The world’s leading economic policymakers are “on the right track” to ensure a global financial upturn, the chief of the International Monetary Fund told a Stanford audience on Tuesday.

But she warned the recovery will be derailed without the creation of more jobs, better education systems and a way to shrink the gap between rich and poor. And she cautioned against the potential pitfalls of untested exchanges and digital currencies such as Bitcoin.

“We are on the right track, but we need to ask – the right track to where? And the right track to what growth?” said Christine Lagarde, the IMF’s managing director. “Will it be solid, sustainable, and balanced – or will it be fragile, erratic, and unbalanced? To answer this question, we need to look at the patterns of economic activity in the years ahead, and especially the role of technology and innovation in driving us forward.”

Lagarde’s visit to Stanford was co-sponsored by the Freeman Spogli Institute for International Studies and the Stanford Institute for Economic Policy Research. In addition to delivering public remarks at FSI’s Bechtel Conference Center, Lagarde met privately with faculty and students during the day.

Just returning from the G-20 summit in Sydney, Lagarde said she is optimistic that the world’s economic leaders are committed to taking the steps that will guard against another large-scale financial collapse. She said the G-20 members agreed to complete a set of financial reforms by the end of this year, a move that will make the “financial sector safer and less likely to cause crisis.”

She said the member countries and their central banks have also agreed to better cooperate and be more transparent in their policymaking.

But she’s worried that unless more sustainable jobs are created, economic disparities will increase. And that, she said, will “harm the pace and sustainability of growth over the long term.”

As technology has helped create a more interconnected world, it is playing an increasing role in the economic landscape. Machines have made our lives easier. Artificial intelligence has led to cars that can drive themselves, robots that can do things in place of humans and smartphones that are more powerful than the first supercomputers.

But so far, there’s been no measure of how new technology has increased productivity.

“We certainly need to keep an eye on this,” she said. “One of the biggest worries is how this technological innovation affects jobs. Put simply: will machines leave workers behind?”

She said technology creates “huge rewards for the extraordinary visionaries at the top, and huge anxieties for workers at the bottom.”

Lagarde said it is up to educators to better prepare the next generation of workers.

“Educational systems are not keeping pace with changing technology and the ever-evolving world of work,” she said. “We need to change what people learn, how people learn, when people learn, and even why people learn. We must go beyond the traditional model of students sitting in classrooms, following instructions and memorizing material. Computers can do that.”

Instead, humans must “outclass computers” in cognitive, interpersonal and sophisticated coding skills, she said.

“Think of creative jobs, caring jobs, jobs that entail great craftsmanship – imagination,” she said. “And given the rate and pace of change, we will need the ability to constantly adapt and change through lifelong learning.”

She called on institutions such as Stanford to play a key role in the process.

“Stanford’s model of education was innovative from the very first day—co-educational, non-denominational, and always practical, focusing on the formation of cultured and useful citizens,” she said. “Stanford was ahead of its time back then. I know that it will continue to be ahead of its time as we venture into the exciting period ahead.”

But that exciting period carries with it uncertainty and risk.

Asked about the role that emerging digital currencies such as Bitcoin could have on the evolving economy, Lagarde was skeptical, calling it a “shaky and wobbly” system.

The currency’s trading website went offline this week, spooking investors and calling into question Bitcoin’s future.

“It’s a glamorous, sexy attractive new system,” she said. “But a monetary system is a public good. It has to be supervised and sufficiently regulated so it is accountable. At this point in time, I think Bitcoin is outside that perimeter of both supervision and regulation.”

Lagarde is the 11th managing director of the IMF, and the first woman to lead the 188-country organization. Since she took over the organization in 2011, she has played a role in the world’s most pressing financial matters, working on solutions to a sluggish global economy and the debt crises in Europe.

The IMF gives both policy advice and financing to countries in difficult economic situations. It also helps developing countries reduce poverty and become more economically stable. 

The organization is now poised to assist Ukraine, which is at risk of running out of money to pay its bills in the midst of a political crisis. The country is struggling to cobble together a temporary government in the wake of President Viktor Yanukovych leaving Kiev and being removed from power.

But until a provisional government is formed, the country cannot technically ask for help. When it does, Lagarde said the IMF will send “technical assistance.”

“We are ready to engage,” she said.

William J. Perry was only 18 when he found himself surrounded by death, a young U.S. Army mapping specialist in Japan during the Army of Occupation. The atomic bombs had been dropped on Hiroshima and Nagasaki and World War II had just come to an end. 

