Is the IMF Encouraging World Financial Leaders to Walk Blindly Towards More Austerity?

By Isabel Ortiz and Richard JollyNEW YORK and SUSSEX, Oct 16 2020 (IPS) This week the world’s Ministers of Finance and Central Bank Governors meet virtually at the 2020 Annual Meetings of the International Monetary Fund and the World Bank and decide on the fate of the world. This year’s gathering is particularly important, given that the world is confronting an unprecedented crisis. Governments are struggling to finance emergency care and urgent socioeconomic support to cope with the COVID19 pandemic. Isabel Ortiz While these short-term expenditures are necessary, countries need more than intensive care units, respirators, tests and emergency support. Governments must continue to invest in long-term public health, universal social protection floors, employment-generating activities and other sustainable development goals. The funding gap remains vast. However, the budgetary capacity or fiscal space is more limited than before COVID19, as pandemic emergency spending has left governments with higher levels of debt and fiscal deficits. Many countries received support from the IMF’s Rapid Financing Instruments and other arrangements, or obtained additional loans to cope with the COVID19 emergency, leaving them more indebted. But now the IMF and world financial leaders are talking about “necessary” fiscal consolidation or austerity cuts after the pandemic. Austerity cutbacks reduce economic activity and worsen living conditions. The pandemic has revealed the weak state ...
Source: IPS Inter Press Service - Health - Category: International Medicine & Public Health Authors: Tags: Development & Aid Economy & Trade Featured Financial Crisis Global Headlines Health Humanitarian Emergencies Labour Sustainability TerraViva United Nations Source Type: news