IMF: Developing Countries At Risk Of Languishing For Years

Kristalina Georgieva, managing director of the International
Monetary Fund (IMF), says there is a major risk that most
developing countries will languish for years to come.

In a blog post on Wednesday, Georgieva encouraged advanced
economies to take strong policy actions to prevent great divergence
between them and low-income countries.

The IMF boss said the institution sees an accelerated difference
within countries, with the youth, the low-skilled, women and
informal workers losing their jobs, and millions of children facing
disruptions to their education.

“As our note to the G20 meeting points out, there is a major
risk that as advanced economies and a few emerging markets recover
faster, most developing countries will languish for years to come.
This would not only worsen the human tragedy of the pandemic, but
also the economic suffering of the most vulnerable,” she said.

According to Georgieva, there is a need for much stronger
international collaboration to hasten the COVID-19 vaccine rollout
in poorer countries.

“We know that the pandemic is not over anywhere until it is over
everywhere. While new infections worldwide have recently declined,
we are concerned that multiple rounds of vaccinations may be needed
to preserve immunity against new variants,” she said.

She further noted that the economic crisis can be tackled
through continued fiscal support by G20 governments to help
maintain livelihoods, as well as monetary policy support by major
central banks which has enabled several developing economies to
regain access to global capital markets.

However, she warned that continued monetary policy support may
invite consequences such as excessive risk-taking and market
exuberance.

She also urged G20 countries to step up support to vulnerable
countries through additional concessional financing, while
leveraging private finance through stronger risk-sharing
instruments.

Kristalina Georgieva, managing director of the International
Monetary Fund (IMF), says there is a major risk that most
developing countries will languish for years to come.

In a blog post on Wednesday, Georgieva encouraged advanced
economies to take strong policy actions to prevent great divergence
between them and low-income countries.

The IMF boss said the institution sees an accelerated difference
within countries, with the youth, the low-skilled, women and
informal workers losing their jobs, and millions of children facing
disruptions to their education.

“As our note to the G20 meeting points out, there is a major
risk that as advanced economies and a few emerging markets recover
faster, most developing countries will languish for years to come.
This would not only worsen the human tragedy of the pandemic, but
also the economic suffering of the most vulnerable,” she said.

According to Georgieva, there is a need for much stronger
international collaboration to hasten the COVID-19 vaccine rollout
in poorer countries.

“We know that the pandemic is not over anywhere until it is over
everywhere. While new infections worldwide have recently declined,
we are concerned that multiple rounds of vaccinations may be needed
to preserve immunity against new variants,” she said.

She further noted that the economic crisis can be tackled
through continued fiscal support by G20 governments to help
maintain livelihoods, as well as monetary policy support by major
central banks which has enabled several developing economies to
regain access to global capital markets.

However, she warned that continued monetary policy support may
invite consequences such as excessive risk-taking and market
exuberance.

She also urged G20 countries to step up support to vulnerable
countries through additional concessional financing, while
leveraging private finance through stronger risk-sharing
instruments.