Obinna Chima
The Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, has said the human costs of the coronavirus (COVID-19) pandemic are already immeasurable. She also disclosed that nearly 80 countries are requesting for its help.
The IMF boss who said this in a podcast posted on the Fund’s website, pointed out that, the Washington-based institution would massively step up emergency finance.
According to Georgieva, “we have already seen investors pulling $83 billion from emerging markets since the beginning of the crisis.” This, she described as the largest capital outflow ever recorded.
“The human costs of the coronavirus pandemic are already immeasurable and all countries need to work together to protect people and limit the damage on the economies. This is a moment for solidarity, which was a major theme of the meeting today of the G20 finance ministers and central bank governors. “There I emphasized three points. First, the outlook for global growth.
“For 2020 it is negative, a recession at least as bad as during the global financial crisis or worse, but we expect recovery in 2021. To get to it, it is paramount to prioritise containment and strengthen health systems everywhere. The economic impact is and will be severe, but the faster the virus stops, the quicker and stronger the recovery will be.
“We at the IMF strongly support the extra ordinary fiscal actions many countries have already taken to boost health systems and protect affected workers and firms,” she added.
Georgieva, welcomed moves by central banks across the world to ease monetary policy. These, according to her, were bold efforts and they are not only in the interest of each individual country, but of the global economy as a whole.
“Even more will be needed, especially on the fiscal front. My second point is that advanced economies are generally in a better position to respond to the crisis, but many emerging markets and low income countries face significant challenges.
“They are badly affected by outward capital flows and domestic activity will be severely impacted as countries respond to the epidemic. We have already seen investors pulling $83 billion from emerging markets since the beginning of the crisis, the largest capital outflow ever recorded. We are particularly concerned about low income countries in debt distress. It is an issue in which we are working very closely with the world bank. Third, what can we, the IMF do to support our members?”
She said the Fund was concentrating bilateral and multilateral surveillance on the crisis as well as providing policy advice on actions to temper its impact.
“We will massively step up emergency finance. Nearly 80 countries are requesting our help and we are working closely with other international financial institutions to provide a strong coordinated response so we can be more impactful together.
“We are replenishing the Catastrophe Containment and Relief Trust to help the poorest countries. We welcome the pledges already made and we call on others to join. We stand ready to deploy all our $1 trillion U.S. dollars lending capacity and we are looking to other available options.
“Several low and middle income countries have asked the IMF to make an SDR allocation, special drawing rights allocation as we did during the global financial crisis. We are exploring this option with our membership.
“Also, major central banks have initiated bilateral swap lines with emerging market countries. As the global liquidity crunch takes hold, we need members to provide additional swap lines. Again, we will be exploring with our executive board and membership a possible proposal that would help facilitate a broader network of swap lines, including through an IMF swap-type facility. Let me finish with the following.
“These are extra ordinary circumstances. Many countries are already taking unprecedented measures. We at the IMF working with all our member countries will do the same. Let us stand together through this emergency to support all people across the world. Together we can get through it,” she assured.