“The vast ruins that once had been the great city of Tokyo – nothing, nothing had prepared me for such utter devastation that was wrought by massive waves of firebombing rained down by American bomber attacks,” said Perry, who was then shipped off to the island of Okinawa in the aftermath of the last great battle of WWII.

More than 200,000 soldiers and civilians had been killed in that closing battle of 1945, codenamed Operation Iceberg. 

“Not a single building was left standing; the island was a moonscape denuded of trees and vegetation,” Perry told a rapt audience during a recent speech. “The smell of death was still lingering.” 

The young man quickly understood the staggering magnitude of difference in the destruction caused by traditional firepower and these new atomic bombs.

 “It had taken multiple strikes by thousands of bombers and tens of thousands of high explosive bombs to lay waste to Tokyo,” he recalls. “The same had been done to Hiroshima and then to Nagasaki with just one plane – and just one bomb. Just one bomb. 

“The unleashing of this colossal force indelibly shaped my life in ways that I have now come to see more clearly,” said Perry, who would go on to become the 19^th secretary of defense. “It was a transforming experience. In many ways – I grew up from it.” 

William J. Perry in 1945 in his U.S. Army Air Corps uniform.

William J. Perry in 1945 in his U.S. Army Air Corps uniform.  Photo Credit: U.S. Army

Now, nearly seven decades later, the 86-year-old Perry has come full circle. His new winter course will take students back to his fateful days in Japan after the United States became the first – and last – nation to use atomic weapons. He’ll go through the Cold War, the arms race and expanding nuclear arsenals, and today’s potential threats of nuclear terrorism and regional wars provoked by North Korea, Iran or South Asia. 

Living at the Nuclear Brink: Yesterday & Today (IPS 249) – to serve as the backdrop for an online course at Stanford next year – concludes with the declaration Perry made in 2007: The world must rid itself entirely of nuclear weapons. And students will get a primer on how to get involved in organizations that are working on just that. 

“They did not live through the Cold War, so they were never exposed to the dangers and therefore it doesn’t exist to them; it’s just not in their world,” Perry said of millennial and younger students. “I want to make them aware of what the dangers were and how those dangers have evolved.”

Perry and former U.S. Sen. Sam Nunn, both Democrats, joined former Republican Secretaries of State George P. Shultz and Henry A. Kissinger in launching a series of OpEds in The Wall Street Journal (the first in 2007) that went viral. Together they outlined how nations could work together toward a world without nuclear weapons.

“I think I have some responsibility since I helped build those weapons – and I think that time is running out,” Perry said in an interview. 

Perry helped shore up the U.S. nuclear arsenal as undersecretary of defense for research and engineering, procuring nuclear weapons delivery systems for the Carter administration. Later, as secretary of defense for President Bill Clinton, his priority became the dismantling of nuclear weapons around the world. 

Today, he works on the Nuclear Security Project along with Shultz, Kissinger and Nunn. Former New York Times correspondent Philip Taubman documents their bipartisan alliance in the book, “The Partnership: Five Cold Warriors and Their Quest to Ban the Bomb.” That fifth cold warrior is Sidney Drell, the renowned Stanford physicist and co-founder of CISAC. 

Taubman, a consulting professor at CISAC, will guest lecturer in Perry’s class, along with CISAC’s Siegfried Hecker, David Holloway, Martha Crenshaw and Scott Sagan. Other speakers are expected to include Shultz, a distinguished fellow at Stanford’s Hoover Institution; Andrei Kokoshin, deputy of the Russian State Duma; Ashton B. Carter, who just stepped down as deputy secretary of defense; Joseph Martz of the Los Alamos National Laboratory; and Joeseph Cirincione, president of the Ploughshares Fund.

The world is far from banning the bomb. According to the Ploughshares Fund, an estimated 17,300 nuclear weapons remain in the global stockpile, the majority of which are in Russia and the United States.

                                                                                                CyperusMedia.com

President Barack Obama declared shortly after taking office in his first foreign policy speech in Prague that because the United States was the only country to have used nuclear weapons, Washington “has a moral responsibility to act.” 

“So today, I state clearly and with conviction, America’s commitment to seek the peace

and security of a world without nuclear weapons,” Obama said back in May 2009. 

Perry – a senior fellow at CISAC who received his BS and MS from Stanford and a PhD from Pennsylvania State University, all in mathematics – laments the regression of the movement to dismantle the nuclear legacy of the Cold War. 

Obama has so far not acted on his pledge in his contentious second term, as China and Russia expand their stockpiles. North Korea and Iran are attempting to build nuclear weapons and India and Pakistan are building more fissile material. The U.S. Senate still has not ratified the Comprehensive Test Ban Treaty and the U.S. and Russia have not moved forward on a follow-up to the New START Treaty. 

