By Bassey Udo
The COVID-19 pandemic has worsened the crisis that predated the global socio-economic conditions, with almost 50 percent of emerging market, developing economies and some middle-income countries at risk of not achieving their United Nations global Sustainable Development Goals, the International Monetary Fund (IMF) has said.
The Fund said in its 2021 Annual Report that apart being left behind as a result of the crisis, whatever progress these countries made toward achieving the SDGs may be wiped out, as global inequalities continue to rise between them and advanced economies.
The report titled: “Build Forward Better” noted that workers with fewer skills, youth, women, and those informally employed were suffering disproportionate income losses as a result of the crisis associated with the panademic.
The SDGs consist of 17 global goals set as blueprint for achieving a better and more sustainable future for all for the world.
They include ending global poverty, achieving zero Hunger, good Health and well-being, quality education, gender equality, clean water and sanitation, affordable and clean energy, decent work and economic growth, and industry, innovation and Infrastructure.
Other goals include reducing inequality, sustainable cities and communities, responsible consumption and production, climate action, life below water, life on land, peace, justice, and strong institutions, as well as partnerships for the goals.
Although the IMF said the recovery in the global economy has commenced, the report said sustaining the recovery would require an ongoing policy push, including securing and expanding access to vaccines and maintaining the economic lifelines targeting policy support directed at the pandemic, the strength of the economic recovery, and countries’ structural characteristics.
To prevent the pandemic from pushing the vulnerable developing economies further behind, or undoing much of their progress towards their SDGs, the IMF said in the last one year it mobilized an unprecedented response by way financing support.
“As of end of April 2021, loans have been approved to 86 countries of more than $110 billion—a record number,” the Managing Director of IMF, Georgieva Kristalina, said.
The Report highlighted IMF’s work on the response to COVID-19, the widening divergence between advanced and developing economies; growing debt burden and building toward a green, inclusive, and digital future.
In 2021 financial year, the report said the IMF continued to support its members in three core areas, namely economic surveillance, lending and capacity development.
On economic surveillance, the report said 36 countries health checks were completed, while 54 countries took loans totalling $98 billion, including $10 billion to 31 low-income countries, since the
onset of the pandemic
Also, the report said the Fund spent about $251 million on capacity development for hands-on technical advice, policy-oriented training, and peer learning.
To ensure all countries have equitable access to vaccines, while financially constrained economies have adequate access to international liquidity, the IMF underscored the vital importance of multilateral cooperation.
“As the recovery progresses, economic reforms and public investments in human capital and green and digital infrastructure should be scaled up to facilitate resource reallocation and limit long-term scarring.
“By building toward a more inclusive, digital, and green future, the world’s economies can achieve higher and more durable growth,” Kristalina said.
The August 2021 approval of a $650 billion new allocation of Special Drawing Rights (SDRs) was the largest allocation in the IMF’s history, the report said.
The SDR, the report said, would substantially boost the reserves and liquidity of the IMF’s member countries, without adding to their debt burdens.
The Fund said it was also exploring options for those with
strong financial positions to voluntarily channel SDRs to the
Together with the swift and extraordinary measures
taken by various governments and central banks, the report said the actions by the Fund helped in putting a floor under the global economy in the early stages of the crisis and provided the basis for the emerging recovery.
However, the report said the recovery was being frustrated larvely by divergence in economic
fortunes across countries, driven
by dramatic differences in access to vaccines and the scope
to provide policy support.
While advanced economies were rapidly bouncing back from the crisis, the situation in many emerging market and developing economies, it noted, was deepening.
The report said the most urgent task before the world remained getting the world vaccinated as quickly as possible.
In May, it said the IMF staff put
forward a $50 billion plan targeting vaccination at least 40 percent of the population in all countries by the end of 2021, and 60 percent by the first half of 2022.
The investment, it said, would boost global economic activity by
trillions of dollars over the next few years.
Closing the recovery gap between advanced and developing economies, the reported noted, was key to ending the pandemic and ensuring a sustainable long-term recovery everywhere.
The second immediate priority, the IMF pointed out, was helping countries deal with growing public debt burdens.
High levels of debt heading into the crisis, the IMF noted, not only left many low-income countries more vulnerable to the impact of the crisis, but it continued to limit their ability to provide much-needed policy support.
The IMF said it helped in
expanding concessional financing for low-income countries and provided debt relief to 29 of its poorest members, giving them some breathing space.
Regardless, the Fund said more still needed to be done, including through the G20 Common Framework for Debt Treatments, which it is currently actively supporting.
To take the opportunity to build forward better, the IMF suggested putting in place policies that not
only strengthen the near-term recovery, but also transformative
policies that would provide a foundation for a greener, more digital and inclusive global economy of tomorrow.
“More than ever, we see the profound implications climate
change has for macroeconomic performance and financial
stability, and we are putting these critical aspects of climate action at the core of our work,” the Fund said.
The Report highlighted IMF’s work and coverage in these areas, through policy advice, lending,
and capacity development, emphasizing the work of its
Executive Board, to ensure global financial stability and growth.