IMF: Poorest Countries Face "Devastating Double-Blow"
The IMF called on the richest countries to support the poorest countries escape the economic repercussions of COVID-19 through a joint initiative with the WHO, World Bank and the WTO.
IMF Head Kristalina Georgieva asked the world's richest countries on Wednesday to put more effort into helping the world's poorest nations overcome the economic burdens of COVID-19.
Georgieva warned of the "deepening divergence" between the rich and poor, calling on the G20 to take urgent steps to "developing nations from falling further behind in vaccine access and funding to repair their fortunes."
This pandemic has made the march toward the #SDGs much harder for many countries.— Kristalina Georgieva (@KGeorgieva) July 6, 2021In a memo published just before meeting the group's finance ministers and central bank chiefs, Georgieva announced that the "poorest nations are facing a devastating double-blow" as they are losing the battle against the virus and wasting important investment opportunities that can establish a basis for economic growth.
A fair shot at a sustainable, inclusive, resilient future requires both action at home and the world stepping up — to end the pandemic everywhere and help finance transformative reforms. #UNHLPF pic.twitter.com/lSga2joFme
On the one hand, it is expected that the United States achieves its fastest economic growth since 1984 and countries like China and European countries gain momentum; on the other hand, developing countries find themselves left behind by a worsening two-track recovery, driven by dramatic differences in vaccine availability, infection rates, and the ability to provide policy support.
The IMF Head suggested that G20 countries put more effort into giving the poorest nations vaccines, which means sharing doses, speeding debt forgiveness, and supporting the goal of vaccinating at least 40% of the population of every country by the end of 2021, and at least 60% by the first half of 2022.
Statistics have shown that 1 out of every 100 adults has been fully vaccinated in Sub-Saharan Africa, compared to 30% in advanced countries. Sub-Saharan countries stand to face increasing danger with the emergence of new variants of the virus.
IMF estimates show that low-income countries will need an allocation of nearly $200 billion over five years to combat the virus and another $250 billion to make the economic reforms that can allow them to catch up to the richest countries.
The IMF suggested a $50 billion joint initiative with the WHO, World Bank, and WTO to allow for broader access to vaccines, which can be "a global game-changer" that would save hundreds of thousands of lives and accelerate recovery.
The IMF is watching the rise of prices, namely in the US. With economic recovery gaining momentum, "it will be essential to avoid overreacting to transitory increases in inflation."
Earlier in March 2021, the IMF said that "the coronavirus outbreak is a serious threat to the world economy."