global, multilateral and EU-related measures to tackle COVID-19 and its consequences
IMF & World bank’S RESPONSE TO THE COVID-19 PANDEMIC
LAST UPDATED 3 june
world bank: When and how to safely reopen the economy: How better data can help
‘The World Bank, in collaboration with the government of Colombia, is developing a prototype dashboard that helps policy makers on a near real-time basis monitor the interplay of virus spread’
From the health perspective infections should no longer be spread worldwide, local public health units should have enough capacity to test people, and the health care system should care and save medical workers at the frontline.
‘From an economic reactivation perspective, governments should consider the ability of different sectors to maintain physical distancing and operate safely, while maximizing the impact of their reactivation on economic output and employment.’
IMF: As part of the Fund’s response to help address the impact of the COVID-19 pandemic, the IMF Board recently approved immediate debt service relief to 29 member countries under the revamped Catastrophe Containment and Relief Trust (CCRT)
Emergency financing – The IMF is responding to an unprecedented number of calls for emergency financing – from more than 100 countries so far. The Fund has doubled the access to its emergency facilities—the Rapid Credit Facility and Rapid Financing Instrument —allowing it to meet the expected demand of about USD 100 billion in financing. These facilities allow the Fund to rapidly provide emergency assistance without the need to have a full-fledged program in place and without the more traditional IMF conditionality. Financing is being approved by the IMF’s Executive Board at record speed – for over 60 countries by end-May.
World Bank Group’s Operational Responses to Covid - 19 - Projects List
The World Bank had established the first set of supporting strategies for developing countries. The amount of the first set of the package is $1.9 billion. The help should be provided for 25 countries.
Over 15 months, the World Bank Group will be providing up to $160 billion in financing tailored to the health, economic and social shocks countries are facing, including $50 billion of IDA resources on grant and highly concessional terms.
The World Bank launches Inaugural Sustainable Development Bond Impact Report
World Bank bonds support the financing of sustainable development projects and programs in member countries. The WB is aiming to build strategic cooperation with investors for promoting the development and growth of the private sector.
“World Bank Sustainable Development Bonds help investors implement environmental, social, and governance investment strategies, while achieving development impact goals,” said Anshula Kant, Managing Director, and World Bank Group Chief Financial Officer.
The World Bank claims from the governments to use the three-pillar strategy to relieve the transition of workers’ back to work routine and support market labor recovery:
To prepare an exit strategy from current emergency measures
To get the timing right for tailored support to workers
To stimulate overall labor demand and livelihood
The COVID - 19 Pandemic: Shocks to Education and Policy Responses
The World Bank explains how to decrease the educational shock triggered by the Great Lockdown due to the COVID - 19. The policy responses to achieve this can be summarized in three overlapping phases:
Improving and Accelerating
The COVID - 19 made schools and universities to shut down. Many students had problems accessing the virtual learning environment, thus there is a high possibility of decreasing the educational functioning. Without relevant attention and financial reforms in the educational sphere, there is possibility of increasing dropouts, losing learning skills, higher inequality among students that led to economic shock that damaged the previous structure of education.
Broad, fast action to save lives and help countries rebuilt
The World Bank is stating the main possible ways to fast action to fight the COVID - 19:
Saving lives by the implementation of emergency health operations.
Protection of the poorest and the most vulnerable with new programs of social protection.
Saving jobs and businesses through the support of the private sector.
Building a more resilient sector with supporting policy reforms to make rebuilding actions faster and more productive.
Fiscal Policies for the Recovery from COVID - 19: IMF Blog
Benefits to the economy from governments were decided to implement by the IMF.
The International Monetary Fund encourages countries and its governments to take necessary and important steps to benefit the fiscal policies and make the economy to grow faster after the pandemia.
Attributes to safe social net:
First, provide broad coverage and adequate benefits to vulnerable groups in a progressive way—that is, more generous benefits to the poorest.
Second, preserve work incentives and help beneficiaries find jobs, obtain health care, and attend education and training.
Third, strive to avoid a fragmented, complex web of social protection programs that ends up being more costly to run and not benefiting people in a fair and consistent way.
Plan discretionary policies: claims government to reduce taxes for businesses so they will be able to hire employees back on favourable grounds for both.
Invest for the future: this step is made for prevention of next possible viruses and its spread, so the high quality of the investment into the public is required.
Managing higher government debt loads: made for the balancing between fiscal deficits and government debt ratios.
