Washington DC – International Monetary Fund head Kristalina Georgieva warned of an uncertain global recovery as the world struggles with the COVID spurred economic crisis. The IMF Managing Director stated concern that average incomes in developing countries faced drops of 20% and 11% in advanced economies. "This loss of income means millions of people will face destitution, homelessness, and hunger," reported Georgieva during her curtain raiser speech ahead of the Spring IMF and World Bank meetings.
"While prospects for economic recovery are higher in the United States and China, every country in the world faces greater inequality and increases in poverty," noted Jubilee USA Executive Director Eric LeCompte who has monitored IMF policies for more than a decade. "The average person is worse off as the pandemic economic crisis continues."
The IMF chief warned developing countries, with less vaccine access, lower budgets and higher debts, could face more pressure. In particular developing middle-income countries face serious challenges.
“The IMF is right that middle-income countries need more support,” added LeCompte. "Developing middle-income countries face the highest job losses and increases in poverty. Yet, these countries are left out of critical aid and debt relief initiatives."
Georgieva highlighted one area on the horizon that could benefit these countries, is the creation of $650 billion in global reserve funds known as Special Drawing Rights.
“The creation of Special Drawing Rights will deliver more than $200 billion in aid for developing countries," reflected LeCompte.
View Managing Director Kristalina Georgieva's Spring IMF Meetings Curtain Raiser Speech here.
Read about the IMF's announcement of support for $650 billion in emergency reserves here.