The managing director of the International Monetary Fund (IMF), Christine Lagarde, has stepped out to condemn the plans of Donald Trump and similar leaders trying to restrict globalisation. Though not mentioning anyone by name, she was adamant that the plans by some world leaders – and aspiring leaders – to restrict free-trade in order to protect indigenous industries are hurting the global economy. Instead of shying away from the negative impacts of globalisation, countries should find ways round them. She called for governments to invest more in education and spend more on supporting its citizens via higher wages and more generous welfare packages. Countries like America admittedly won’t be able to compete with low-wage workers in China, India and other emerging markets, but that is only one side of the coin. Donald Trump has asserted that if elected president, he would increase tariffs and put a crackdown on Mexican workers and potentially, Mexican imports.
While at a conference in Canada, Lagarde said “There is a growing risk of politicians seeking office by promising to ‘get tough’ with foreign trade partners through punitive tariffs or other restrictions on trade. I am deeply concerned about this – not only because I was a minister of trade, but because trade has been at the heart of the IMF’S mandate for more than 70 years.” It has become apparent that citizens are beginning to kick against globalisation, evidenced by mounting support for Trump and the vote to leave the European Union in the United Kingdom. She further said that countries that had taken this route failed in the past and they will again. The overarching benefits of globalisation cannot be ignored for a skewed view of protectionism. “….we need to pursue policies that extend the benefits of openness and integration while alleviating their side effects.”