IMF managing director Kristalina Georgieva said on Thursday that the world is experiencing a new moment in the Bretton Woods moment, facing the dual task of fighting the coronovirus epidemic and creating a better tomorrow.
“Today we face a new Bretton Woods moment. An epidemic that has already lived more than a million lives. An economic disaster that will make the world’s economy 4.4 percent smaller this year and produce an estimated 11 trillion USD by next year. And humanitarian frustration in the face of massive disruption and growing poverty for the first time in decades, ”she said, addressing the annual meeting of the IMF’s Board of Governors.
“Once again, we face two big tasks: to fight the crisis today and create a better tomorrow,” she said.
He said what was true in Bretton Woods, where allies gathered at the end of World War II for a conference to use economic cooperation to prevent future conflicts, which is still true today.
He said that macroeconomic policy and strong institutions are important for development, jobs and better standard of living.
The strong medium-term framework for monetary, fiscal and financial policies, as well as reforms to increase trade, competition and productivity, can help build confidence for policy action, said Georgieva.
“We know what action needs to be taken now. A sustainable economic recovery is possible if we defeat the epidemic. Health measures should be given priority. I request you to support the production and distribution of effective medicine and vaccines to ensure accessibility in all countries.
He urged countries to continue support for workers and businesses until there is a sustainable exit from the health crisis.
“We have seen USD 12 trillion global fiscal work. Major central banks have expanded the balance sheet to USD 7.5 trillion. These synchronized measures have prevented the disastrous macro financial response that we saw in previous crises, ”she said.
“But almost all countries are still hurting, especially emerging markets and developing economies. And while the global banking system enters a crisis with high capital and liquidity buffers, banks have a weak tail in many in emerging markets. We should take measures to prevent the creation of financial risks in the medium term.
The IMF expects 2021 debt levels to go up significantly – about 125 percent of GDP in advanced economies, 65 percent of GDP in emerging markets; GDVA put forward 50 percent of GDP in low-income countries.
The fund is providing debt relief to its poorest members and, together with the World Bank, support the G20’s expansion of the debt service suspension initiative.
“Also, where the debt is uncertain, it should be restructured without delay. We should move towards greater debt transparency and better transaction coordination. I am encouraged by our call to reform the architecture for sovereign debt solutions, including private sector participation, as well as the G-20 discussion on a common framework for sovereign debt solutions.
Georgiwa said that in order to reap the full benefits of sound economic policy, they should invest more in people. This means protecting the vulnerable. It also means reducing growth and resilience to promote human and physical capital, she argued.
“As the epidemic has shown that we can no longer ignore health precautions, we can no longer ignore climate change … We focus on climate change because it is pervasive, leading to growth and prosperity. There is a grave danger. It is also important to the people and important to the planet, “said IMF MD.
The IMF said, is working tirelessly to support a sustainable recovery, and a resilient future as countries adapt to the structural changes brought about by climate change, digital acceleration and the rise of the knowledge economy.
Since the epidemic began, the IMF has committed over USD 100 billion and still has enough resources in its USD 1 trillion in debt capacity, she said.
He said, “We will continue to pay special attention to the urgent needs of emerging markets and low-income countries, especially small and fragile states, helping them pay doctors and nurses and protect the most vulnerable people and parts of their economies.” Will get. ”
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