How the IMF is Promoting Transparent and Accountable Use of COVID - 19 Financial Assistance
To ensure that the financial aid received by countries was directed on the fighting with the covid - 19 consequences, the IMF decided to provide transparency and accountability by its emerging financial actions. They believe also that with this step they can fight corruption.
Managing Director’s Opening Remarks at the Petersberg Climate Dialogue XI
Opening Remarks by Kristalina Georgieva
AS PREPARED FOR DELIVERY
The Petersberg Climate Dialogue comes as we are fighting the COVID-19 pandemic. In the minds of some, the health crisis and the “great lockdown” needed to address it mean that we can push the pause button in the fight against the other existential crisis we face—our changing climate. Nothing is further from the truth. We are about to deploy a massive fiscal stimulus which can help us address both crises at the same time.
Governments around the world have deployed extraordinary policy measures to save lives and protect livelihoods in the worst economic downturn since the Great Depression. And given the gravity of this crisis, significant further efforts will be needed—especially during the recovery phase.
If this recovery is to be sustainable—if our world is to become more resilient—we must do everything in our power to promote a “green recovery.”
In other words, taking measures now to fight the climate crisis is not just a “nice-to-have.” It is a “must-have” if we are to leave a better world for our children.
So what can governments do?
Last week IMF Fiscal Affairs Department staff published broad guidance[i] on “greening the recovery.” Let me highlight three priorities:
First—use public support wisely. When governments provide financial lifelines to carbon-intensive companies, they should mandate commitments to reduce carbon emissions. We saw similar agreements during the global financial crisis, when some automakers committed to higher fuel efficiency standards. With oil prices at record-low levels, now is the time to phase out harmful subsidies. And governments need to prioritize investment in green technologies, clean transport, sustainable agriculture, and climate resilience. In the energy sector alone, the IMF estimates that a low-carbon transition would require $2.3 trillion in investment every year for a decade.[ii] These types of investments would boost growth and jobs during the recovery phase, and help steer the world in the right climate direction.
Second—promote green finance. We need to continue the emphasis on using green bonds and other forms of sustainable finance. In light of the extended use of government guarantees, part of them can be deployed to mobilize private finance for green investment. And financial firms have to be mandated to better disclose climate risks in their lending and investment portfolios. More broadly, we need to find better ways of pricing in climate risk. New IMF analysis[iii] shows that, over the past 50 years, climate-related disasters have had only a modest effect on equity markets. Clearly, many investors have yet to face up to the new climate reality.
Third—put the right price on carbon.
WTO and IMF heads call for lifting trade restrictions on medical supplies and food
As our members grapple with their response to the global health and economic crisis, we call for more attention to the role of open trade policies in defeating the virus, restoring jobs, and reinvigorating economic growth. In particular, we are concerned by supply disruptions from the growing use of export restrictions and other actions that limit trade of key medical supplies and food.
IMF COVID-19 Response—A New Short-Term Liquidity Line to Enhance The Adequacy Of The Global Financial Safety Net
The COVID-19 pandemic has created severe disruption in the global financial system, with many emerging market and developing countries (EMDCs) facing liquidity shortages. In the context of intensified demand for liquidity and heightened global uncertainty, staff has revisited the 2017 proposal for a new facility to provide liquidity support to the Fund’s membership. This paper proposes the establishment of a new Short-term Liquidity Line (SLL) as a special facility in the General Resources Account (GRA), based on the key features of the 2017 blueprint.
The Managing Director of the IMF and the Heads of the RFAs Emphasize their Readiness to Cooperate to Mitigate the Impact of COVID-19 on the Global Economy
Stressing the urgent need for combined, multilateral efforts to face the extraordinary human and economic crisis caused by the pandemic, the heads issue the following statement:
“The IMF and the world’s Regional Financing Arrangements stand united in addressing the global challenges related to the Coronavirus (COVID-19) pandemic and wish to extend our deepest sympathies to all those affected. We are following the situation very closely in order to contribute to the decisive actions needed globally to face these exceptional and uncertain circumstances. We are determined to provide the necessary support to mitigate the economic and financial impacts of the pandemic, especially on the most vulnerable people and countries.
IMF head [Georgieva] Dire economic forecasts may be too optimistiC
BBC interview with kristalina georgieva
(taken entirely from the BBC interview linked below)
In April, because of Covid-19, [Ms Georgieva] says: "We are projecting 170 countries to see income per capita shrinking during 2020" - 87% of the atlas of the world.
And yet this detail - which is part of a broader forecast that sees world GDP dive 3% in 2020, creating "a global recession we have not seen in our lifetimes" - may not be the end of it.
