International Monetary Fund (IMF) Managing Director Kristalina Georgieva said on Thursday, October 15, 2020, that the global cooperation for finding and fair distribution of COVID-19 vaccines could boost the global economic recovery significantly. She shared this view, in the meeting of the IMF’s steering committee yesterday, strong cooperation among countries on vaccine would offer several potentials to generate nearly $ 9 trillion (6.9 trillion pounds) global income in the next five years.
After the committee meeting and speaking at a news conference, Georgieva insisted that the two world’s largest economies, the United States (U.S.) and China, must push towards keeping their economic stimulus strong that would help support the fast-track economic recovery.
Besides the full cooperation of major economies, the global community needed more and active participation from the world’s leading private creditors and investors to allow full recovery of the global economy, as pointed out by Georgieva. However, she added that the lack of participation in various global stimulus programs from private investors presented a major challenge for the global mission of economic recovery.
World Economy Likely $9 Trillion by 2025
Georgieva stated in a statement, “We need strong international cooperation and this is most urgent today for vaccine development and distribution,” reflecting the need for fair distribution of the vaccine when they are ready. She explained that evenly distribution of the vaccine between the developing and developed countries would support the proper functioning of the global economic wheel by ensuring development in areas including travel, investment, trade, and other activities.
The head of IMF stated, “If we may make fast progress everywhere, we could speed up the recovery. And we can add almost $9 trillion to global income by 2025, and that in turn could help narrow the income gap between richer and poorer nations.” Meanwhile, the establishment of COVAX, a global plan for fair and equitable distribution of COVID-19 vaccine among countries, posed a positive initiative that could minimize the gap between poor and wealthy nations.
In a similar view, the IMF’s International Monetary and Financial Committee said in its statement that equitable and affordable access to COVID-19 therapeutics and vaccines globally could only avoid long-lasting scars on the world economy.
Need for Private Investors’ Participation
The financial committee emphasized that the role and initiatives of the globally leading private investors represented a key aspect of the global mission for economic recovery. It stated that the participation of private creditors was primarily required to address the financial problems and offer debt relief for poor countries. Georgieva emphasized that “further private sector participation is still needed, and it remains an outstanding issue.”
Some of the inter-governmental organizations and international organizations are working towards pushing strong support for low-income countries as their economies are at the edge of collapse due to the pandemic. On Wednesday, the G20 approved a six-month extension of the Debt Service Suspension Initiative (DSSI) until mid-2021 and would likely expand for another six-month to reduce the burden of bilateral debt payments.
Observing the less participation of the private creditors and lenders in the global program, the steering committee said, “We are disappointed by the absence of progress of private creditors’ participation in the DSSI, and strongly encourage them to participate on comparable terms when requested by eligible countries.”
I’m Roshan, a journalist, blogger and music lover. I like covering global news related to finance, business, and technology. Focusing on the collection of true and reliable information, I rely on working by conducting interviews with business leaders and talking to the inside sources of companies.
You can reach out to me at: [email protected]