Transcription
We collectively, including the fund, did not appreciate the backlash against globalization that came from the fact that, yes, the world economy is doing better as a whole, but many communities were hollowed out because their jobs disappeared and there was not enough attention to them.
I'll tell you what I'm very keen not to see. Repeat. It is the same with artificial intelligence.
I'm Francine Lacqua and this is Leaders, the podcast that explores what drives the world's most influential people. Be sure to follow and subscribe so you never miss an episode.
This week I'm speaking to Kristalina Georgieva, the managing director of the International Monetary Fund, one of the world's most influential global institutions. The IMF is like a financial advisor and emergency lender for countries with a lending capacity of just under a trillion. The fund helps governments manage economic problems, prevent crises, and recover when things go wrong.
Since taking the helm in 2019, Georgieva has navigated one global crisis after another, from the Covid-19 pandemic to Russia's full-scale invasion of Ukraine and the latest conflict in the Middle East. Georgieva is a person responsible for bringing together the IMF member countries. So I wanted to understand what leadership looks like when success depends on consensus, how she approaches difficult decisions, and how the fund is thinking about some of the world's most complex geopolitical challenges, including Russia.
MD, Thank you so much for joining us on Leaders. Now. Institutions like the IMF live in this crossroad of, you know, politics, consensus and competing interests. So how do you see it? Is it, you know, is it a politician's job that you have or leadership job?
It is service to the membership. My job is to keep 191 countries together and get them focused on what is happening in the world economy, why it matters to them and what they can do. And I can tell you it is not an easy job. The work today feels more complicated. There are tremendous transformations taking place. The desire to come together, especially when uncertainty is so high, is incredible.
I mean, it's just a lot of people, right? If you have 190 people, is it all about compromise? How do you get people to talk to each other and actually agree on things?
The best ammunition we have is objective analysis so they can see where the world is headed. When we do our job well, that is when it is clearly a global public good. We have a huge responsibility to save it as we see it to rich countries, too poor countries, too big, too small. It is not the service of some and not others. Then we have the credibility and we have the trust of the membership.
You know, one thing we put on on this, that is what does the fund actually do? What we do is we care about the health of the world economy like a family doctor. So we go to countries, we take their vital signs, and then we say, okay, maybe you have to do a little bit more of this and a little bit less of that. We also have an emergency service. Countries get into trouble. We can come to their rescue. And we have done that for half of our membership almost over the years of our existence.
And so when I go to the doctor, I usually follow, you know, the advice. Not everybody does that. So you can go to a country and say like, look, I'm worried about it and say, I'm worried about this. And they can say, thank you so much. Bye bye. What we find is that countries that take seriously advice, like people who are following their doctor's prescriptions, do very well. Look at Europe. At one point we had countries in the crisis. Portugal, Ireland, Greece, Iceland. They followed what needs to be done. They took on very difficult reforms. Where are they today? The best performing economies in Europe.
So listen to your doctor. But, um, the doctor analogy, what you're prescribing is, is not it's not a syrup. Right. It's it's it's really hard. It's austerity. It's job losses.
Yes. First thing is they need to trust that it is in their interest, but to trust there has to be an engagement and an explanation. Bringing them on board. They have to feel that they can provide input in this decision, and then the decision may become different as a result. And then do everything in your power to reduce the negative impact, to recognize that zeroing in on the most vulnerable in society not only saves lives, but it improves the likelihood that people would move forward with less, less resistance, resentment, and cost.
What's your favorite quality in a leader?
It is. The buck stops with me that the ability to confidently say I take responsibility to lead. Ultimately, I will make a decision. It may not be popular, but if it is the right decision, I would lead with it. And I see that in many countries happening, and I see in countries where there is hesitance, what would the public say? And I believe that, uh, uh, strong leaders don't think about, uh, what next in elections. They think what is best for people. And actually, one feature of a good leader and I embrace it wholeheartedly is never ask people to do something you are not prepared to do yourself.
I have this memory. When Fukushima happened and in the first days it was very dangerous. I sent a team of emergency responders from Europe. I had to go to the European Parliament. I told them as I was sending them off at the airport, I am on the next flight. Why did you decide to go? Because I was sending a team, uh, to Japan at the time when no foreign dignitary would go, and I felt that sending the team was good, but not good enough. I should be also able to do that. And this is how that sense of we are going to do what is right is reinforced that when when those responsible stand by their decisions.
Are you worried that there's just one crisis too many? In the last six years we had Covid. That was 2020. Then you have the war in Ukraine, then you have the tariffs, and this year you have the Middle East War.
Yes, I am concerned that we are not completely internalizing yet that this is how the world is going to be. We are not going to get to a place where shocks are gone. And, uh, what should we do? I have been telling our members time and again, look, there are things you cannot influence, but how you take care of your own country. How you build the foundation to withstand the shocks. It is in your hands.