"I want to stress this may be actually a more optimistic picture than reality produces," Ms Georgieva told the BBC.
"Epidemiologists are now helping us making macroeconomic projections. Never in the history of the IMF have we had that. And what they're telling us is that the novel coronavirus is a big unknown, and we don't know whether it may return in 2021."
"It is the time that governments should spend as much as they can afford and more, but keep the receipts. We don't want to lose accountability and transparency during this crisis," Ms Georgieva says.
"We will see some countries being able to do more, and actually, the UK has already done quite a lot. And we will see some countries that will need more help because they have much more limited capacity to act. And this is where the IMF and other international financial institutions come into play."
"Saving lives and saving livelihoods go hand in hand with stopping the pandemic. We simply cannot restart the economy to the fullest, and without restarting the economy, finance ministers are not going to have the revenues they need, including for their health services," Ms Georgieva says.
"So we have to, of course, listen to the health professionals and design protocols that allow us over time to reopen segments of the economy and do that cautiously. We have to then carefully calibrate how we're doing this reopening."
She suggests that automated factories and rural areas might be easier to reopen, but there is still some "figuring out" to do around reopening busy cities and towns.
"It's a very simple message - you cannot beat the virus unless you beat it everywhere. When one country is suffering from an epidemic, then it makes sense to be protective and keep what the country needs domestically.
"But when we are all hit by an epidemic... we need to act together. And we would very much encourage countries to actually integrate their capabilities rather than trying to keep it each one for itself."
But her central message is to look beyond the understandable concern for what is happening in the world's advanced nations, to the problems facing poorer ones. The G20's decision to suspend debt repayments from the world's most deprived countries was a start, but she says we must remain mindful.
"Poor countries in the world are hit multiple times. They're hit by the pandemic. They're hit by the spillover from economic contraction elsewhere. They're hit by the flight to safety," Ms Georgieva says.
"$100bn has left emerging markets in developing countries just in two months, much more than during the global financial crisis. They're hit because remittances are drying up. And those that are commodity exporters are hit by prices of their exports dropping."
She says "lifelines" are needed now for such countries, such as the debt standstill which would free billions for health services. "We need each other. It is a moment testing our humanity and being together acting with solidarity. We will get to the other side of this."
World Bank Group and IMF mobilize partners in the fight against COVID-19 in AfricA
The World Bank Group and International Monetary Fund today convened African leaders, bilateral partners, and multilateral institutions to spur faster action on COVID-19 response in African countries. H.E. Cyril Ramaphosa of South Africa, United Nations Secretary General Antonio Guterres, Director General of the WHO Dr. Tedros Adhanom Ghebreyesus, Africa Union Commission Chairperson Moussa Faki Mahamat, and officials of individual countries outlined their policy plans for effective use of resources, multilateral organizations including the United Nations pledged their continued support, and bilateral partners reemphasized their commitment to a debt standstill beginning May 1, 2020. This comes in response to calls from the World Bank Group President Malpass, International Monetary Fund Managing Director Georgieva, and other partners for creditors to suspend debt repayments in order to provide much-needed support to the poorest countries.
Communiqué of the Forty First Meeting of the IMFC
Chaired by Mr. Lesetja Kganyago, Governor of the South African Reserve Bank
The Great Lockdown: Worst Economic Downturn Since the Great Depression
World Economic Outlook, April 2020: Chapter 1: The Great Lockdown
The world has changed dramatically in the three months since our last update of the World Economic Outlook in January. A rare disaster, a coronavirus pandemic, has resulted in a tragically large number of human lives being lost. As countries implement necessary quarantines and social distancing practices to contain the pandemic, the world has been put in a Great Lockdown. The magnitude and speed of collapse in activity that has followed is unlike anything experienced in our lifetimes.
World Economic Outlook, April 2020: Chapter 1
The Great Lockdown
The COVID-19 pandemic is inflicting high and rising human costs worldwide, and the necessary protection measures are severely impacting economic activity. As a result of the pandemic, the global economy is projected to contract sharply by –3 percent in 2020, much worse than during the 2008–09 financial crisis. In a baseline scenario--which assumes that the pandemic fades in the second half of 2020 and containment efforts can be gradually unwound—the global economy is projected to grow by 5.8 percent in 2021 as economic activity normalizes, helped by policy support. The risks for even more severe outcomes, however, are substantial. Effective policies are essential to forestall the possibility of worse outcomes, and the necessary measures to reduce contagion and protect lives are an important investment in long-term human and economic health. Because the economic fallout is acute in specific sectors, policymakers will need to implement substantial targeted fiscal, monetary, and financial market measures to support affected households and businesses domestically. And internationally, strong multilateral cooperation is essential to overcome the effects of the pandemic, including to help financially constrained countries facing twin health and funding shocks, and for channeling aid to countries with weak health care systems.
