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00:00This is my kitchen table and also my filing system over much of the past three decades. I've been an investor the highest quality of mankind. I've often thought as private equity. And then I started interviewing. I watch your interviews those I know how to do . I've learned in doing my interviews how leaders make it to the top. I asked him how much he wanted. He said 250. I said fine I didn't negotiate with him. I did no due diligence. I have something I'd like to sell and how they stay there. You don't feel inadequate now because the only the second wealthiest man to rise out right . The last several decades one of the most important people in international finance is actually not that well known to the public . Her name is Kristalina Georgieva. She was a senior commissioner of the European Commission. She was the chief executive of the World Bank. And now she is the managing director of the IMF . And in that position she heads an organization whose purpose is to help countries that have financial problems today because of a pandemic. There are many countries that have financial problems and there are many people that are calling. Kristalina you've been a senior commissioner of the European Commission . And now you're the managing director of the IMF. In getting these positions was it more difficult because you were a woman where you're from a small country called Bulgaria. Where was there more prejudice against being a woman or from Bulgaria . Well ultimately I got these jobs. So whatever the prejudice was they then called me back. If I am to make a call on that I would say being from a small country always requires to work twice as hard as others to prove yourself when you're growing up in a small country. And then behind the Soviet curtain iron curtain. Did you ever think that you would wind up in these kind of positions as a young girl . Did you imagine anything like this. David Even today there are moments when I'm pinching myself and by the head of the IMF coming from where I am coming from some not so many people don't know honestly what the IMF and the World Bank do. So can you explain what they actually do and why they're different and why we need them. So in the end of the Second World War in a beautiful place in New Hampshire called Bretton Woods enlightened leaders came together and said we have to help the world to not getting to war. And to do so we need to help the economy to perform better. And they created this to sister institutions the IMF with the mandate on financial stability growth and employment and the World Bank to invest in reconstruction of then war torn countries. So your job at the IMF is to take a country that let's say has financial problems say their economy is weak or they've had other kind of crises and you can help them through that difficult time by lending them money. And right now you have about 270 some billion dollars outstanding. Yeah. But do you actually get paid it back. So the lowest we provide are with very attractive interest rates because it is the money of our members. They extend to each other a helping hand for the poorest members. We charge no interest. These are soft loans much softer than the traditional IMF loans. Countries pay us back. The poorer countries have longer maturity and longer time to serve their loans to us. But what matters is not just the money. What matters is that we work with countries to make them . Stronger so they can repay with more ease and that is absolutely paramount for people to know about the fund. We are there to help countries to CAC strong economic fundamentals. Now there's some people who say that sometimes when the IMF has lent money in the past let's say to Argentina or Greece. The terms are let's say draconian. And there's a lot of I would say revulsion in those countries against a harsh IMF terms. Is that still fair or those things are the days of the past. Well the of course we learned from experience and one of the things we learned is that we've have to pay very close attention to the impact of programs on people . Policies are for people. Macro decisions have micro consequences. And we are integrating this much more into programs we do today. We think about social spending put the floor don't allow education and health to be so dramatically impacted that human capital of the country is eroded. Let's suppose I'm the president of a country and I would like some extra money. And can I call you up and say I like to borrow some money. And how hard is it to get the money. How long does it take. And are people afraid of calling you because their own credit ratings might go down if it's known that they have to borrow money from the IMF. If you are the president of a country in trouble you better call because if you do not have access to markets in some developing countries don't then the only way to boost your economy is to rely on the IMF the World Bank. Institution like us because this is an exhaustion is shock. It is truly an emergency. The way we respond is different from what we do when a country country's in trouble because it mismanaged state's economy. It is the fault of those that have been governing at that time. What we are asking countries is two questions. One. Please when you get the money . Prioritize your health system . And helping the most vulnerable people in the most vulnerable part of the economy to show me the receipts. What did you use the money for. We are advising countries to spend more but keep the receipts. We want accountability not just to us but to the taxpayers in the countries. And we have advance already financial lifelines to 75 countries in record short time. I mean in this place when a crisis knocks on the door we turn on a dime. We are the world's first responder in crisis. Now recently you have asked the G. 20 to more or less have a debt forgiveness situation so that some people that owe you money wouldn't have to pay it back . Why did you need to do that. When we got hit by this crisis . For poor countries . That is devastating. Twice as much as it is for countries that are wealthier. Why. Because one they have weak health systems too. They have very little capacity to respond on their own . And three a number of them have had high debt levels by that time. So the economy is in standstill . If debt service is not put in stents deals these countries have to decide do they pay doctors and nurses and save lives or serve their debt. And that is bad for them. But it is also bad for the rest of the world because a country in desperate situation falling to pieces turns into a security threat to its neighbors and the rest of the world. So we have lots of economists here . One of the economists here telling you about the state of the economy and the world because of the pandemic. Are we likely to have our kind of global recession for another year or so. We have some optimism on two grounds. The first one is . Exceptionally decisive action by central banks and by finance authorities. They put a floor under the world economy. We on our side had done our part for the countries that had more resources on their own. The second reason we are somewhat more optimistic today than we were a couple of months ago is that we see the world learning how to function with the pandemic. Still with us. But make no mistake the recovery is partial . And it is an even we are not going to see in 2021 return to pre covet conditions. And we are seeing big divergence parts of the economy doing really well and parts . Falling behind and this is my biggest concern that we may come on the other side of this crisis with more inequality . Higher debt higher deficits and a climate crisis still hanging on us if we are strong as a world. We ought to come together . A massive coordinated stimulus can make it so that we have a better economy on the other side than we had in 2019. How did you wind up in the Fiji Islands . I got the letter invitation to grow in Fiji. I had to virtually go to the map and see where Fiji was . So let's talk about your background . As I mentioned the outset. You grew up in Bulgaria. Bulgaria at that time was behind the Iron Curtain. So it was not a powerful country in the West and it was actually small and I think a relatively poor country. It turns out you were from a prominent family but not a wealthy family. Can you tell us a little bit about your background . So yes I was a daughter of ordinary people. My my father was a road engineer . My mother stayed at home to look after us. Modest means very happy childhood very loving parents . Yes. My family was prominent but I didn't know that until I was in my 20s . Why . Because my father was concerned that if we talk about the revolutionary who was my great grandfather and the fact that we can trace back our origins five centuries seem to the past that may not gel well with the power of the proletariat. So when you're growing up in Bulgaria and Bulgaria and that's in the 50s and 60s I did. Were you required to learn Russian. Of course . Of course . Yes. No I actually my mother was a Francophone so she sent me to learn French. I had some French when Gorbachev came to power in the Soviet Union and glasnost and perestroika came to Bulgaria. I was able to apply for a scholarship in the West. And in six months I learned English enough to pass to win a British Council scholarship to go to London School of Economics . That was incredible to be on the other side of the Iron Curtain and what I found out over there. Having access to information was that my country was broke. My country was so much deep in debt that I couldn't imagine how it is going to survive. Sure enough two years later . Bulgaria. The economy collapsed in Bulgaria. Turn the page away from socialism to market economy. How did you wind up in the Fiji Islands . Now that is a story. So when I was at the London School of Economics professor. Notice me as somebody who is not quite professional . He then became the dean of economics in the University of South Pacific in Suva in Fiji. Sitting there wondering how he can find highly qualified . Professors that are willing to work for very little money and so brilliant idea. Rob to this Bulgarian woman I got the letter the invitation to go and teach. I had to virtually go to the map and see where Fiji was getting from Bulgaria to Fiji. 1990 was an adventure. And so I'm landing in Fiji. I handed my passport to the passport control lady. She takes it type something looks at me and says where are you from. I said Bulgaria. She types again looks at me and says there is no such country . The first Bulgarian to go to Fiji. Now the professor really like me. He offered me a job. I still remember. He offered me a job. Sixteen thousand dollars a year . I had no idea of my market value at that time I was paid a hundred dollars a month but I still didn't take that job. Why. Because it was so far so far from Bulgaria. So I went back . I got a chance to go to M.I.T. to come to the United States and the rest is history. But did you ever say I'm not going back to Bulgaria. I'm now in the West and I'm going to stay in the West . Actually no I came to M.I.T. . With the idea to spend one year learn as much as they can and bring this knowledge back to Bulgaria I actually had the contract to write the textbook on environmental economics as an outcome of this visit. But the World Bank called me up . They offered me a summer job. I came for the summer. The fourth day I mean this consulting job. I got the call and I got an offer to stay at the bank. Why . At that time the bank was looking for environmental economist 92 Paul Sweeney real check. They were desperate for women . They were very male dominated. So check. And they were opening up towards the Soviet Union former eastern bloc Russian speakers check . So I took the job. I said well you know it's it. This is such an opportunity to work here. And then I did incredibly interesting jobs within the bank. I raced up in the in the ranks. And one day I got the call to go to Europe. What did you