Rodrigo Rato, Managing Director of the IMF, at IESE’s Alumni Day
Taking Action to Create Stability

“Development in Europe could experience great advances in the future if individual EU states make better use of their work forces and offer them more incentives,” suggested Rodrigo Rato during the course of IESE’s Alumni Day celebrations.

In a session titled “The IMF and Global Stability”, the Managing Director of the International Monetary Fund (IMF) advocated a Spanish economy that took account of inflation and competitiveness differentials, stressing that Spain needed to make further efforts in the areas of macroeconomic policy and public spending.

Referring to the economy in South America, he paid special attention to the situation in Bolivia, which requires international investment in a “stable and realistic legal environment” in order to make proper use of its natural resources. "You can have private policies, public policies, combined policies, all kinds of policies," declared Rato. "The most important thing is to take the political decisions that will convert the policy into a reality. These are important decisions that must be taken urgently, but it is the country itself that must take them."

Bolivia needs this investment in order to develop its natural resources, and the Bolivian authorities must provide financing in order to guarantee the investment. For this reason, explained Rato, the IMF has offered to work jointly with the Bolivian Government.

His talk also included an examination of the situation in the United States, during which he pointed out that the country’s budget deficit, which has the potential to place the entire world economy in danger, will not worsen if the favorable results predicted for 2005 are actually achieved.

Global Stability

Rato explained that the IMF was equipped with a variety of tools that could be used to maintain global stability. He underlined the organization’s role as a forum for international economic cooperation, its work as the initial source of aid for countries with precarious macroeconomic policies and the help that it offers in resolving payment problems experienced by individual states.

The IMF Managing Director outlined the organization’s three main activities. Firstly, he stressed its important role in analyzing the financial and economic policies of each individual country. According to Rato, in its role as “overseer” it offers "assistance in identifying the risks and vulnerabilities faced by different countries and a fundamental instrument for the promotion of economic stability".

Secondly, Rodrigo Rato explained the cases in which the IMF provides loans, when one of the organization’s member states suffers an imbalance due to temporary payment problems.

Finally, he pointed to the IMF’s role as a body that can provide technical assistance to countries that lack the required skills and knowledge in order to implement strong economic policies.

Lee Kuan Yew, Minister Mentor of Singapore
Singapore: World Economic Nexus

“The Key of Asian success has been its willingness to embrace globalization,” stated former Prime Minister Lee Kuan Yew during a visit to IESE Business School.

“We became independent by a stroke of destiny,” he said, acknowledging that the formation of Singapore as an independent State was a result of them being asked to secede from the federation of Malaysia.

In 1965, facing a difficult challenge, Lee K. Yew and government officials saw the solution in the form of multinationals which would fulfill the need for investment and for factories which would employ unskilled and semi-skilled workers.

Texas Instruments was one of the first to set up factories there, creating a huge breakthrough. As other companies, such as Hewlett Packard and GE followed, Singapore started to feel the economic benefits of new jobs and production in their country. This path has made Singapore one of the major electronic exporters and the “leading producer of hard disk drives in the world.”

Let the Market Decide

A key component to Singapore’s growth and success was the strong education initiatives and policies implemented by the government. Lee K. Yew felt that the improvement of the education of the workers would have lasting effects, creating manpower for industrialization and forming a pool of more skilled workers.

“Education was the largest single factor that allowed us to make this progression.” The country focused initially on engineering and sciences, working to keep up with the constantly adjusting and changing modern world. They worked to identify the innate talents and qualities of their people and maximize them.

A second facet of this initiative was the push for a unified and coherent country with one language, English. The infusion of English throughout the entire country opened doors and opportunities for the people, allowing them to increase business with other countries, the former prime minister shared.

Today’s Challenges

Today, The Republic of Singapore is facing a new set of challenges. After the goverment created several large enterprises to create new jobs, they are looking for ways to divest.

Additionally, with the entry and increased competition coming from China and India, Singapore must create its own niches, deciding which sectors to focus on which will remain crucial in the future.

At the conclusion of the session, organized by IESE Dean Jordi Canals and with a brief presentation on Singapore given by José Manuel Basañez, Honorary Consul General of the Republic of Singapore in Barcelona, the former prime minister spoke candidly about the last few decades, reflecting “My life has been one of constant learning.”

The Continuous Education Program Expands
Right Across the Globe

The Alumni Association is accomplishing a long-standing dream: offering every one of its members access to the Continuous Education Program, its principal service and the one with which it is most strongly associated. As the school’s alumni travel further and further afield, program sessions are being made available in an increasing number of cities around the world.

As IESE alumni spread ever further across the globe, IESE’s Alumni Association is expanding the range of services and activities that it is able to offer to them. Its principal service, the Continuous Education Program, is now being made available on the five continents where IESE alumni live and work. Over the last academic year, the number, frequency and location of Continuous Education Programs increased around the world.

IESE is responding to the needs of its alumni in all the places that they have chosen to live and work, by creating new Regional Associations. These associations will offer alumni a bigger range and variety of activities and programs.

Last year, IESE professors traveled thousands of kilometers to attend meetings organized by IESE graduates, and the Alumni Association is grateful for their dedication. And where we haven’t been able to go to them, alumni have been able to link with us, by participating in various e-conferences via the Internet, which took place at one of the school’s two campuses. In addition to the ordinary program sessions, a number of well-known figures have come to IESE to offer their analyses of the current economic, political and social situations.

In an open debate on the European Constitution, IESE alumni were afforded the opportunity to attend a conference with the European Union’s head of foreign policy, Javier Solana, who talked about the importance of the new treaty and gave an impressive overview of the world situation and the EU’s stance on various issues. The Spanish Secretary of State for the European Union, Alberto Navarro González, also visited IESE on October 13, to dispel uncertainties regarding the EU’s future and to express his unreserved support for the text’s approval.

Another issue of interest to alumni around the world is China. No one can ignore the importance of this country, a manufacturing powerhouse for the rest of the world, which continues to grow in importance. In a number of sessions held for alumni in cities such as Munich and Vienna, Alfredo Pastor talked about China and its medium- and long-term influence. CEIBS Professor Jonathan Story also visited IESE’s Barcelona campus and gave his predictions on what China would be like in a few years’ time.

One last example of high-caliber speakers sharing their expertise exclusively for IESE alumni was a special session with Spanish government officials Pedro Solbes and David Vegara. Solbes, the second deputy prime minister and the minister of economy, and Vegara, secretary of state for the economy, both set out the government’s future economic plans. Solbes explained how the government was implementing new economic reforms to ensure that the growth rates of recent years would continue.

The 2006-2007 Academic Year

During the next academic year, IESE’s Alumni Association plans to increase the geographical reach of its Continuous Education Program. It will also further develop its e-conferences, so that all its members can access the most important sessions held in Madrid and Barcelona, along with the events held during the IESE Global Alumni Reunion, for example.

As in previous years, the program will be continually reviewed to ensure that it meets the requirements of the association’s members. So, over the next academic year, keep an eye out for IESE professors and invited guests discussing current issues affecting you – in a location near you.