World Bank Group Launches First Operations for COVID-19 (Coronavirus) Emergency Health Support, Strengthening Developing Country Response
Some say there is a trade-off: save lives or save jobs – this is a false dilemma
join statement IMF & WHO
The IMF for its part aims to help by doubling its emergency response capacity from $50 billion up to $100 billion – making it possible for countries to get twice as much money from the Fund as had been made available during emergencies. Its total lending capacity of $1 trillion is now secured thanks to the decisive actions of its membership.
The Fund is also increasing its capacity to ease debt service obligations of its poorest members through the Catastrophe Containment Relief Trust for which generous donors are providing grant resources. And together with the World Bank, it is advocating for a standstill of debt service from the poorest countries to official bilateral creditors for as long as the world economy is paralysed by the pandemic.
The course of the global health crisis and the fate of the global economy are inseparably intertwined. Fighting the pandemic is a necessity for the economy to rebound. That is why the WHO and IMF are cooperating closely with one another, and with other international organisations, to help address countries’ priority needs.
Europe’s COVID-19 Crisis and the Fund’s Response
The Fund is moving as fast as possible to support the membership at this time of extraordinary systemic challenges. We are dramatically streamlining our internal rules and procedures so as to be able to respond with the speed, agility, and scale called for by this unprecedented peacetime challenge. Our shareholders—189 countries worldwide—expect nothing less, and we stand ready to play our role in supporting Europe’s efforts to fight the pandemic.
The Great Lockdown: Worst Economic Downturn Since the Great Depression
International Monetary Fund Managing Director Kristalina Georgieva statement
International Monetary Fund Managing Director Kristalina Georgieva made the following statement today following a conference call of G20 Finance Ministers and Central Bank Governors:
“The human costs of the Coronavirus pandemic are already immeasurable and all countries need to work together to protect people and limit the economic damage. This is a moment for solidarity—which was a major theme of the meeting today of the G20 Finance Ministers and Central Bank Governors.
“I emphasized three points in particular:
1 “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 there, it is paramount to prioritize 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 strongly support the extraordinary fiscal actions many countries have already taken to boost health systems and protect affected workers and firms. We welcome the moves of major central banks to ease monetary policy. These bold efforts are not only in the interest of each country, but of the global economy as a whole. Even more will be needed, especially on the fiscal front.
2 “Second, 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. Investors have already removed US$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—an issue on which we are working closely with the World Bank.
3 “Third, what can we, the IMF, do to support our members?
We are concentrating bilateral and multilateral surveillance on this crisis and policy 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 the other international financial institutions to provide a strong coordinated response.
We are replenishing the Catastrophe Containment and Relief Trust to help the poorest countries. We welcome the pledges already made and call on others to join.
We stand ready to deploy all our US$1 trillion lending capacity.
And we are looking at other available options. Several low- and middle-income countries have asked the IMF to make an SDR allocation, as we did during the Global Financial Crisis, and we are exploring this option with our membership.
Major central banks have initiated bilateral swap lines with emerging market countries. As a 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.
“These are extraordinary 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.”
Global Arena Research Institute launches the "Beyond" Initiative
The global COVID-19 emergency emphasizes local and nation-based responses and national
collectivism in general. In the short term, it is understandable. The multilateral institutions (including the EU) were not devised with such a scenario in mind.
However, in the long run, going national and going local is not the way forward. Nation-states cannot win the fight against COVID-19 (or similar threats in the future) by themselves. Moreover, there is a mounting risk that such a nationalist bias will endure and last beyond the COVID-19 crisis.
GARI believes, instead, that it is imperative to look "beyond" the local and national horizons
As of today, GARI launches the initiative "Beyond" to stress this point. We are starting by tracking and highlighting global, multilateral and EU-related measures to tackle COVID-19 and its consequences. We believe that the COVID-19 coverage in the (social) media favours reporting on national measures and national policies and politics, thus further prompts nationalism as such.
Our subsequent goal is to follow on implementation and impact of these measures in a coherent and continuous manner.
Any suggestions, inputs or comments welcome (via FB messenger, LinkedIn or email email@example.com)