Economic Crisis Could Get Much Worse Says IMF

international | economics and finance | news report Friday April 17, 2020 19:26 by Kate Zeller - Jubilee USA Network

Religious Development Group Urges Solutions

The International Monetary and Financial Committee, the leadership of the IMF, released their Spring Meetings communiqué calling coronavirus economic impacts, "unprecedented" and that "the global economic outlook is subject to high uncertainty."

The International Monetary and Financial Committee, the leadership of the IMF, released their Spring Meetings communiqué calling coronavirus economic impacts, "unprecedented" and that "the global economic outlook is subject to high uncertainty."

"The IMF is saying that our economic prospects are terrible, our economy could even face further disaster and they don't know how much worse it can actually get," noted Eric LeCompte, who leads the religious development group Jubilee USA. "World leaders are taking some strong actions, but even stronger actions are needed if we hope to minimize the loss of life and protect jobs."

Jubilee USA advocated for several IMF crisis solutions since mid-March including dept payment suspensions and expanding an IMF process which delivered health-care aid through debt relief and grants during the 2015 Ebola epidemic. On Monday, the Fund announced the expansion of this Catastrophe Containment and Relief Trust to cancel 6 months of debt for the world's poorest 25 countries. These funds will bolster health systems and support crisis prevention measures in the countries.

On Wednesday the G20 announced a suspension of debt payments and interest for the world's 76 poorest countries and Angola in order to confront the coronavirus.

"We welcome steps taken so far to increase aid, financing and debt relief," stated LeCompte a United Nations finance expert who monitors IMF reports and meetings. "A critical action that the world must take is to access financial reserves so all countries can survive this crisis. The leaders of the IMF and G20 must approve access to these reserves, or what's also known as the special drawing rights or SDRs."

The G20 continues to struggle to reach a consensus on allowing the use of the special drawing rights.

On April 1st, Jubilee USA Network wrote the leader of the IMF urging the selling of gold reserves to provide greater aid to developing countries, after analyzing Fund balance sheets and the current market price of gold.

"The IMF holds $140 billion in gold reserves. Portions of this money can be used to get more aid and relief to the world's most vulnerable countries," shared LeCompte.

In a March 23rd letter to the IMF, Jubilee USA called for a “well-designed, globally-coordinated response from the international community" to the health and economic impacts of the crisis. The development group detailed a plan to expand debt relief, aid, financing, improve debt restructuring and move forward financial crisis protections and transparency initiatives.

"We're only in the bottom of the first inning in dealing with this health and economic crisis," said LeCompte. "We need everyone's help through the last inning. The stakes of playing ball have never been higher and this game's outcome determines how many of us will survive."