Supply chains, inflation vaccine, debt problems
The sun sets behind container cranes at the Port of Los Angeles in California on October 14. REUTERS
The sun sets behind container cranes in the Port of Los Angeles in California on October 14. REUTERS
Supply chain issues and growing concerns about inflation have set aside a growing gap in Covid-19 vaccinations and growing debt problems for developing countries as top concerns for consumers. global policymakers at the annual meetings of the International Monetary Fund and the World Bank this week.
Relatively little new progress has been made on increasing vaccine supply in developing countries, although officials have pointed to a growing divergence between rich and poor countries as a growing financial and economic risk.
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The focus on the normalization struggles of richer economies and a World Bank data rigging scandal that had cast a shadow over the future of IMF Managing Director Kristalina Georgieva was a disappointment for the groups. fight against poverty.
“Given the worsening pandemic in most countries of the world, I am concerned about the lack of action at meetings on vaccine distribution, debt relief and the general response to the pandemic.” said Eric LeCompte, executive director of the Jubilee USA Network. , a religious development group.
Communiques issued by G20 finance leaders and the IMF’s steering committee pledged to increase vaccine supplies, but did not identify any new targets or specific initiatives to expand funding or distribution.
Instead, they placed greater emphasis on mounting inflationary pressures, calling on central banks to closely monitor whether they are transient or could unanchor inflation expectations.
World Health Organization chief Tedros Adhananom Ghebreyesus told an IMF forum that the world is falling behind targets to immunize 40% of the world’s population by the end of the year. year, and criticized wealthy countries for approving third booster shots when much of the world’s population has yet to receive a single dose of the vaccine.
“Donations are not enough. It is very disappointing that it takes so long for the world to truly engage” to meet the immunization goals, he said.
The IMF has said a “big vaccine divide” is keeping developing countries mired in low growth as they battle high infection rates from coronaviruses.
This, along with supply chain bottlenecks, semiconductor shortages and increasing price pressure in advanced economies, has prompted the IMF to downgrade its global growth forecast for 2021.
Some policymakers have focused more on managing the next phases of the economic recovery after unprecedented budget support, and other multilateral issues, such as the implementation of an agreement to reorganize global business taxation.
“My feeling about all the meetings we have had in Washington, and at these IMF meetings, is that we are beyond Covid,” French Finance Minister Bruno Le Maire told reporters.
“Even if the situation needs to be monitored, even if there are still decisions to be made on vaccination, especially for the poorest countries, now we are beyond Covid,” said Le Maire.
He added, however, that France was advocating for increased financial support for developing economies, including diverting at least $ 100 billion in new IMF monetary reserves to poor countries after a distribution of $ 650 billion in August.
But advocacy groups have been disappointed by the lack of progress on debt relief for the poorest countries, especially as payments on official bilateral debts will resume for 46 countries in January when the G20 debt service suspension will expire.
Jean Saldanha, director of the Eurodad debt and development monitoring group, said statements by G20 and IMF steering committees on debt were “shameful” not to go beyond encouraging wider participation to the G20 common framework on debt restructuring.
“Maintaining an almost blind faith that the Common Framework will be sufficient to tackle over-indebtedness in a growing number of countries in the South is irresponsible to say the least,” said Saldanha.