US$9-trillion income boost from COVAX

FASTER vaccinations could raise the global income cumulatively by US$9 trillion by 2025, with benefits for all countries including some US$4 trillion for advanced economies, says the International Monetary Fund’s (IMF) Deputy Managing Director Antoinette Sayeh.

Equitable and affordable access to COVID-19 therapeutics and vaccines globally will be key to avoiding long-lasting scars on the world economy, Sayeh added.

“The international community must act swiftly to ensure access to vaccines and medical treatments also for low- and middle-income economies. This will require ramping up production, bolstering funding for the COVAX facility and the logistics of vaccine delivery,” Sayeh said.

According to her, since the start of the pandemic the IMF has approved over US$105 billion in total financing for 85 countries, expanded concessional financing for low-income countries and provided immediate debt relief to 29 of the poorest, most vulnerable ones, while providing real time policy advice and capacity development support to over 175 countries.

Sayeh, however emphasised that while the IMF projected global growth at 5.5 per cent in 2021 there is still uncertainty around this forecast which is dependent on the outcome of the race between the mutating virus and vaccines, and on the ability of countries to provide continued support until herd immunity is achieved and recovery is fully underway.

Speaking at the Warwick Economics Summit held recently, she highlighted four policy priorities of the organisation. These included first bringing the health crisis under control, maintaining economic lifelines and policy support, supporting low-income countries through grants and debt relief, and investing in green and digital infrastructure.

The IMF estimated that a combination of green investments and appropriate carbon pricing could result in net zero emissions by mid-century and help create millions of new jobs.

“Governments must put in place public investments – as well as incentives for private investments – that support low-carbon and climate-resilient growth. These could be efficient mass transit systems, smart electricity grids or phasing out harmful subsidies. Similarly, we know that the economy of the future will be digital… so, countries must enable a planned transition by investing in digital infrastructure,” she said.

This investment, she further indicated, must also include support for workers as they transition to expanding sectors, increase investment in training, re-skilling and high-quality education, which will be pivotal to unlocking the potential of a green and digital economy.

“{The year] 2021 will be the most consequential year of our lifetimes. If the international community can come together to help each other get to the other side of the pandemic, we can exit the crisis with minimal economic scarring. And if we begin to sow the right seeds of investments and policies today, we can go even further and build the foundation of a 21st century economy”.