Christine Lagarde on Why Women Will Save the Global Economy
For a long time women have not been thought of as having the right stuff for directing movies in Hollywood, making deals on Wall Street, or running things in Washington. It was too risky, many men grumbled, to let women handle huge budgets.
That’s part of why it’s satisfying to see Christine Lagarde capably holding the world’s economy in the palm of her elegant hand. Lagarde, a Paris native and a former member of the French national synchronized swimming team, was a lawyer before joining the French government in 2005. She served as minister for foreign trade, and for agriculture and fisheries, before becoming finance and economy minister.
If it had been Lehman Sisters rather than Lehman Brothers, the world might well look a lot different today. —Christine Lagarde
The 63-year-old managing director of the International Monetary Fund—the first woman to hold the position—has long criticized “hairy-chested” testosterone and says it should be politically incorrect for companies not to have women in senior positions. She passionately believes in women as a civilizing force; after the 2008 financial crisis she noted crisply that “if it had been Lehman Sisters rather than Lehman Brothers, the world might well look a lot different today.”
International Monetary Fund managing director Christine Lagarde in her office in Washington, DC.
One recent night, after a draining day of appointments, she sat down in her house in Normandy, poured herself a glass of good cider, and settled in for a long transatlantic talk with me about her ambitious agenda at the IMF, an organization of 189 countries with a lending capacity of $1 trillion to ensure financial stability, promote economic growth, and reduce poverty around the world. The divorced mother of two grown sons spent a year of high school in Washington, DC, and later worked at a top law firm in Chicago, so her English, like her fashion sense, is impeccable.
Government vs. Philanthropy: Whose Money Is More Effective?
In addition to collaborating with governments, Lagarde has a unique perch from which to observe the impact of private philanthropy. Are there areas in which it’s more effective? And what does she think are the best opportunities for private-public partnerships?
“Governments are generally in a position to move a lot of money around—as long as they are accountable to their taxpayers, voters, and parliamentary institutions—if they have it,” she says. “So the capacity to mobilize money is very important… Not to say that philanthropies don’t do a good job. When I look at the Bill & Melinda Gates Foundation, for instance, focusing on three particular diseases around the world that they want to eradicate, they are pretty damn efficient as well.”
Lagarde, seen here with world bank CEO Kristalina Georgieva in March 2019, is the first woman to hold her position—just as she was when she served as France's finance minister.
People don’t think of the IMF as a philanthropic organization, although it provides grants to local and international charities and works in disaster relief. Lagarde doesn’t blame them. “I think they are right and they are wrong,” she says. “They’re right in that we’re not investing in projects, for instance. And they’re wrong in that when we lend to low-income countries, we lend at a zero-percent interest rate. This is not pure philanthropy, because at the end of the day we expect to be reimbursed, but we charge zero interest, which very few institutions do, and certainly financial markets don’t. So by doing that we’ve taken into account the situation of the borrowers, and we try to help them.”
What works best to support and encourage growth? “We do three things,” she says. “One, we provide policy advice. Second, we give technical assistance and training, particularly to officials in countries around the world. And third, we provide lending for countries that are facing big economic crises and no one wants to lend to them. Now, when we give policy advice, we try to focus on stability and growth—prosperity of societies, if you will.’’
What Keeps Lagarde Up at Night
Rational problem-solving aside, what is it that keeps Lagarde—whose two predecessors at the IMF became mired in scandals, one financial and one sexual—up at night?
Christine Lagarde attends the annual meetings of the world bank group and the International Monetary Fund in Lima, Peru.
“Climate change,” she says swiftly. “If we are worried about our children and grandchildren, we have to be really alarmed at what is happening. And, I have to say, I met this young Swedish woman in Davos, Greta Thunberg, the 16-year-old who travels by train wherever she goes and who started a strike movement in Sweden and beyond. She made a 32-hour train journey to Davos. I was impressed by her obsession, and I think she has the right attitude when she says, ‘I don’t want you to pity us. You have to be panicked. You have to be terrified.’”
Humanity gives me hope, because I think people are capable of everything, including the best. And sometimes you get completely gobsmacked by what they can do when they want to be good.”
While Lagarde is worried about Thunberg’s message, she is inspired by her generation. “Humanity gives me hope,” she says, “because I think people are capable of everything, including the best. And sometimes you get completely gobsmacked by what they can do when they want to be good.”
Christine Lagarde speaks onstage during the Fortune Most Powerful Women summit
Another cause in which Lagarde herself is invested is female economic empowerment. “It can strengthen economies because if you bring more labor to an economy, you generate more value,” she says. “As a result of that, you grow the pie. Women have immense talents that society does not leverage. And we are impoverished by not having access to that talent.
“In Japan, for instance, you have some of the most well-educated, sophisticated women that you can think of. They don’t access the labor market, they don’t contribute to the economy, because it’s made difficult as a result of biases and an economic system that is working against them—because there are not enough childcare centers, not enough paternity and maternity leave, and so on.”
How to Be the Enemy of Excess
The greatest battle in which Lagarde takes part, however, is against the greed that has tarnished capitalism. Perhaps due to her longtime study of classics, she believes in the principle of measure, of equilibrium. “I don’t like excesses,” she says. “I don’t like abuses.” She wants to be a force in helping societies keep their equilibrium, “and not move in the abusive and excessive direction. I think one of the reasons many societies are suffering—one that has had an impact on growth, by the way—is the extreme inequalities that have developed over the past few decades.
Christine Lagarde shakes hands with Nigeria’s President Muhammadu Buhari.
“What concerns me is that there are so many things that are underneath that are rarely talked about, whether it’s domestic violence at all levels of societies, whether developing or advanced economies. When you look at the way in which women can be used as weapons of war, when you look at violence against women in general.”
I wonder if she ever lets residual sexism get her down.“No, I laugh,” she says. "I keep my head down, grit my teeth, and just keep working, keep helping. Because that’s what we have to do."
Photographs by Brigitte Lacombe; Styled by Ryan Young.
This story appears in the Summer 2019 issue of Town & Country.
*This article originally appeared on Townandcountrymag.com
*Minor edits have been made by the Townandcountry.ph editors