I always find it interesting to ask leaders about times when they've had to pivot from an initial call, or backtrack on a decision. And in September 2024, Georgieva had to do just that. The IMF announced they would conduct their annual review of Russia's economy and for the first time since a full-scale invasion of Ukraine in 2022. Now, that decision was really met with backlash. Reporting by the Financial Times revealed that several European countries, including Sweden, Denmark and Norway, criticized Georgieva and the IMF, saying the visit would be taking a step towards normalizing relations with the aggressor. Now, ultimately, the IMF decided not to go to Russia, but I wanted to know what the thinking was behind the trip.
I want to talk to you about Russia, because in 2024, there was a decision to to go to Russia. Russia's one of the members. And then there was a backlash. What was that moment like for you?
When we, uh, brought a program for Ukraine for support of Ukraine. What impressed me was that, uh, we got full support, of course, with the exception of, uh, one country. And what it demonstrated was that there is a recognition that the fund bears a responsibility to support countries in difficult position, especially when they are not necessarily the source of this difficulty. There was discussion whether we can do an assessment of the Russian economy, the regular assessment. And at that point, uh, it was, uh, a very, uh, tricky moment because the bombing was going in both directions. Uh, we decided to, uh, to delay. Uh, I think that at some point we will have the regular assessment, uh, restarted. Uh, uh, let's see when this point would be.
So was your decision not to go to basically look at the economy because of the bombs or because of the backlash among you?
When we had to make this decision at that time, there was bombing in Russia. Uh, I can say that, uh, I would have not responsibly sent a mission at that time. There was also a very, uh, important consideration. Can we objectively get all the information we need to complete this assessment? And the honest answer was no. We need to collect data on, uh, uh, trade, import, export. Russia was very reluctant to provide this data and that makes an assessment handicapped.
But do you feel sometimes like you're politicized more than you want to be?
In that particular case, no. Majority of our members, majority, uh, feel that the invasion of Ukraine was a watershed moment for the whole world. Never in our wildest nightmares, we would think that the military power in Europe would attack another country. Never. But that happened. And that watershed moment brought the membership at the front together to recognize that we have a duty of care for Ukraine.
Is there something in the psychology of people that's changed for, you know, multilateralism, for the elite, for institutions like the IMF?
What I can tell you is that, um, we collectively did not appreciate the backlash against globalization. That came from the fact that, yes, the world economy is doing better as a whole, but many communities were hollowed out because their jobs disappeared and there was not enough attention to them. Uh, I'll tell you what I'm, uh, very keen not to see repeated is the same with artificial intelligence. I hope we will have learned this lesson. And, uh, as we move very rapidly into this world of artificial intelligence, we will pay attention of who benefits and who doesn't.
Uh, so whose job is that? Because it's very difficult. It's going so fast.
I can tell you how we define our job. Number one, impact of AI on productivity. Number two, impact on labor market. Number three, impact on financial stability. And in these three areas, we offer, uh, very, uh, sound analysis. And we offer, uh, signals of what may be coming up for everybody to, to use.
Uh, so if you just focus on leadership right this is a very tricky situation because you're either an optimist and you think that politicians are here for the good of the people or trying to make a difference. You're either a pessimist on politicians and you see, okay, they just want to be popular and be re-elected. But now you've given the power of AI to companies that are here to make money. So it's hard to say we have given them the power.
The honest assessment is that they have moved very rapidly. We need to have, uh, more attention to the fact that three different regulatory models are emerging with regard to artificial intelligence: the European, the American, the Chinese. Uh. It has to be the responsibility, uh, of the United Nations system to bring these three models, uh, so they can coexist. And they can they actually we can run, uh, the, the, uh, developments in artificial intelligence more responsibly.
But does it change, you think the leadership of countries or the leadership of prime ministers and presidents because they they don't have any control over it. They don't have the levers even to do anything about this.
We do have, uh, levers. We should not give them a pass. They have, uh, regulatory authority over data. No, uh, they have, uh, regulatory authority over how the profits from AI can be distributed in society. So exercise it. One thing that excites them and gets them to move is risks to financial stability is something that we have responsibility to identify and then offer solutions.
What can we do? The IMF isn't your typical organization. It's a global institution serving nearly 200 countries, balancing politics, economics and competing interests. So how does such a broad and diverse group of stakeholders shape the way you lead?
You have many employees at the IMF. It's not really like a, you know, business sense, like we're in the City of London because it's more bureaucratic just by the nature of it. Is have you changed it? Does it change the way you work in terms of flows?
