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IMF Chief Urges G20 To Prevent "Devastating" Blow To Poorest

IMF Chief Urges G20 To Prevent "Devastating" Blow To Poorest

Warning of a "deepening divergence" between rich and poor, IMF chief Kristalina Georgieva called on the G20 to take urgent steps to keep developing nations from falling further behind in vaccine access and funding to repair their fortunes.
The world's richest nations must do more to help the poorest countries withstand the "devastating double-blow" of the pandemic and the resulting economic damage, IMF chief Kristalina Georgieva said Wednesday.

Warning of a "deepening divergence" between rich and poor, she called on the G20 to take urgent steps to keep developing nations from falling further behind in vaccine access and funding to repair their fortunes.

In a blog post ahead of this week's meeting of G20 finance ministers and central bankers, the head of the International Monetary Fund said "speed is of the essence" but the price tag is relatively small.

"Poorer nations are facing a devastating double-blow" losing the race against the virus and missing out on key investments that will help lay the groundwork for economic growth, Georgieva said.

"It is a critical moment that calls for urgent action by the G20 and policymakers across the globe," she said.

While the United States is poised to grow by its fastest pace since 1984 and countries like China and the euro area are gaining momentum, the developing world is being left behind by a "worsening two-track recovery, driven by dramatic differences in vaccine availability, infection rates, and the ability to provide policy support."

She again pressed the G20 to do more to help get vaccines to the poor countries, including sharing doses, accelerating debt forgiveness, and endorsing the goal of vaccinating at least 40 percent of the population in every country by the end of 2021, and at least 60 percent by the first half of 2022.

With less than one adult in 100 fully vaccinated in Sub-Saharan Africa, compared to 30 percent in advanced economies, those countries are at higher risk for emerging Covid-19 variants.

The IMF estimated that low-income countries will need to deploy about $200 billion over five years just to fight the pandemic, and another $250 billion for economic reforms to allow them to catch up to the richer nations.

But Georgieva said they cannot do that on their own and wealthy nations must "redouble their efforts, especially on concessional financing and dealing with debt."

The Washington-based crisis lender has proposed a $50 billion joint effort with the World Health Organization, World Bank and World Trade Organization to expand vaccine access, "a global game-changer" she said would save hundreds of thousands of lives and accelerate the recovery.

In areas where infections continue to rise, she said it is "critical" that businesses and families continue to receive financial support, but once the virus is under control funds can shift to things like worker training programs to "help heal the scars of the crisis," which hit women especially hard.

Georgieva also said the IMF is keeping an eye on rising prices, particularly in the United States, but as the recovery gains traction "it will be essential to avoid overreacting to transitory increases in inflation."
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