MIL OSI Translation. Government of the Republic of France statements from French to English
Source: MFIS in French
Kristalina Georgieva, the Director general of the IMF
on April 9, 2020
TEXT PREPARED FOR The INTERVENTION
Introduction : A crisis without equal
I would like first of all to express personally to you my best wishes of health and safety to all of you and your family in these difficult times.
We are today facing a crisis like no other. The COVID–19 has turned our social and economic order at lightning speed and in proportions that have never been seen in living memory. The coronavirus because of the tragic loss of human lives and the containment measures taken to combat it are affecting billions of people. Things that were normal it was just a few weeks (to go to school, go to work, spend time with your family and friends) are now extremely risky.
I have no doubt that we will overcome this challenge. Our doctors and nurses there worked day and night, often risking their own lives to save others. Our scientists will find solutions to break the yoke of the COVID-19. Meanwhile, we call for the determination of all : private individuals, public authorities, businesses, community leaders, and international organizations. Act decisively and college to protect lives and livelihoods. It is for moments such as these that the IMF was created. Our mission is to deploy the strength of the world community to protect the most vulnerable populations, and reinvigorate the economy.
The measures we take now will determine the speed and the strength of the recovery. It is on this that will examine the 189 member countries of the IMF with which we will meet virtually in the next week on the occasion of our spring meetings.
It is also the topic of my intervention today.
Current state of the global economy
Let’s start by mapping out the current state of things. Uncertainty extraordinary still reigns as to the magnitude and duration of the crisis we are in.
However, it is already evident that the global growth will be significantly negative in 2020, as you will see in our world economic Outlook next week. In fact, we anticipate the worst economic downturn since the Great depression.
There are just over three months, we projected a positive growth of per capita income in more than 160 of our member countries in 2020. Today, it is the contrary : we are planning now that more than 170 countries will record a negative growth in per capita income this year.
These grim prospects apply to both advanced countries and developing countries. This crisis knows no borders. All the world is proven.
The containment measures necessary to slow the spread of the virus can do serious harm to the global economy. This is especially true for the retail trade, accommodation, transport and sightseeing. In most countries, the majority of workers are either independent or employees of small and medium-sized enterprises. These businesses and these workers are particularly vulnerable.
And just as the vulnerable persons bear the brunt of the health crisis, the vulnerable countries should be paying the brunt of the economic crisis.
The emerging countries and low-income countries in Africa, Latin America and a large part of Asia are at a high risk. With a health system that is already low, many of them are faced with a daunting task : to fight the virus in cities densely populated and slum-blighted by poverty, in which social distancing is difficult. With fewer resources at the outset, they see poses the danger of the current shocks on the demand and supply, a tightening in brutal financial conditions and, for some, a debt to be non-viable.
In addition, they face enormous pressure from the outside.
Over the last two months, the outflows of portfolio investment in emerging countries amounted to about $ 100 billion, more than triple the level recorded in the same period during the global financial crisis. The countries exporting commodities are lagging the double blow of the fall in commodity prices. As to the remittances of the expatriate workers, which depends the survival of many poor persons, they should melt.
According to our estimates, the gross financial needs for external financing of emerging countries and developing countries amounted to thousands of billions of dollars. However, they cannot, by themselves, address only a portion of this demand, which leaves a funding shortfall of hundreds of billions of dollars. They need help in an emergency.
The encouraging news is that not all countries have reacted, and this, in a highly coordinated fashion. Next week, our Instructor, public finance show that the fiscal measures taken by the countries of the world amounted to about 8 000 billion. In addition, the G-20 countries and others have taken massive actions on the monetary side.
Many poorer countries are also taking measures of fiscal and monetary energetic, despite being in the throes of a brutal shock, and in spite of a strike force far inferior to that of their counterparts in the rich.
So this is an overview of the current state of the global economy.
There is no doubt that the year 2020 will be exceptionally difficult. If the pandemic fades in the second half, allowing for a gradual lifting of the containment measures and a re-opening of the economy, our assumption of reference is a partial recovery in 2021. But I reiterate that these perspectives are subject to great uncertainty. They could deteriorate, depending on many factors, including the duration of the pandemic.
All will depend on actions we take now.
What does it do ? A strategy in four parts
Now let’s see how to achieve the recovery. In our opinion, there are four priorities.
First, to maintain the key measures of containment and support to health systems. Some believe that it is necessary to make trade-offs between saving lives and saving livelihoods. This is a false dilemma, according to me. Given that the crisis is the result of a pandemic, to defeat the virus and protect the health of people constitute an imperative for the economic recovery. The message is therefore clear : to give priority to health spending to achieve tests and acquire of medical equipment
The IMF threw all his forces in the battle
This leads me to the role of the IMF.
We work 24 hours on 24 for providing guidance, technical assistance and financial resources to our member countries.
— We have a lending capacity of 1 000 billion dollars that we put at the disposal of our member countries.
— We respond to requests for emergency funding that we have received up to now has more than 90 member countries, a record. Our board of directors has to agree to double the access to our coping mechanisms, which will allow us to meet the requests for financial assistance estimated at about $ 100 billion. Loan programs have already been approved at record speed, in particular for Kyrgyzstan, Rwanda, Madagascar, and Togo. Many others will follow.
— We are reviewing our range of tools to determine how best we can use lines of credit precaution to enhance the liquidity support, establish a line of short-term liquidity and meet the financing needs of the country by other means, including the use of special drawing rights. As regards the countries to which we cannot lend because their debt is not sustainable, we will seek solutions to unlock resources.
— We have revamped our trust fund assistance and response to disasters to provide relief of debt immediate to low-income countries victims of the crisis, which will allow them to devote their resources to the health needs are urgent, rather than the repayment of the debt. Now, with the donors, we work to bring the trust fund to $ 1.4 billion, in order to extend the duration of the debt relief.
— Moreover, with the world Bank, we encourage official bilateral creditors to issue a moratorium on the servicing of the debt of the poorest countries in the world.
I am proud of the services of the IMF, because they spare no effort in the face of this crisis. I await with interest the exchanges that we will have for the spring meetings next week, to determine what we can do.
Conclusion : a test of our humanity
I would like to end on this quote from Victor Hugo : “great perils have this beautiful that they bring to light the fraternity of strangers.”
United by this common threat, we build on the greatest strengths of our humanity : solidarity, courage, creativity and compassion. We do not yet know how our economies and our lifestyles will be transformed, but we know that we will emerge even more resilient from this crisis.
Communications department of the IMF
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EDITOR’S NOTE: This article is a translation. Apologies should the grammar and/or sentence structure is not be perfect.