IMF chief urges G-20 to prevent 'devastating' blow to poorest

Published Thu, Jul 8, 2021 · 05:50 AM

Washington, DC

THE world's richest nations must do more to help the poorest countries withstand the "devastating double-blow" of the pandemic and the resulting economic damage, International Monetary Fund (IMF) chief Kristalina Georgieva said on Wednesday.

Warning of a "deepening divergence" between rich and poor, she called on the G-20 to take urgent steps to keep developing nations from falling further behind in vaccine access and funding to repair their fortunes. In a blog post ahead of this week's meeting of G-20 finance ministers and central bankers, the head of the IMF said "speed is of the essence" but the price tag is relatively small.

"Poorer nations are facing a devastating double-blow" losing the race against the virus and missing out on key investments that will help lay the groundwork for growth, Ms Georgieva said. "It is a critical moment that calls for urgent action by the G-20 and policymakers across the globe."

While the United States is poised to grow by its fastest pace since 1984 and countries like China and the euro area are gaining momentum, the developing world is being left behind by a "worsening two-track recovery, driven by dramatic differences in vaccine availability, infection rates, and the ability to provide policy support".

She again pressed the G-20 to do more to help get vaccines to the poor countries, including sharing doses, accelerating debt forgiveness, and endorsing the goal of vaccinating at least 40 per cent of the population in every country by the end of 2021, and at least 60 per cent by the first half of 2022. With less than one adult in 100 fully vaccinated in Sub-Saharan Africa, compared to 30 per cent in advanced economies, those countries are at higher risk for emerging Covid-19 variants.

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The IMF estimated that low-income countries will need to deploy about US$200 billion over five years just to fight the pandemic, and another US$250 billion for economic reforms to allow them to catch up to the richer nations. But Ms Georgieva said they cannot do that on their own and wealthy nations must "redouble their efforts, especially on concessional financing and dealing with debt".

The crisis lender has proposed a US$50 billion joint effort with the World Health Organization, World Bank and World Trade Organization to expand vaccine access, "a global game-changer" she said would save hundreds of thousands of lives and accelerate the recovery. AFP

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