WASHINGTON: After kicking their massive lending powers into overdrive to help the nations hardest hit by Covid-19 last year, the IMF and the World Bank are now focusing on getting vaccines to poor countries to keep the pandemic from derailing the global economic recovery.
Managing Director of the International Monetary Fund Kristalina Georgieva is spearheading a $50 billion joint effort with the World Health Organization to expand vaccine access, particularly for impoverished nations that have struggled to get the crucial jabs, reports AFP.Georgieva will on Friday present the proposal, which was unveiled late last month and backed by the World Bank and World Trade Organization, to finance ministers from the G7 wealthiest nations during a meeting in London.
Early in the Covid-19 crisis, the IMF and World Bank warned the pandemic would set back poor countries’ progress, causing increased inequality and a resurgence of poverty.
Now the Washington-based lenders are sounding the alarm that unequal access to vaccines will prolong a pandemic that has already killed more than 3.5 million people worldwide.
Low-income countries have received less than one percent of the doses administered to date, resulting in a “dangerous divergence” in economic fortunes, Georgieva warned.
As a result, it will take years for some countries to claw their way back to pre-pandemic levels. Economies in Latin America and the Caribbean will not regain their previous per-capita income until 2024, the IMF projected.
The IMF and the World Bank “early on understood that the crisis and the economic recession... would be very broad and very deep,” said Homi Kharas, an economist at the Brookings Institution.They pushed the G20 and private creditors to suspend debt payments for dozens of low-income countries.
“That was the first major step in ensuring that the pandemic didn’t trigger a debt crisis that could have longer term consequences,” Kharas said in an interview.