The Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva has advanced that strong international cooperation on coronavirus vaccines could speed up the world economic recovery and add $9 trillion to global income by 2025.
Speaking at a news conference after a meeting of the IMF’s steering committee, Georgieva also called on the United States and China to keep up strong their economic stimulus measures that could help boost a global recovery.
She emphasised the need for vaccines to be distributed evenly across the world in developing countries and wealthy nations, to boost confidence in travel, investment, trade and other activities.
“If we may make fast progress everywhere, we could speed up the recovery. And we can add almost $9 trillion to global income by 2025, and that, in turn, could help narrow the income gap between richer and poorer nations.
“We need strong international cooperation and this is most urgent today for vaccine development and distribution.”
Additionally, the IMF’s International Monetary and Financial Committee made known in its statement that equitable and affordable access to COVID-19 therapeutics and vaccines globally will be key to avoiding long-lasting scars on the world economy.
Georgieva added she had “no doubt” that the US Congress and the White House would ultimately agree on another spending package but was uncertain about the timing. Some $3 trillion in US stimulus spending earlier this year “has been an important positive impulse and we would like to see how it would be continued again,” she said.
The committee said private creditors’ and official bilateral creditors’ participation in debt relief for poor countries is essential, with Georgieva adding that “further private sector participation is still needed, and it remains an outstanding issue.”
The G20 on 14th October approved a six-month extension to mid-2021 of the Debt Service Suspension Initiative (DSSI) that freezes official bilateral debt payments and said they would consider a further six-month extension in April. But private creditors and lenders outside the Paris Club – a group of creditor countries that includes most key economies but excludes China – are not fully participating.
“We are disappointed by the absence of progress of private creditors’ participation in the DSSI and strongly encourage them to participate on comparable terms when requested by eligible countries,” the steering committee said while encouraging “the full participation of official bilateral creditors.”
Earlier, World Bank President, David Malpass had called for investors to grant some form of relief that could also include debt cancellation in poor countries as the coronavirus pandemic could trigger a debt crisis in these nations.
“It is evident that some countries are unable to repay the debt they have taken on. We must, therefore, also reduce the debt level. This can be called debt relief or cancellation,” Malpass said.
He also called for private banks and investment funds to get involved.
“These investors are not doing enough and I am disappointed with them. Also, some of the major Chinese lenders did not get enough involved. The effect of the aid measures is, therefore, less than it could be.”
