In a crisis like no other, our response is to lean forward, to provide emergency financing, especially to countries that are faced with the toughest circumstances, that are highly dependent on exports of commodities or tourism, with high levels of debt, or very fragile economies. Because this is an exogenous shock, we are not going to ask for the traditional I.M.F. conditions. Instead, we ask only two things: Please pay your doctors, your nurses, improve your health system and help the most vulnerable people and the most vulnerable parts of the economy. And then please keep the receipts. In other words, be accountable to your citizens for the money the I.M.F. has extended to you.
Of course, we cannot lend to countries if their debt level is so high that we are just making it harder.
At the I.M.F., our membership did come together. Our advanced economies extended more financial capacity for us. They gave us money for grants. Twenty-nine poorest members of the I.M.F. now do not have to pay us back to serve their loans because of these grants. And when we asked that our membership triple our concessional financing capacity, they did it in record time — in two months — and they actually gave us even more.
You’ve spoken before about the importance of a country’s “strong fundamentals” when it comes to weathering a crisis. What do you mean by strong fundamentals?
When we talk about strong fundamentals, we mean countries putting in place policies that are conducive for growth and employment. They are transparent. The government is accountable to the citizens, and the fiscal balance is what any responsible family would do with its own finances: You spend only as much as you can afford. Countries that borrow invest the money they borrow into productive assets like education, human capital, health, infrastructure and the conditions for the private sector to flourish.
In March, there was such a panic that nobody would lend money to anyone, good fundamentals or bad fundamentals. In April, the markets opened up once advanced economies put in big financial packages. For countries with strong fundamentals, borrowing at low cost once again became possible.
You have championed gender responsive fiscal policies like subsidized child care and parental leave. Why?