In a speech at a media roundtable during the 2021 annual meeting of the International Monetary Fund (IMF) and the World Bank Group, Malpass said that development progress in some countries are being set back for several years because of the pandemic. The pandemic has devastated lives and livelihoods worldwide after inaction by the Chinese Communist Party (CCP) saw the CCP virus, which causes the disease COVID-19, spread from Wuhan to around the world. Over 4.8 million people have died at the time of writing.
The international group expects a global growth of 5.7 percent in 2021 and 4.4 percent in 2022, but Malpass said the global recovery “remains dramatically uneven,” as the gap between developed and developing economies continues to widen.
“Incoming high-frequency data points to slowing momentum in global activity, amid persistent supply chain bottlenecks and COVID-19 surges,” Malpass said. “The outlook is challenging for much of the developing world, with lagging vaccination rates rising, inflation, limited policy support, too few jobs, and shortages that extend to food, water, and electricity.”
He said the per capita income in advanced economies is expected to grow by 5 percent in 2021, but it is only expected to grow by 0.5 percent in low-income countries. The debt owed by low-income countries is also expected to increase by 12 percent to reach $860 billion by 2022, according to the World Bank’s latest report on international debt statistics.
“We’re witnessing what I call tragic reversals in development across many dimensions. Progress in reducing extreme poverty has been set back by years—for some, by a decade,” he said.
To address the said disparities, Malpass called on both the advanced economies and developing countries to redirect their policies, so that growth and investment are “more widespread, less concentrated at the top.”
While Malpass didn’t offer many details about what policies could achieve this effectively, the IMF proposed last week that the world should take strong policy actions to “vaccinate, calibrate, and accelerate” in order to achieve a “balanced global recovery.”
Specifically, the IMF said it will work with the World Bank, World Health Organization, and World Trade Organization to vaccinate at least 40 percent of people in every country by the end of 2021, and 70 percent by the first half of 2022.
“Richer nations must deliver on their donation pledges immediately,” the IMF said.
The IMF is also urging the world, including wealthier developed nations, to continue calibrating inflation and monetary policy because certain countries are already facing rising inflation and price pressures.
The changes will pave way to a transition toward a “greener, smarter, and fairer” future, the IMF said of its policy proposal. To accelerate this process, the world will need to institute a “robust price on carbon,” a global minimum corporate tax, a substantial scaling-up of “green investment” over the next 20 years, and “fairer and more efficient tax systems.”
“By working together, we can ensure that the transformation of the international monetary system benefits all,” said Kristalina Georgieva, the managing director for IMF and former vice president of the European Commission.
Georgieva is currently under review over claims that she pressured World Bank staff to alter data to benefit China in her previous role.