actually do there. What was your job . I had first the job of humanitarian crisis commissioner commissioner. And it was an incredible experience . I had the front seat position in all the terrible crises that were happening at that time from Haiti earthquake to the triple disaster in Japan to the Syrian war. And I I was able to mobilize the very best of Europe to help people in terrible need and reform the crisis response system of Europe. One of my strong memories of this time I mean in the village talking to a Syrian girl . Who wants to go back to school. But there is no schooling available . And I said to her her name was ISE. I said I should. I hope you would be able to go back to school. I walked out of there and I thought my hoping means nothing to her. My act would make a difference. And then we mobilize. Then we scaled up massively access to education for Syrian refugee children. Have you ever thought of running for office in Bulgaria. Are you happy where you are. I always take the job I have . What takes my full concentration. I pour my heart . So you're talking about Bretton Woods and how the IMF and the World Bank were created in the late 1940s. If you had been there then how would you change the structure for the IMF or the World Bank. And might you think there could be some time in the future when some of the structure might be changed to make it better. Well they were created very thoughtfully with institutions that evolve with time. Their shareholding changes as the world economy changes. What is required from us is to relentlessly pursue this adjustment. So the IMF in terms of its governance and the shareholding reflects the world of today . And that takes a lot of work bringing the membership together . The IMF has done a successful quarter adjustment. This is changing shareholding income and now is due to take stock again. So between now and 2023 that would be a very important job to do. So what percentage of the people who are on the staff or the Americans are from overseas. And what percentage are male and female and so forth . So we have just about 75 percent of staff from all countries in the world and around 25 percent Americans . Logically for many positions we recruit locally like for some of the assistance coordinators for the professional pool. We recruit internationally and competitively . Broadly speaking we are about the same men and women. But you wouldn't be surprised when we go up there more men than we head down. And this is something that I am Ziering on . When I came directors this is the layer of management that cause most important operational responsibility were 25 percent women 75 percent men . Now they are 40 60. And I would drive this pipeline of talented women not because I am obsessed with percentages but because they veracity matters. Having different regional perspectives having men and women working together makes us more effective . We make better decisions as a result. Historically the World Bank president was picked more or less by the United States administration of president of the United States and the head of the IMF was more or less picked by Europeans I would say. You foresee that that will change or that's going to continue for the foreseeable future. I think that there would be more and more demand to make this positions open for competition based on merits. And even if you take this round. Yes I am European . Europe aligned to nominate me but I'm a European from a country that in the mid 90s benefited from an IMF program. I do belong to emerging markets in emerging markets were very loud in supporting me for that reason. So I want to see that process to continue. Why. Because institutions are much stronger when the whole world believes they belong to all of us. Now China has become a major economic power I guess the second largest economy in the world. Does China have the influence in the IMF the World Bank proportionate to its overall global economy. Now what they have. They have increased their shareholding in both institutions. They have been also very active in supporting the institutions. In the case of the IMF China the US the rest of the world in this crisis stepped up significantly support for us to be able to extend concessional lending. And I see the engagement of China as as constructive . That is so very important when we are in the midst of the worst crisis we have had since the Second World War. So the IMF stands for the International Monetary Fund. Have you ever thought of changing it. They say it stands for. I am fair. I am friendly with now. I learned that most people here in the funds say it stands for. It is mostly fiscal . But I much prefer the definition you get. And actually this is what I would relentlessly work for. We the fund to always think of the people whose lives are impacted by the policies we recommend. You're the most prominent person in the West from Bulgaria as far as I know. Maybe there's somebody else but I can't think of anybody else. So I assume you can go back to Bulgaria whenever you wanted to and run for president of Bulgaria. I don't know if that's a better job than the one you currently have but you've ever thought of running for office in Bulgaria. Or you're quite happy where you are. I always take the job I have. As what takes my full concentration I form my hearty need. I never ever think of what next. So as long as I'm the head of the IMF . It is at the IMF and the membership that has my complete dedication .

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The David Rubenstein Show: IMF Managing Director Kristalina Georgieva

IMF Managing Director Kristalina Georgieva talks about how the global economy is trying to recover from the pandemic, China's role in the recovery, making the Fund more diverse and what it was like growing up behind the "Iron Curtain." She appears on the latest episode of "The David Rubenstein Show: Peer-to-Peer Conversations." The interview was recorded Sept. 15. (Source: Bloomberg)

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