With the dual role of fighting the coronavirus pandemic today and building a better tomorrow, the world is experiencing a new moment for Bretton Woods, IMF chief executive Kristalina Georgieva said Thursday.
“Today we face a new moment in Bretton Woods. A pandemic that has already cost more than a million lives. An economic disaster that will shrink the world economy by 4.4 percent this year and an estimated production of And indescribable human despair in the face of great disruption and increasing poverty for the first time in decades, “she said at the IMF’s annual board of governors.
“We are facing two major tasks again: fighting the crisis today and building a better one tomorrow,” she said.
She said what was true at Bretton Woods when allies gathered for a conference at the end of World War II to create the institutions that would use economic cooperation to prevent future conflict remains true to this day.
Prudent macroeconomic policies and strong institutions are critical to growth, jobs and improved living standards, she said.
Strong medium-term monetary, fiscal and fiscal frameworks, as well as reforms to boost trade, competitiveness and productivity can help build confidence for policy while building much-needed resilience for the future, she added.
“We know what measures need to be taken right now. A lasting economic recovery is only possible if we overcome the pandemic. Health measures must remain a priority. I urge you to support the production and distribution of effective therapies and vaccines in order to ensure that all countries do so. ” Access, “said Georgieva.
She also called on countries to continue providing support for workers and businesses until a permanent exit from the health crisis is achieved.
“We have seen US $ 12 trillion in global fiscal measures. The major central banks have expanded their balance sheets by US $ 7.5 trillion. These synchronized measures have prevented the destructive macroeconomic feedback we have seen in previous crises,” she said.
“But almost all countries still hurt, especially the emerging and developing countries. And while the global banking system has entered the crisis with high capital and liquidity buffers, there is a weak banking tail in many emerging countries. We have to take action to. ” prevent the build-up of financial risks in the medium term, “she said.
The IMF assumes that debt will increase significantly in 2021 – to around 125 percent of GDP in advanced economies, 65 percent of GDP in emerging markets; and 50 percent of GDP in low-income countries, Georgieva said.
The fund offers its poorest members debt relief and, together with the World Bank, supports the extension of the Debt Service Suspension Initiative by the G20.
“In addition, debts that are unsustainable should be restructured immediately. We should work to improve debt transparency and credit coordination. I am encouraged by the G-20 discussions on a common framework for solving sovereign debt as well as our call for the improvement of the architecture for the resolution of national debt, including the participation of the private sector, “she said.
Georgieva said that to take full advantage of sound economic policies, they need to invest more in people. That means protecting the vulnerable. It also means empowering human and physical capital to support growth and resilience, she argued.
“Just as the pandemic demonstrated that we can no longer ignore health precautions, we can no longer afford to ignore climate change … We focus on climate change because it is macro-critical and a profound threat to growth and growth.” Represents wealth. There are also people -critical and planet-critical, “said the MD of the IMF.
The IMF works tirelessly for a lasting recovery and resilient future as countries adapt to structural changes brought about by climate change, digital acceleration and the rise of the knowledge economy.
Since the pandemic began, the IMF has tied up over $ 100 billion and still has substantial funds from its $ 1 trillion lending capacity, she said.
“We will continue to pay special attention to the urgent needs of emerging and low-income countries, especially small and fragile states, and help them pay doctors and nurses and protect the most vulnerable people and parts of their economies,” she said.