lagarde's comments come just months after the Brexit vote, the result of which many experts have put down to a backlash against globalisation and further economic integration.
The IMF managing director was a strong supporter of the UK remaining part of the European Union, having warned of the downward economic risks of Brexit. She also rebuffed claims that migration had a negative effect on the labour market.
In her speech Ms Lagarde acknowledged some of the risks associated with globalisation - increased inequality and downward pressure on the wages for low-skilled workers amid overseas competition.
But economic reforms could help ease those "side-effects" she said.