IMF,interesting latest news

 

Dear maria, We just published a new blog—please find the full text below.  The G20 Common Framework for Debt Treatments Must Be Stepped Up (Photo: YOH4NN by Getty Images) By Kristalina Georgieva and Ceyla Pazarbasioglu With the debt service suspension initiative expiring and interest rates poised to rise, low-income countries will find it increasingly difficult to service their debts. Despite significant relief measures brought on by the COVID-19 crisis, about 60 percent of low-income countries are at high risk or already in debt distress. In 2015 that number was below 30 percent. For many of these countries, the challenges are mounting. New variants are causing further disruptions to economic activity. COVID-related initiatives such as the G20 Debt Service Suspension Initiative (DSSI) are ending. Many countries face arrears or a reduction in priority expenditures. We may see economic collapse in some countries unless G20 creditors agree to accelerate debt restructurings and suspend debt service while the restructurings are being negotiated. It is also critical that private sector creditors implement debt relief on comparable terms. Recent experiences of Chad, Ethiopia, and Zambia show that the Common Framework for debt treatments beyond the DSSI must be improved. Quick action is needed to build confidence in the framework and provide a road map for helping other countries facing increasing debt vulnerabilities. 2022: a more challenging debt outlook Since the start of the pandemic, low-income countries have benefited from some attenuating measures. Domestic policies, together with low interest rates in advanced economies mitigated the financial impact of the crisis on their economies. The G20 put in place the DSSI to temporarily pause official debt payments to the poorest countries, followed by the Common Framework to help these countries restructure their debt and deal with insolvency and protracted liquidity problems. The international community also scaled-up its financial support, including record IMF emergency lending and a $650 billion allocation of special drawing rights, or SDRs—$21 billion of which was allocated directly to low-income countries. The G20 leaders committed to support low-income countries with onlending $100 billion of their SDRs to significantly magnify this impact. No doubt 2022 will be much more challenging with the tightening of international financial conditions on the horizon. The DSSI will expire at the end of this year forcing participating countries to resume debt service payments. Countries will need to transition to strong programs, and for low-income countries that need comprehensive debt treatment, the Common Framework will be critical to unlock IMF financing. But the Common Framework is yet to deliver on its promise. This requires prompt action. Implementation so far has been slow The Common Framework is intended to deal with insolvency and protracted liquidity problems, along with the implementation of an IMF-supported reform program. G20 official creditors—both traditional “Paris Club” creditors, such as France and the United States, and new creditors, such as China and India, which, as shown in the chart below, overtook the Paris Club as lenders in the last decade—agreed to coordinate to provide debt relief consistent with the debtor’s capacity to pay and maintain essential spending needs. The Common Framework requires private creditors to participate on comparable terms to overcome collective action challenges and ensure fair burden sharing. But so far, only three countries—Chad, Ethiopia, and Zambia—have made requests for debt relief under the Common Framework. And each case has experienced significant delays. In part, these delays reflect the problems that motivated the creation of the Common Framework in the first place. These include coordinating Paris Club and other creditors, as well as multiple government institutions and agencies within creditor countries, which can slow down decisions. The Common Framework aims to mitigate these problems but does not eliminate them. New creditors, including relevant domestic institutions, need to gain comfort with restructuring processes that would allow all creditors to work together in providing relief and enable the IMF to lend to countries facing debt difficulties. This takes time. But there were also delays for reasons that have nothing to do with the Common Framework. To restore debt sustainability, Chad must restructure a large, collateralized obligation held by a private company, which is partly syndicated to a large number of banks and funds. This complicates the decision-making process. Domestic challenges slowed progress in Ethiopia and Zambia. No time to waste With policy space tightening for highly indebted countries, the framework can and must deliver more quickly. First, greater clarity on the different steps and timelines in the Common Framework process is vital. Alongside earlier engagement of official creditors with the debtor and with private creditors, this would help accelerate decision making. Second, a comprehensive and sustained debt service payment standstill for the duration of the negotiation would provide relief to the debtor at a time when it is under stress, as well as incentivize faster procedures to get to the actual debt restructuring. Third, the Common Framework should clarify further how the comparability of treatment will be effectively enforced, including as needed through implementation of the IMF arrears policies, so as to give greater comfort to creditors and debtors. Last but not least, the Common Framework should be expanded to other highly-indebted countries that can benefit from creditor coordination. Timely and orderly debt resolution is in the interest of both debtors and creditors. Ensuring a success in the early cases will not only benefit the countries, but foster confidence in the Common Framework. In that regard, finalizing Chad’s restructuring quickly can serve as an essential precedent for other countries. In Ethiopia, the creditor committee should continue the technical work that will allow early provision of debt relief assurances once the situation stabilizes. In Zambia, G20 creditors should expeditiously form a committee of official creditors and begin engaging with the authorities and private creditors on debt relief, while also providing a temporary debt-service suspension for the duration of the debt-restructuring discussions. Otherwise, the country would be confronted with the impossible choice of cutting priority expenditures or piling up arrears. Debt challenges are pressing and the need for action is urgent. The recent Omicron variant is a stark reminder that the pandemic will be with us for a while. Determined multilateral action is needed now to address vaccine inequality globally and also to support timely and orderly debt resolution. For its part, the IMF is ready to work with the World Bank and all our partners to help ensure the framework delivers for the people it was put in place to help. ***** Related links: Sovereign Debt Joint Action Needed to Secure the Recovery Low-Income Countries Glenn Gottselig Managing Editor IMF Blog ggottselig@IMF.org   Thank you again for your interest in IMF Blog. Read more of our latest content here. Take good care!

