By Favour Nnabugwu
The International Monetary Fund (IMF) has approved over $110 billion in loans to 86 countries of the world, to enable them tackle the COVID-19 pandemic.
In its 2021 Annual Report, released, yesterday, the global body described the pandemic as “a crisis like no other” but it equally, “responded like no other.”
“More than a year into a crisis like no other, the IMF has mobilized a response like no other. As of end-April 2021, loans have been approved to 86 countries of more than $110 billion—a record number. But even though the recovery is underway, the economic fallout from the pandemic will be with us for years to come,” the organization said.
The over $110 billion approved for loans was separate from the new allocation of Special Drawing Rights (SDRs) of $650 billion , approved for members of the IMF, in August.
According to the Fund, “At $650 billion, this is the largest allocation in the IMF’s history, and it will substantially boost the reserves and liquidity of the IMF’s member countries, without adding to their debt burdens.”
It added that it was also exploring options for those with strong financial positions to voluntarily channel SDRs to vulnerable countries.
The IMF noted that the COVID-19 crisis exacerbated existing, prepandemic vulnerabilities, and countries’ prospects were diverging.
It said, “Nearly half of emerging market and developing economies and some middle-income countries risk falling further behind, undoing much of the progress made toward achieving the UN Sustainable Development Goals.
“Within countries, inequality is on the rise as well; workers with fewer skills, youth, women, and those informally employed are suffering disproportionate income losses.”
The Fund said that sustaining the recovery would require an ongoing policy push, “including to secure and expand access to vaccines and to maintain economic lifelines and targeted policy support, tailored to the stage of the pandemic, the strength of the economic recovery, and countries’ structural characteristics.”
It said that the most urgent task remained to get the world vaccinated as quickly as possible, adding, “In May, IMF staff put forward a $50 billion plan that targets vaccinating at least 40 percent of the population in all countries by the end of 2021, and 60 percent by the first half of 2022—an investment that would boost global economic activity by trillions of dollars over the next few years.
“Closing this gap is key to ending the pandemic and ensuring a sustainable long-term recovery everywhere.”
A second immediate priority, the IMF said was helping countries deal with growing public debt burdens, as high levels of debt heading into the crisis left many low-income countries more vulnerable and continues to limit their ability to provide much-needed policy support.
In her message, the Managing Director of the IMF, Ms. Kristalina Georgieva, said that a recovery was underway, but that the economic fallout from the global pandemic could be with world for years to come.
She pointed out that multilateral cooperation would be vital to ensure all countries have equitable access to vaccines and financially constrained economies have adequate access to international liquidity.
According to her, “As the recovery progresses, economic reforms and public investments in human capital and green and digital infrastructure should be scaled up to facilitate resource reallocation and limit long-term scarring.
“By building toward a more inclusive, digital, and green future, the world’s economies can achieve higher and more durable growth.”
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