Well, there are two things. I hope when I'm out of the fund they would still stay. The first one is that very simple message that policies are for people. I grew up in Bulgaria, on the other side of the Iron Curtain. My mother lost all her savings because of hyperinflation. I remember queuing 4:00 in the morning to buy milk for my daughter. I saw firsthand how devastating bad policies are for people. And the second thing I hoped would stay is a team culture. Of all the places I worked. This has the highest degree of discipline. It's like a small army. Once the decision is taken, we move. There was when I came, I had that sense that there are structures within the army that act on their own, but there isn't enough collective engagement. And we are not making best use of the totality of our skills. So we have built that sense of, of, of a team, uh, that especially in these difficult times, comes together. We make decisions, uh, together.
How did you change that? Because it's something very difficult. Right? It's almost in the DNA of any organization that it's collaboration, but that people feel they want to be part of it.
You have to invest in bringing the team together. We have regular meetings of the senior management team. We have leadership training, something that was seen when I was in like there, you know, we are wasting our time. Now, bring people together. You are leaders. You have to solve problems together. Put your minds on that, uh, by making sure that we respect every opinion. Uh, when I came, that's very interesting. So I'm sitting in my conference room. People come in, some seated at the table, some sit behind. I think, what the. Why is that? Why is it first come, first serve? Well, this level of seniority at the table, this level of seniority in the seat behind making the younger generation feeling that their voice is heard. Uh, that really matters. And then bringing a degree of informality. When you're in a crisis, you have to feel comfortable to reach out to everybody, including to the managing director. I'll tell you, I do things that are non-conventional. We would go out and we would dance. It is everything that makes break the barriers. Uh, helps when you do this and you as a leader. People can see you. You're there. Everybody shows up. And that creates a very different dynamic. Doesn't happen overnight.
Looking back at your career so far, is there anything that you that you would do differently? Is there a problem that you wish you could have solved? Is there a country that you could have helped sooner?
The most impactful of my jobs was being commissioner for Crisis Response and Humanitarian Aid. The one thing I regret is that some of the lessons I learned on the way I didn't learn earlier. Uh, the most beautiful lesson I learned from a 13-year-old girl, Syrian girl in Lebanon. I was talking to her and I was asking her, what does she want? And she said, I dreamed to go back to Syria and go back to school. And at that time, my answer was, I really hope you can do it. And then I walked out and I said, wait a minute. My hoping does nothing for her. So I put all my energy to create the program for Syrian children. Look, Francine, I spent too many years, sitting in rows of very important people, listening to what they say and thinking, well, you know, they're so important, they must know better. And sometimes, being shy to speak up. What is the moral of this lesson? When there is a problem, embrace it. If you can work for a solution, do it. Do not hesitate.
In a profile written back in 2022, you describe being late to recognize the importance of gender equality as one of your, I guess, regrets. What shifted your perspective?
Well, what shifted my perspective was, uh, being time and again the only woman in the room and looking around and saying, this is not going to change by us just waiting for change to happen. Actually, since I came to the fund, uh, guess what? We are now just about 40% women in senior positions. We were at 25 where I started. I came to this recognition also as a good economist, because when we don't have women in the labor force, when they don't add their smarts, uh, to decision making, uh, uh, we all lose.
I mean, last year's Fortune Most Powerful Women summit, you also said that Christine Lagarde broke the glass ceiling, and that when you stepped in there, there were no scratches left. So what did you mean by that?
When I came as the second woman to lead the IMF, uh, half jokingly, one of the men said, are we going to ever have a man managing director? Uh, to which my answer was, well, if you want to average it, uh, you will have to wait some 60 years and then it is again yours. Your turn.
MD, Thank you so much. I have some rapid fire questions. Are you ready?
Of course.
What's the most important question you ask or tactic you have in an interview?
To figure out if they're the right person for the job, I ask. What would the person that doesn't like you say about you? And what would? Why would the person that likes you say about you?
If I asked you that question, what would you say the person said?
Those that don't like me, uh, likely, uh, to say, uh, she is, uh, uh, too pushy. She interrupts people when they speak. She's too impatient. So, yeah, that's what they think. There are people that like you. They would say that, uh, I'm fun to work with.
Uh, what's the job you did not get that you would have loved to have done?
I can tell you a job that that I ran for. I didn't get it. Later on, I was delighted I didn't. I went to Australia to apply for a position as a professor in an Australian university. I didn't get it. And just a month later, I went to the United States to have it. And the rest is history.
What keeps you up at night right now?
I wake up worried that not yet people understand that we have to think of the unthinkable. Because the unthinkable has happened and it will happen again. I worry what is the next shock to hit? I don't know what it would be. I just know there would be one. And I worry that I'm not doing enough to get people to say, wake up.
Kristalina Georgieva, thank you so much for joining us.
Thank you.