The IMF on Friday urged advanced economies to provide more resources to low-income countries, warning of an emerging “great divergence” in global growth, which could risk stability and trigger social unrest for years to come.
IMF managing director Kristalina Georgieva told reporters that 50 percent of developing countries were at risk of falling further behind, which raised concerns about stability and social unrest.
To avert bigger problems, rich countries and international institutions should chip in more, she said.
Photo: AFP / Argentinian Presidency / Esteban Collazo
She also urged heavily indebted countries to seek debt restructuring sooner rather than later, and to boost conditions for growth.
“Last year, the main focus was on the ‘great lockdown.’ This year, we face the risk of great divergence,” Georgieva said. “We estimate that developing countries that have been for decades converging in income levels will be in a very tough place this time around.”
Setbacks for living standards in developing countries would make it much more difficult to achieve stability and security for the rest of the world, she said.
“What is the risk? Social unrest. You can call it a lost decade. It may be a lost generation,” she said.
Georgieva said that advanced economies had on average spent about 24 percent of GDP on support measures during the COVID-19 pandemic, compared with 6 percent in emerging markets and 2 percent in low-income countries.
A former top World Bank executive, Georgieva said that COVID-19 vaccination efforts were uneven, with poor countries facing “tremendous difficulties” even as official development funds were going down.
Only one country in Africa — Morocco — had begun vaccinating, she said, citing grave concerns about increased mortality in many African countries.
“We must do everything in our power to reverse this dangerous divergence,” she said, adding that developing countries could also miss out on a major shift underway in rich countries to more digital and “green” economies.
Accelerating vaccinations could add US$9 trillion to the global economy by 2025, with 60 percent of benefits going to developing countries, she said.
Georgieva said she was still working with IMF shareholders to win support for a new allocation of the IMF’s own currency, or Special Drawing Rights (SDRs), which could provide resources to poorer countries.
Former US president Donald Trump had blocked such a move, akin to a central bank printing money.
Support from the US, the IMF’s dominant shareholder, is more likely under US President Joe Biden, whose administration is open to a new allocation, sources familiar with their views said.
The Biden administration has not addressed the issue publicly.
Georgieva said that an SDR allocation of US$250 billion in 2009 had helped stabilize the global economy during the global financial crisis, but the current situation was more grave.
The Eurovision Song Contest has seen a surge in punter interest at the bookmakers, becoming a major betting event, experts said ahead of last night’s giant glamfest in Basel. “Eurovision has quietly become one of the biggest betting events of the year,” said Tomi Huttunen, senior manager of the Online Computer Finland (OCS) betting and casino platform. Betting sites have long been used to gauge which way voters might be leaning ahead of the world’s biggest televised live music event. However, bookmakers highlight a huge increase in engagement in recent years — and this year in particular. “We’ve already passed 2023’s total activity and
BIG BUCKS: Chairman Wei is expected to receive NT$34.12 million on a proposed NT$5 cash dividend plan, while the National Development Fund would get NT$8.27 billion Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday announced that its board of directors approved US$15.25 billion in capital appropriations for long-term expansion to meet growing demand. The funds are to be used for installing advanced technology and packaging capacity, expanding mature and specialty technology, and constructing fabs with facility systems, TSMC said in a statement. The board also approved a proposal to distribute a NT$5 cash dividend per share, based on first-quarter earnings per share of NT$13.94, it said. That surpasses the NT$4.50 dividend for the fourth quarter of last year. TSMC has said that while it is eager
‘IMMENSE SWAY’: The top 50 companies, based on market cap, shape everything from technology to consumer trends, advisory firm Visual Capitalist said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) was ranked the 10th-most valuable company globally this year, market information advisory firm Visual Capitalist said. TSMC sat on a market cap of about US$915 billion as of Monday last week, making it the 10th-most valuable company in the world and No. 1 in Asia, the publisher said in its “50 Most Valuable Companies in the World” list. Visual Capitalist described TSMC as the world’s largest dedicated semiconductor foundry operator that rolls out chips for major tech names such as US consumer electronics brand Apple Inc, and artificial intelligence (AI) chip designers Nvidia Corp and Advanced
Saudi Arabian Oil Co (Aramco), the Saudi state-owned oil giant, yesterday posted first-quarter profits of US$26 billion, down 4.6 percent from the prior year as falling global oil prices undermine the kingdom’s multitrillion-dollar development plans. Aramco had revenues of US$108.1 billion over the quarter, the company reported in a filing on Riyadh’s Tadawul stock exchange. The company saw US$107.2 billion in revenues and profits of US$27.2 billion for the same period last year. Saudi Arabia has promised to invest US$600 billion in the US over the course of US President Donald Trump’s second term. Trump, who is set to touch
RSS