Beyond the Crisis

• Author: Kristalina Georgieva
• Position: Managing director of the IMF.
• Pages: 10-11

10 FINANCE & DEVELOPMENT | June 2020

STRAIGHT TALK

PHOTO: IM F

LOOKING BACK to the start of 2020, the world has

changed almost beyond recognition. To protect

public health, the global economy was put into

stasis. Shops closed, factories were mothballed, and

people’s freedom of movement was severely curtailed.

No country has esc aped the health, economic,

and social impacts of the COVID-19 crisis.

Tragically, more than 260,000 people have died

and millions have been inf ected. e IMF is pro-

jecting global economic activ ity to decline on a

scale not seen since the Great Depression. It is

truly a crisis like no other.

Despite the bleak outlook, I am hopeful for

the future. A crisis often bri ngs the best out in

people—I have seen it rstha nd in countries hit

by wars and natura l disasters.

is is happening already in the ght against the

pandemic as doctors and nurses around the world put

saving lives of others ahead of their own lives. And

governments are stepping up in an unprecedented

manner. To ght the pandemic they have com-

bined dramatic public health interventions with

scal measures amounting to about $8.7 trillion.

Central banks have undertaken massive liquidity

injections, and richer countries have stepped up to

support poorer nations.

Record speed

e IMF has responded at record speed. We dou-

bled our emergency rapid-disbursing capacity to

meet expected demand of about $100 billion—a nd

by end-May the IMF had approved nancing for

60 countries, a record. We also established a ne w

short-term liquidity line, and we took steps to triple

our concessional funding, targeting $17 billion in

new loan resources for our Poverty Reduct ion and

Growth Trust, which helps poorer economies.

To help vulnerable members through rapid

debt-service relief on their IMF obligations we

reformed our Catastrophe Containment and R elief

Trust. Working with the World Bank, we catalyzed

suspension of ocial bilateral debt repayments for

the poorest countries throug h the end of 2020.

While moving at speed, t he IMF has consistently

emphasized its collective com mitment and steadfast

support for its members in addressing governanc e

vulnerabilities. Corruption drains resources away

from priorities like public health, socia l protection,

distance learning, and other essentia l services.

Distorted spending priorities will u ndermine the

recovery and long-term eorts to promote sustain-

able, inclusive growth, or raise productiv ity and

living standa rds. Our message to governments is

clear: do whatever you can, but ma ke sure you keep

the receipts. We don’t want accountability and

transparency to take a back seat. In practic e, this

means support for countries in adopting a range

of public nancial mana gement, anti-corruption,

and anti-money-lau ndering measures.

During the crisis pea k, governments have rightly

been focused on saving lives a nd preserving liveli-

hoods. In places where new infec tions and deaths

are in decline, governments are considering how

best to reopen the economy in a responsible fashion.

In developing economies with large numbers of

hand-to-mouth hou seholds, prolong ed contain-

ment measures may not be a viable option and

consideration needs to be given as to how to reopen

safely given more limited health c are capacity.

In the early phase at least, the recovery will be

unusual as uncer tainty remai ns about the path

Beyond the Crisis

Now is the time to take advantage of this

opportunity to build a better world

Kristalina Georgieva