The severe economic crisis ignited by the coronavirus pandemic requires rapid deployment of every available financial lifeline to help countries survive, International Monetary Fund chief Kristalina Georgieva said Thursday.
“Everything has to be on the table. We simply don’t know yet how the crisis would evolve,” she said.
With over two million cases worldwide, deaths approaching 140,000, and nearly 4.4 billion people subject to some degree of lockdown, COVID-19 has brought much of the global economy to a standstill.
The International Monetary Fund projects the world economy will shrink by three percent or $9 trillion this year, but many private forecasters are even more pessimistic.
The IMF and World Bank have rushed out billions in financing, ramping up and streamlining aid programs in recent weeks, especially for the poorest countries, and winning agreement to provide a debt standstill on loans to official creditors.
But Georgieva, who acknowledged continuing debate among some of the fund’s members over what additional steps would work best, said the critical thing is to act now.
– Building a bridge –
“What we do know is that we have strong financial capacity to act now, and that speed of action is of (the) essence in the crisis that has moved so rapidly and is so deep,” she said at the conclusion of the virtual meeting of the IMF’s governing committee.IMF Managing Director Kristalina Georgieva said Africa is a high priority for financing during the coronavirus economic crisis
The fund is focused on “building a bridge” over the crisis.
The IMF has $1 trillion in lending capacity, and has doubled its fast-deploying crisis financing vehicles, many of which go to the least developed nations, and on Wednesday it approved a new short-term credit line for middle-income countries that had strong policy track records.
Over 100 countries have asked for aid, and 50 already have received it, Georgieva said.
The fund is seeking additional funding from member governments for its concessional lending facilities, including $17 billion for one program, and already received over 70 percent of that amount, with firm commitments Thursday from Japan, Britain, France, Australia and Canada, she said.
US Treasury Secretary Steven Mnuchin said Thursday the US government is “currently exploring” making a contribution to two of the emergency funds, and noted that the “robust response by the IMF and World Bank Group would not be possible without the committed support of its shareholders.”
He recognized that poor nations are especially vulnerable and called for more action from governments around the world to help ease the blow.The debt burden of poor countries
There is an “urgent need for all members to deploy extraordinary fiscal and monetary actions to contain the fallout of the outbreak and limit long-term damage to economies, laying the foundation for a strong recovery,” Mnuchin said in his statement to virtual meetings of the two lending organizations.
In addition, “we must all stand ready to accelerate and expand our policy actions if needed as circumstances evolve.”
Many of the countries eligible for the debt relief and emergency financing are in Africa, and Georgieva said the region is “a high priority at both the IMF and the World Bank, in terms of deploying our capacity.”
“We are mindful of the risks for the parts of Africa that had problems, even before COVID-19, and will mobilize very strongly with Africa, save lives, save jobs, save hope, protect the future.”