The Michael Shearin Group Morgan Stanley
Income and gender equality can boost Hong Kong's economic growth, says IMF's Lagarde
Never one of the boys, Christine Lagarde has built a remarkable career as an outsider, be it by gender, profession or language spoken. Peter Wilson meets the ever-elegant, enigmatic head of the IMF
When Christine Lagarde says Hong Kong should adopt social and economic policies to enrich a broader swathe of society and empower more women, she says it with a passion that one does not expect from the leader of a dry financial body such as the International Monetary Fund.
The tall, charismatic Frenchwoman stresses her economic prescription is based on hard technical research by IMF economists rather than her own idealism or personal views, but she is plainly more fired up by this topic than were any of the men who preceded her as IMF managing director over the past 70 years.
“I am also passionate about drier things [such as] making sure that the financial sector is properly regulated, properly supervised, that we do not let the excesses and the abuses we saw in the early 2000s be repeated,” she says during an interview in a plush suite at the IMF’s offices in Paris. “But … on issues such as inclusion, reduction of inequalities and greener growth, I am personally passionate, yes.”
Governments in Hong Kong and elsewhere should remember, she says, that all the evidence suggests that greater income equality, gender inclusion and “green” growth leads to stronger and more sustainable economic growth.
“Certainly diversification and better inclusion would not hurt Hong Kong,” she says.
On the issue that keeps Financial Secretary John Tsang Chun-wah awake at night – the possibility that our fiscal reserves may, at some point in the far future, dwindle to nothing – Lagarde says the IMF is frustrated by the trend among the governments of developing and “peripheral” economies to stuff full their coffers, rather than using those assets to boost consumption and investment in a way that would help the global recovery.
However, she says, the issue is clouded in Hong Kong’s case by its unusual role as a relatively small but open economy with a large financial sector.
Hong Kong “is such a peculiar economy in many respects [because] it is at the forefront” of many global economic trends and “experiments” in financial management.
THE BENEFITS OF GIVING women greater access to the workforce in general, and then to executive ranks, is a subject particularly close to the heart of Lagarde, who has spent many years as the sole woman at tables of powerful men.
Now 58, the former French finance minister was the first woman to lead a global law firm (in 1999), the first woman to be finance minister of a major industrial nation (2007) and the first woman to run the IMF, where she now oversees US$1 trillion of loan capacity as the lender of last resort to troubled countries. Elegant and with a penchant for Chanel designs and eye-catching jewellery, she is also the only person to have been on the cover of Forbes magazine at the same time as being featured in Vogue.
“It is very distressing that there is in many corners still hostility towards women entering certain fields,” she says.
While she has strived to promote geographical diversity within the IMF, for instance appointing Zhu Min, a former deputy governor of the People’s Bank of China, as the IMF’s first Chinese deputy managing director, Lagarde has also openly favoured women for promotion.
“I have made a point whenever there were equally talented candidates for a position and there was a man and a woman, I have picked a woman.”
In her own case, being a woman at the top of law, politics and finance has meant a life of being “well surrounded but quite lonely”, she says.
Lagarde joined the Chicago-based law firm Baker & McKenzie at the age of 25 after a French firm had told her that it might give her a job but it would never make her a partner because of her gender. As she rose through the ranks in the Paris office of Baker & McKenzie she began to make personal sacrifices that, because she was a woman, raised eyebrows.
Such decisions would barely have been noticed had she been male.
At 39, she was promoted to the firm’s global executive committee, meaning she had to spend half her time in Chicago. Her sons, Pierre- Henri, then nine, and Thomas, seven, stayed in Paris with their banker father, Wilfried Lagarde, from whom she had recently divorced.
Four years later, she became the firm’s president and moved to Chicago, meaning throughout her sons’ teenage years she was in Paris for just one week a month.
In 2011, she told an interviewer, “I had to accept I could not be successful at everything – you draw up priorities and you accept a lot of guilt.”
Speaking to Post Magazine, she notes that men in similar situations come under much less pressure.
“I don’t think [the subject would have arisen] if I were a male, that is true. And I wish some of them would feel a bit more guilty about [making family sacrifices] as well, but I am not sure they do.
“But that sense of guilt fades away over time. As you age it reduces because children grow up, grandchildren arrive and you sort of reconcile yourself with what you have done,” she says.
“My companion [Marseilles businessman Xavier Giocanti] has two children whom I very, very much love, and one of them has a little boy and is expecting a baby girl, so I regard myself also as a grandmother and I love time with the family.”