How to Rebuild the Global Economy by Kristalina Georgieva
Kristalina Ivanova Georgieva-Kinova is a Bulgarian economist serving as Chairwoman and Managing Director of the International Monetary Fund since 2019.
Transcript of Talk
At the outset, I would like to make three points. First, this is a crisis like no other. Never in the history of the IMF, we have witnessed the world economy coming to a standstill. We are now in recession. It is way worse than the global financial crisis. And it is a crisis that requires all of us to come together. WHO is there to protect the health of people; the IMF is there to protect the health of the world economy; they both are under siege. And only united we can do our duties.
I want to stress the message that you and I have sent to the world: that saving lives and protecting livelihoods ought to go hand in hand. We cannot do one without the other. And in that spirit, we at the IMF are concentrated on making sure that there is a strong response to the health crisis as well as protecting the strength of the economy.
My second point is about emerging markets and developing economies. They are hard hit, and they have very often less resources to protect themselves against this dual crisis, health and economic crisis. We know that in many countries, health systems are weak. We know that in a flight to safety, a lot of capital has left the emerging economies, the developing world. Nearly 90 billion dollars has flown out. This is way more than during the global financial crisis. And some countries are highly dependent on commodity exports. With prices collapsing, they’re hit yet again. It is paramount for us to place these countries and especially the weakest among them in the center of our attention. The same way the virus hits vulnerable people with medical preconditions hardest, the economic crisis hits vulnerable economies the hardest.
And that takes me to my third point. People at the IMF are mobilizing strongly, working together with the World Bank and other international financial institutions, bringing the world together to provide protection against this crisis. We have a one trillion dollars war chest and we are determined to use as much as necessary of that protecting the economy from the scarring of this crisis. We are mobilizing emergency financing assistance to countries, and I can tell you we have never seen ever such a growing demand for emergency financing.
Already over 90 countries have been placing requests to the IMF for it. And this emergency financing is to underpin the appeal that you and I are putting out. And it is: please, prioritize health expenditures, use money to pay doctors and nurses, make sure hospitals function, that there are makeshift clinics where necessary, and protect your economy, the most vulnerable people and firms so they can hold on to their workers. Because the highest risk we see is a wave of bankruptcies and layoffs that would make the recovery from this crisis harder.
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