The Managing Director of the International Monetary Fund (IMF) on Friday called on advanced economies to provide more resources to low-income countries, warning of a “Big Divergence” in global growth that could put stability at risk and lead to social unrest for years to come.
Kristalina Georgieva told journalists that 50 percent of developing countries were at risk of falling further behind, increasing concern about stability and social unrest.
To avoid greater problems, rich countries and international institutions should contribute more, she said. She also called for highly indebted countries to seek debt restructuring as soon as possible and to improve conditions for growth.
“Last year, the main focus was on the ‘Great Lockdown’. This year, we run the risk of the ‘Great Divergence,'” she said.
Georgieva to reporters during a video conference. “We estimate that developing countries, which have been converging on income levels for decades, will be in a very difficult situation this time”.
Retreats in living standards in developing countries would make it much more difficult to achieve stability and security for the rest of the world, he said.
Georgieva said that advanced economies spent an average of 24 percent of GDP (Gross Domestic Product) to support measures during the pandemic, compared to 6 percent in emerging countries and 2 percent in low-income countries.
A former World Bank executive, Georgieva said that vaccination campaigns have been uneven, with the poorest countries facing “tremendous difficulties.
“We need to do all we can to reverse this dangerous divergence,” she said, citing that developing countries may also be left out of a profound change that is underway in rich countries, with a migration to more digital and sustainable economies.
She said accelerating immunisation could add nine billion dollars (677 billion meticais) to the global economy by 2025, with 60 percent of the benefits going to developing countries. – (G1)
