IMF Managing Director Georgieva Stresses Global Crisis Is ‘Like No Other … It Could Get Worse’
April 9, 2020 (EIRNS)—In a prerecorded video speech prepared for delivery prior to next week’s annual meeting of the International Monetary Fund and World Bank, IMF Managing Director Kristalina Georgieva asserted that the current global crisis is “a crisis like no other.” COVID-19’s disruption of the social and economic order has occurred “at lightning speed and on a scale we have not seen in living memory.”
All true enough, but Georgieva has nothing to offer other than vague suggestions of providing “trillions of dollars” in emergency financing and/or debt relief—none of which will happen under the current system.
She said, “Just three months ago, we expected positive per-capita income growth in over 160 of our member countries in 2020. Today, that number has been turned on its head: We now project that over 170 countries will experience negative per-capita income growth this year.” She predicted that if the pandemic fades in the second half of the year,
“thus allowing a gradual lifting of containment measures and reopening of the economy—our baseline assumption is for a partial recovery in 2021. But again, I stress there is tremendous uncertainty around the outlook: it could get worse depending on many variable factors, including the duration of the pandemic,”
she stressed (emphasis in original).
In the developing sector, investors have withdrawn at least $100 billion from these markets just in the last two months—three times the amount withdrawn during the same period of the 2008 financial crisis. External financing needs for these emerging markets are estimated to be in the “trillions of dollars, and they can cover only a portion of that on their own,” she said. “They urgently need help,” she continued, which means that hundreds of billions of dollars would have to be pumped in from outside sources, since those governments are unable to cover the whole costs themselves, and many already had large and unsustainable debts.