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May 23, 2021
IMF (International Monetary Fund) Managing Director Kristalina Georgieva addresses the Global Health Forum in Italy, Announces $50 Billion Proposal to End the COVID-19 Pandemic.
Photo: IMF (International Monetary Fund) Managing Director Kristalina Georgieva. Washington, DC, United States. IMF Photo/Cory Hancock. Image provided by & copyright © IMF.
• IMF (International Monetary Fund) Managing Director Kristalina Georgieva’s Remarks to the Global Health Summit, organized by the European Commission and Italy, as chair of the G20. May 21, 2021.
Excellencies,
I would like to thank Prime Minister Draghi, President Von de Leyen, and their staff for preparing this vital Summit.
By now, we all know there is no durable end to the economic crisis without an end to the health crisis. That means the pandemic policy is a monetary policy highly relevant to the work of the IMF. The economic recovery depends on how we conduct it.
In particular, the pandemic policy matters for preventing this dangerous divergence of economic fortunes about which we have been warning. It will only worsen as the gap widens between wealthy countries that have access to vaccines and emerging countries that do not, and it will slow down the exit from the crisis for everybody.
IMF staff published today a contribution to the ongoing efforts made by many others to address the gap in vaccines, diagnostics, and therapeutics many developing countries face—and help bring the Pandemic substantially under control everywhere for everyone’s benefit. It builds on the work of WHO, World Bank, Gavi, African Union and has three broad elements, at the estimated cost of $50 billion.
First. Vaccination of at least 40 percent of the population in all countries by end-2021, and at least 60 percent by the first half of 2022. To do so requires additional upfront grants to COVAX, donating surplus doses, and free cross-border flows of raw materials and finished vaccines.
Second. Insurance against downside risks such as new variants that may necessitate booster shots. It means investing in additional vaccine production capacity by 1 billion doses, diversifying production, scaling up genomic surveillance and supply-chain surveillance, and contingency plans to handle virus mutations or supply shocks.
Third. Management of the interim period where vaccine supply is limited with widespread testing and tracing, therapeutic and public health measures, and, at the same time, ramping up preparations for vaccine deployment together with any approved dose-stretching strategies.
Of the $50 billion, we envisage grant financing of at least $35 billion. G20 governments have already identified it as essential to address the $22 billion funding gap noted by the ACT-Accelerator. It would need to be topped up by an additional $13 billion in grant contributions.
The remainder of the overall financing plan - around $15 billion - could come from national governments, supported by COVID-19 concessional financing, primarily from facilities already created by multilateral development banks.
Notably, the proposal requires not just commitments but upfront financing, upfront vaccine donations, and upfront ‘at risk’ precautionary investments. It is essential that all necessary funding is available as soon as possible.
The outsized benefits dwarf the costs of the plan. As we have been stressing, a faster end to the Pandemic saves lives. It could inject the equivalent of $9 trillion into the global economy by 2025 due to a quicker resumption of economic activity. And advanced economies — asked to contribute most to this effort — would likely see the highest return on public investment in modern history, capturing 40 percent of the GDP gains and roughly $1 trillion in additional tax revenues.
Concrete and coordinated action is the way out of this unprecedented health and economic crisis. With the support of our membership, we are working towards making an essential contribution to the exit from this crisis by boosting global reserves with $650 billion Special Drawing Rights — significant for countries faced with the toughest challenges. We are stepping up lending where needed, and we are working on debt sustainability. You can count on us to play our part.
Thank you.
Source: International Monetary Fund
The International Monetary Fund (IMF) is an international financial institution headquartered in Washington, D.C. It consists of 190 countries working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty worldwide.
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