IMF: Use debt relief for most at risk from Covid-19

‘Please spend the money on your most vulnerable’: Head of the IMF urges countries that have begged for financial aid to use it on doctors and nurses and those who need it most

• IMF boss Kristalina Georgieva told nations to spend the cash on those in need
• $215million has already been made available to 25 impoverished countries  
• Vast majority are in Africa with the addition of war torn Afghanistan and Yemen
•  102 countries have applied to the IMF for debt relief amid the coronavirus crisis
• Here’s how to help people impacted by Covid-19

The head of the International Monetary Fund has urged countries that have begged for financial aid amid the coronavirus crisis to use it on medical staff and those most desperately in need. 

Kristalina Georgieva, the managing director of the IMF, pleaded today for countries receiving debt relief to spend money on frontline staff after announcing a debt relief package of $215million for 25 of the world’s poorest nations on 14 April.  

She warned that because ‘there are no strings attached’ to the funds provided, the economic regulator will be watching countries closely, adding that many were already ‘coming up with commitments to audit the use of funds’. 

‘The only thing we ask countries is please spend more money for your doctors and nurses – and please please use the money to protect the most vulnerable,’ Georgieva told ITVNews. 

A January file photo of Managing Director of the International Monetary Fund (IMF) Kristalina Georgieva speaking in Washington 

In this file photo taken on April 15, 2020 a sign is seen outside the headquarters of the International Monetary Fund (IMF) as the IMF and World Bank hold their Spring Meetings virtually due to the outbreak of COVID-19, known as coronavirus, in Washington, DC

An elderly woman is seen with a food parcel she received from volunteers at a relief distribution, during a lockdown by the authorities in efforts to limit the spread of the coronavirus disease (COVID-19), in Lagos, Nigeria April 9, 2020

In mid-April, the IMF announced that it would be making $215million available to 25 of the poorest countries over the next six months, with the possibility of extending up to two years. 

Of the 25 countries, the vast majority are in Africa, with the addition of war-torn nations like Afghanistan and Yemen. 

Georgieva added today that some of the most impoverished countries could require their debts written off or restructured later down the line due to the economic consequences of the crisis. 

She said in April that the Catastrophe Containment and Relief Trust (CCRT) had around $500million in resources on hand, including pledges of $185million from Britain, $100 million from Japan, and undisclosed amounts from China, the Netherlands and others.  

Afghans line up to receive free bread, an initiative of Afghan government to provide free bread to families in need amid the ongoing coronavirus COVID-19 pandemic, in Jalalabad, Afghanistan on Sunday

A man washes his hands on a street in Monrovia, Liberia, 20 April 2020. The government of Liberia announced a state of emergency for 21 days on 20 April, with a nationwide quarantine, due to the spread of the coronavirus. Liberia has received debt relief from the IMF due to the Covid-19 crisis

Yemenis make a disinfection chamber amid concerns over the spread of the coronavirus COVID-19, at a workshop in Sanaa, Yemen, 21 April 2020. War-torn Yemen is on the list of 25 poorest countries to receive debt relief from the IMF amid the coronavirus outbreak

The CCRT is pushing to raise the amount available to $1.4billion in the hopes of supporting the unprecedented 102 countries who have applied. 

Georgieva, a Bulgarian economist who had only been in the top role for a few months when the crisis broke out, added: ‘This is the worst crisis since the IMF has been created […] 

‘We are going to be a force for stabilisation and recovery in this world.’  

‘Pray for the best – prepare for the worst,’ she added. 

In mid-April, the IMF warned that the global economy is expected to suffer its worst year since the Great Depression of the 1930s.

The Wall Street Crash in 1929 caused a third of American banks to fail, leading to one quarter of the industrialised world’s workforce unable to find work in the early 1930s. 

The global economy is expected to suffer its worst year since the Great Depression of the 1930s, the International Monetary Fund forecast Tuesday. Unemployed men wait in long lines for bread and handouts during the Great Depression, pictured

The IMF forecasts that the global economy will get 3 per cent smaller during 2020 — far worse than its 0.1 per cent dip in the Great Recession year of 2009. Only China and India of the main economies are expected to grow

The IMF today predicted that the hit to the UK this year will be dwarfed by the problems in Italy, Spain, France and Germany

The IMF believes that, beaten down by the coronavirus outbreak, the world economy will shrink by three per cent during 2020 — far worse than its 0.1 per cent dip in the Great Recession year of 2009 — before rebounding in 2021 with 5.8 per cent growth.

In its latest outlook, the IMF expects economic contractions this year of 5.9 per cent in the United States, with a rebound to 4.7 per cent growth in 2021 under the Fund’s best-case scenario. Euro zone economies will contract by 7.5 per cent in 2020.

China, where the pandemic originated, is expected to eke out 1.2 per cent growth this year. The world’s second-biggest economy, which had gone into lockdown, has begun to open up well before other countries.

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