IMF moots $50 bn plan to end global Covid crisis

New Delhi, May 21 (IANS) The International Monetary Fund (IMF) has mooted a proposal with a total cost of around $50 billion to vaccinate at least 40 per cent of the population in all countries by the end of 2021 and at least 60 per cent by the first half of 2022.
“The world does not have to live through the pain of another record surge of COVID-19 cases. With strong global action now and with very little in terms of financing relative to the outsized benefits, we can durably exit this health crisis,” IMF said.
Saving lives and livelihoods should need no justification, but a faster end to the pandemic could also inject the equivalent of $9 trillion into the global economy by 2025 due to a faster resumption of economic activity, the IMF has mooted.
Advanced economies, likely to spend the most in this effort, would see the highest return on public investment in modern history – capturing 40 per cent of the cumulative $9 trillion in global GDP gains and roughly $1 trillion in additional tax revenues.
“It is well understood that there can be no lasting end to the economic crisis without an end to the health crisis. Pandemic policy is thus economic policy. It is critical for global macroeconomic and financial stability, which makes it of fundamental importance to the IMF and other economic institutions. Ending the pandemic is a solvable problem but requires further coordinated global action,” IMF said.
The strategy paper includes track and insure against downside risks, ensure widespread testing and tracing, maintain adequate stocks of therapeutics, and enforce public health measures in places where vaccine coverage is low.
Importantly, the strategy requires not just commitments but upfront financing, upfront vaccine donations, and �at-risk’ investment for the world to insure against downside scenarios.
The proposal’s total cost of around $50 billion would include grants, national government resources, and concessional financing.
There is a strong case for grant financing of at least $35 billion. The good news is that the G20 governments have already identified as important to address the $22 billion grant funding gap.
That leaves an additional $13 billion in additional grant contributions needed. The remainder of the overall financing plan – around $15 billion – could come from national governments, potentially supported by Covid-19 financing facilities created by multilateral development banks.
As the IMF has warned, economic recoveries are diverging dangerously. The disparities will widen further between wealthy countries that have widespread access to vaccines, diagnostics and therapeutics, and poorer countries still struggling to inoculate frontline healthcare workers.
As of the end of April 2021, less than 2 per cent of Africa’s population had been vaccinated. By contrast, over 40 per cent of the population in the US and over 20 per cent in Europe had received at least one dose of the vaccine.
For achieving the vaccination targets, IMF has proposed additional upfront grants to Covax of at least $4 billion. This financing will help finalize orders and activate unused vaccine capacity.
The IMF projects that at least 500 million vaccines courses (equivalent to around 1 billion doses) can be donated in 2021, even if countries give preference to their own populations. Donations, including for delivery costs, should be done through Covax so that vaccines are shared on equitable and public health principles.

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