Perry recognizes that the issue is slipping from the public conscience, particularly among young people. So he’s putting his name and experience behind a Stanford Online course slated to go live next year. It will correspond with the release of his memoir, “My Journey at the Nuclear Brink” and will take a more documentary approach, weaving together key moments in Perry’s career with lectures, archival footage and interviews and conversations between Perry and his colleagues and counterparts. 

"Bill Perry has had a remarkable career and this project draws on his unparalleled experience over a pivotal period in history," said John Mitchell, vice provost for online learning. "We hope his brilliant reflections will be useful to everyone with an interest in the topic, and to teachers and students everywhere." 

At the heart of his winter course, online class and memoir are what Perry calls the five great lessons he learned in the nuclear age. The first four are grim remnants of what he witnessed over the years: the destructive nature of the atomic bombs on Japan; his mathematical calculations about the number of deaths from nuclear warfare; his work for the CIA during the Cuban Missile Crisis; and one pre-dawn call in 1978 from the North American Aerospace Defense Command saying there were 200 missiles headed toward the United States from the Soviet Union. That turned out to be a false, but terrifying alarm. 

His fifth final lesson is hopeful, if not cautionary. It goes like this: 

As secretary of defense from 1994 to 1997, Perry oversaw the dismantling of 8,000 nuclear weapons in the former Soviet Union and the United States and helped the former Soviet states of Ukraine, Kazakhstan and Belarus to go entirely non-nuclear. In that mission, he often visited Pervomaysk in the Ukraine, which was once the Soviet Union’s largest ICBM site, with 700 nuclear warheads all aimed at targets in the United States. 

On his final trip to Pervomaysk in 1996, he joined the Russian and Ukrainian defense ministers to plant sunflowers where those missiles had once stood. 

“So reducing the danger of nuclear weapons is not a fantasy; it has been done,” Perry said. “I will not accept that it cannot be done. I shall do everything I can to ensure nuclear weapons will never again be used – because I believe time is not on our side.”

In July, Stanford's Center on Democracy, Development, and the Rule of Law (CDDRL) will welcome its ninth class of Draper Hills Summer Fellows hailing from 24 countries around the world. The program is an integral part of the CDDRL's effort to train practitioners who are working on the front lines of political change in places where democracy is underdeveloped or at risk.

The 2013 class was selected from over 500 applicants and represents some of the most courageous and innovative democracy leaders around the world. Their experience and track record of success earned them a spot in this highly competitive program.

From Burma to Ukraine, the 2013 fellows are leading organizations and programs - often at tremendous odds - to advance democratic practices, combat corruption and uphold human rights.

For 11 years Zing Mar Aung was a political prisoner in Burma for her involvement in the pro-democracy movement. After her release in 2009, Mar Aung dedicated her energy to building Burmese civil society by co-founding a number of civil society organizations - including the Yangon School of Political Science - to increase civic engagement. In recognition of her contributions, Mar Aung received the International Women of Courage Award in 2012 by former U.S. Secretary of State Hillary Clinton.

As the Russian government tightens its grip on civil society, the country's only independent polling center - the Levada Center - has come under attack. Working as a researcher and public commentator, Denis Volkov frequently publishes opinion pieces on the protest movements and serves as a spokesperson for Levada. Labeled as a "foreign agent" by the Russian government, the Levada Center fears closure for its independent analysis and authoritative voice.

Sultan Sooud Al Qassemi commands a significant online presence with upwards of a quarter million Twitter followers. In the height of the Arab Spring, Al Qassemi - who hails from the United Arab Emirates- became a leading commentator on Arab politics and reform for a growing online audience. In 2011, Time magazine chose Al Qassemi's Twitter feed (@SultanalQassemi) amongst its 140 Best Twitter Feeds list. His analysis is also published in Middle East-based newspapers, as well as Foreign Policy, The Guardian and The Financial Times.

The three-week fellowship program begins on July 22 and is taught by a team of interdisciplinary Stanford faculty members who include leading political scientists, lawyers and economists who are pioneering innovative research in the field of democratic development. 

One of the few programs of its kind in academia, the Draper Hills Summer Fellows Program combines the rich experiences of practitioners with academic training to maximize the impact of their work to advance democratic change.

Fellows live together on the Stanford campus where they connect with peers, exchange experiences and participate in shared activities. The program is funded by the generous support of Bill and Phyllis Draper and Ingrid von Mangoldt Hills.

The program will accept applications to the 2014 program beginning in September.

To learn more about the 2013 Draper Hills Summer Fellows and their innovative work, please click here.