GENEVA, June 14 (Xinhua) -- The head of the International Monetary Fund (IMF) told the International Labour Organization (ILO) Friday that providing financial security to citizens to foster harmonious social relations is a lesson going back to the ancient civilizations.
IMF managing director Christine Lagarde was speaking at the annual International Labour Conference (ILC), and she praised the ILO for serving "the noble cause of social partnership and social justice" for 100 years, on its centenary.
"You were founded after the First World War, on the premise that lasting peace is founded on social justice. We were founded after the Second World War, on the premise that lasting peace is founded on economic cooperation between nations," said Lagarde.
The IMF head, referring to social spending, said that public pensions can make all the difference between poverty and a dignified life for the elderly while noting that her observations were not a new insight.
"Health care does not just save lives; it extends them and improves their quality. Primary and secondary education give our youngest citizens the opportunity to reach their full potential and contribute to society," she said.
"At a deeper level, I would argue that social spending is a core component of the social contract needed to fulfill the missions of our respective institutions."
She noted, "The importance of providing financial security to citizens to keep the peace and foster harmonious social relations is a lesson that goes all the way back to the ancient civilizations."
The IMF chief said that for the resilience and growth of economies to be sustainable, the growth needs to be "inclusive -- which calls for social spending" and this, in turn, provides the social and "political buy-in" for growth-supporting policies, thereby building trust.
Lagarde said that social spending matters for the bottom line as the world today is assailed with new challenges.
She named some, "More retirees, fewer workers; the effects of technology on work and wages; rising inequality and demands for greater fairness; barriers to women participating in the economy and realizing their full potential; the existential threat of climate change; diminishing trust, rising discontent, and a turn away from global cooperation."
Therefore, said Lagarde, social spending must take its rightful place at the center of macroeconomic policy discussions.
