On Friday, the head of the International Monetary Fund, Kristalina Georgieva, warned of the “dangerous disparity” between economies and their income and called on policymakers in the G20 to take “strong and resolute measures” to counter this.
The head of the International Monetary Fund said, “We expect by 2022 to achieve cumulative losses in emerging and developing countries in per capita income of up to 22%, compared to 13% in advanced economies.”
“We expect that only half of the countries that have been narrowing the income gaps for advanced economies will continue to do so during the period from 2020 to 2022,” she said.
She noted that youth, low-skilled, and women within countries were “disproportionately affected” by job losses.
Georgieva urged governments to quickly provide opportunities for families, commensurate with the conditions of countries, “so that there is a permanent way out of the health crisis.”
Vaccine production and recovery
Although she indicated that the global economy is on the road to recovery, in the hypothetical meeting of finance ministers and central bank governors of the G20 chaired by Italy, she confirmed that “the uncertainty is still very high,” as vaccinations still have a long way to go to reduce the severity of the waves Covid-19 virus and its effects.
The head of the International Monetary Fund called for strong and resolute measures from policymakers in the Group of Twenty, indicating that international cooperation is necessary to accelerate production and make vaccines available everywhere “as quickly as possible.”
She stressed the urgent need to intensify support for vulnerable countries, saying that “we must spread all the tools available to us.”
Initiatives to support economies
The finance ministers of the G20 countries met virtually “Friday”; To discuss plans to revive the global economy depleted by the repercussions of the spread of the Covid-19 virus, and to limit the damage to poor and marginalized countries in the race to obtain vaccines against the disease.
US Treasury Secretary Janet Yellen has expressed her willingness to discuss providing new aid through a currency issued by the International Monetary Fund, known as the Special Drawing Rights, to support countries in difficulty.
Last April, the G20 decided to suspend the payment of interest on the debts of the poorest countries and then extended it in October to 30 July 2021.
Debt interest payments for only 46 of the 73 eligible countries, worth $ 5.7 billion, have been deferred.
Earlier this February, the Group of Seven finance ministers held a virtual meeting, chaired by Britain, to discuss the economic recovery after the Coronavirus pandemic.
Japanese Finance Minister Taro Aso said that the financial officials of the Group of Seven countries discussed support for low-income countries and a new allocation of special drawing rights in the International Monetary Fund.
The head of the International Monetary Fund confirmed that the chief financial officials of the Group of Seven showed “complete agreement” on various issues, from fiscal stimulus to support for poor countries.
The British Finance Minister indicated that ministers and central bank governors exchanged views on formulating the best policies to ensure a speedy economic recovery from the Coronavirus pandemic, including support for workers and companies in a manner that ensures long-term sustainability.