- Keynote Speech by Deputy Managing Director Nigel Clarke at a Symposium on the Future of International Cooperation on the 80th Anniversary of the End of World War II, Tokyo, Japan, March 6, 2025
By Nigel Clarke
I would like to start with a deep note of appreciation for our host country: a pillar of regional and global stability, a tireless advocate of trade, a technology leader and innovator, and a nation proudly on the move. For the IMF, Japan is a true partner, always generous in its support for our work. To the people of Japan the IMF says: arigatō goza‑i‑mas—thank you.
As this conference reflects on the state of the world 80 years after the end of World War Two, let me also salute the post-war rebirth of Japan. Who in 1945 could have imagined the economic miracle that would come—and the transformation of former foes into friends and allies? Living proof that prosperity and friendship can triumph.
So much of the global progress of the post-war decades was the result of a grand experiment in economic cooperation whose roots traced back to a conference of forty nations at Bretton Woods, New Hampshire in July 1944. The core idea at Bretton Woods was both bold and simple: a system where interests would be secured not only by geopolitical heft, but by mutually beneficial cooperation. This is the core principle behind the creation of the IMF. It is the principle we still serve today.
After the war, reconstruction progressed rapidly, giving rise to new structures, new jobs, new trade, and new members. In 1952, Japan and West Germany were welcomed into the IMF’s family of nations.
The Fund played its designated part not so much by financing global reconstruction and development—that was the World Bank’s job—but by supporting financial stability. A system of regular peer review of national economic prospects and policies was transformed from the black ink of Article IV of our founding Treaty to a familiar and appreciated reality.
And thus were established the three core functions of the IMF:
- First, our macroeconomic surveillance, which would bring in many newly independent nations starting in the late 1950s, followed by the Russian Federation and all the nations of the former Soviet bloc in the 1990s, such that today it spans almost all countries—a global perspective unique to the Fund.
- Second, our support for macroeconomic programs to restore economic and financial stability to countries rich and poor alike when in distress, combining agreed policy actions to remedy underlying economic weaknesses with IMF lending and reserve creation—the latter again being a unique capacity bestowed upon the Fund.
- And third, our support for capacity development, most generously financed from the start by Japan, alongside others.
Through the many post-war episodes of mistrust and confrontation, the IMF has always remained a place where governance works; where information and knowledge are freely exchanged; where policy lessons from one country are shared for the benefit of many others; where efficiency meets effectiveness; and where members at odds with each other sit at one table and discuss matters calmly. This is the tangible, everyday reality of the Fund.
Over the years we have, of course, had both successes and failures, but I would argue that the former outnumber the latter. I think for instance of our programs with the UK in 1977, India in 1991, or Brazil in 2002, and indeed of the examples being set today by the former program countries of East Asia and the euro area. Successes, yet each difficult in its own way when crisis raged.
As finance minister of Jamaica during difficult times, I had the opportunity to see the Fund in action from the other side of the table. It was obvious to me then—as it is now—that the IMF teams had the knowledge, the experience, and the systems. They knew what they were doing.
At the Fund, one foundational reality is well understood: countries are not companies, and in hard times the hardships of the people must always be addressed. It is the IMF that provides the closest thing sovereign states have to a framework to secure a fresh start. It is a unique and vital function for the world.
And rarely does the IMF see a quiet moment. Today, as we confront a world of low growth, high prices, and high debt, we are warning countries that there is no room for complacency on inflation; advising them on how best to rebuild their macroeconomic buffers for the new shocks that will inevitably come; and getting more granular in our engagement on policies to lift productivity and create better jobs.
Colleagues, we are at a new time of great flux for the world economy, with many countries reassessing their approaches, including in the face of structural transformations related to technology, demographics, and energy. Across the globe, voters have voiced anger at high prices and, in some cases, mistrust for an internationalist system they perceive as elitist and exclusionary. A chasm has opened between aspiration and reality—and that, in part, is fueling a challenge to the old system, with all the attendant uncertainty.
So let me conclude by sharing a few forward-looking thoughts on how, as the world navigates these choppy waters, the Fund can help steady the ship.
Four points:
- First, in a tightly interconnected world, stability matters to everybody. Our mandate to promote international monetary cooperation sits at the heart of what we do, and has never mattered more than now, after 80 years of ever-closer integration. Like a fireman who douses a fire in one house and thus saves the neighborhood, when the IMF helps stabilize one country, it helps all others—we know how easily something small can become something big. The Fund is a seasoned repository of knowledge on how to do this, and so we shall remain. Whether it be crisis prevention through surveillance, crisis management through policy advice and lending, or resilience through capacity development, stability will remain our core mission. This means helping countries to design well phased and well communicated plans for budget consolidation; to maintain effective monetary policies to contain inflation; to safeguard external stability; to ensure financial systems are robust; and much more. This is our bread and butter.
- Second, growth requires stability and stability requires growth. Ultimately, the way to ensure that economies can create jobs for their people and shoulder debt is through robust trend growth. And here I mean growth built on productivity gains and efficient resource allocation, not temporary stimulus. At the IMF, helped by our new Advisory Council on Entrepreneurship and Growth, we intend to identify positive lessons wheresoever they may be, and share them across our membership—while also helping countries harness technological advancement, notably in AI. Smaller government footprints will help in some cases, as will smarter tax regimes, more efficient public spending and better infrastructure, stronger bankruptcy frameworks, simpler and better regulations, more flexible labor markets with strong social safety nets, and deeper, more liquid capital markets, including venture capital. It is a broad and ambitious agenda.
- Third, stability requires global macroeconomic balance. The IMF’s purposes include not only facilitating the expansion of international trade to contribute to the promotion and maintenance of high levels of employment and real income, but helping ensure that trade growth is balanced. Yet we live in an imbalanced world, with excessive external surpluses for some countries and excessive deficits for others, potentially sowing the seeds of future instability. At the Fund we understand that external imbalances reflect domestic imbalances, with some countries consuming or investing too much and others too little: a challenge calling out for the concerted deployment of the full macroeconomic policy toolkit. These are deep-seated problems, reflecting policy-induced distortions, exchange rates, institutional depth, reserve currencies, demographics, wealth and income levels, technology, culture, history, and more. We will continue to work with our members to lessen the degree of disequilibrium in their international balances of payments.
- Fourth and last, as the global system reconfigures, agility will be key. Already in recent years, as geoeconomic fragmentation set in, many countries coalesced into groupings of common interest. Now, the trend continues, with an increasing emphasis on regional trade and regional financing arrangements. In a variable-geometry world, the IMF will respond as needed, flexibly, including to serve regional needs and explore ways to strengthen the global financial safety net for the good of all. For 80 years, from the gold standard to flexible exchange rates, from engaging with advanced economies to rescuing emerging markets to supporting low-income countries, the Fund has responded to changing circumstances and evolved with the times. We will preserve this tradition.
In these four points I am offering a vision of an IMF that will remain faithful to, and be guided by, its core purposes as laid out in our 191‑nation Articles of Agreement—yet will be nimble, responding to the changing environment as necessary so that we can continue to serve our membership to good effect. So without further ado, let me leave you to reflect, perhaps, on my four themes—stability, growth, balance, and agility—and how they can fit together to shape a Fund for our changing times.
I look forward to hearing your discussions today—and will be particularly interested in hearing your thoughts on Japan’s role in this new world as a champion of regional and global economic cooperation.
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