Dear maria, Good health is the foundation on which to build—a life, a community, an economy. In our Winter 2021 issue of F&D Magazine we focus on safeguarding global health and well-being. The COVID-19 pandemic has exposed gaps in international cooperation and forced a rethink of public health systems. It has also made us reconsider what defines a healthy society. The crisis has shown the inextricable link between health, both physical and mental, and the economy. “The depth of the pandemic’s shock—and the lessons from it—will perhaps spur individual countries and the international community to treat health as a public policy priority that will make for happier and more productive societies. As Mahatma Gandhi said, ‘Health is the real wealth…,’” writes F&D editor-in-chief Gita Bhatt. The striking cover art for this issue, created by Bahamian artist Ben Ferguson Jr., is titled “Heal” and is inspired by traditional “bush medicine” and the healing properties of nature. Ferguson says he portrayed the mind “in a state of achieving wholeness, healing, and a sense of well-being.” In this issue, we’ve assembled a lineup of accomplished authors who provide cutting-edge research, analysis, and insight of what is needed to improve health and well-being. In addition, we have complementary podcasts, videos, and other multimedia elements to stimulate your thinking. We hope this issue offers our readers food for thought and a glimpse into a more hopeful future. FEATURED ARTICLES: Rethinking Multilateralism for a Pandemic Era | Ngozi Okonjo-Iweala, Tharman Shanmugaratnam, and Larry Summers Pandemic Economics | Ruchir Agarwal and Gita Gopinath Measuring the Essence of the Good Life | Daniel Benjamin, Kristen Cooper, Ori Heffetz, and Miles Kimball Accelerating Vaccinations | Arthur Baker, Esha Chaudhuri, and Michael Kremer Financing Health Systems for the Future | Tedros Adhanom Ghebreyesus Going the Last Mile | Eugene Bempong Nyantakyi and Jonathan Munemo Reflections on a Healthy Society | Michelle Bachelet, Jeffrey Sachs, K.K. Shailaja, Christian Happi, Kate Soper, and María del Rocío Sáenz A Life Well Lived: Denmark, Costa Rica and New Zealand | Analisa R. Bala, Adam Behsudi, and Anna Jaquiery Listening to Social Silence | Gillian Tett Towards Better Pandemic Preparedness | Jay Patel and Devi Sridhar A New Public Health Order for Africa | John Nkengasong Dementia Storm on the Horizon | Nathaniel Counts, Arindam Nandi, Benjamin Seligman, and Daniel Tortorice The African Century | Abebe Aemro Selassie Also in this issue: Chris Wellisz profiles MIT’s Amy Finkelstein for our People in Economics series. Ruchir Agarwal interviews the Global Fund’s Peter Sands on why economists should pay more attention to global health. Our Picture This series, led by Andrew Stanley, examines the path to inoculating the world. Moya Chin explores global public goods in our Back to Basic series. Finally, José Deodoro, Michael Gorbanyov, Majid Malaika, and Tahsin Saadi Sedik take a look at the possibilities and perils of quantum computing. We also review three new books: The Future of Money: How the Digital Revolution is Transforming Currencies and Finance by Eswar S. Prasad Tumultuous Times: Central Banking in an Era of Crisis by Masaaki Shirakawa Where Credit is Due: How Africa’s Debt Can Be a Benefit, Not a Burden by Gregory Smith.   Stay Engaged Please don’t hesitate contact me directly. I'd love to hear what you think of our content or what you would like to see more coverage of. Please do flag any interesting or significant research we should consider showcasing. We will be publishing more online articles in the coming weeks and months on a range of subjects. Adam Behsudi Senior Editor F&D Magazine abehsudi@IMF.org   P.S.  As always, this issue will soon be available in español, français, عربي, русский, 中文 and 日本語.  You can also get a print copy delivered to your home or office.

The pandemic has reinforced the inextricable link between human and economic health.

Dear maria, We just published a new blog—please find the full text below.  The Economics of Health and Well-Being (Illustration: Ben Ferguson) By Gita Bhatt Dear Readers, Just as good health—mental and physical—is fundamental to individual well-being, public health is fundamental to stable, cohesive societies. That is the lesson we must take from the COVID-19 pandemic. The inextricable link between human and economic health is another lesson. The pandemic plunged the world into the deepest economic contraction in generations, slowing progress on education, poverty eradication, and inclusive development. Overcoming the pandemic is a prerequisite to restoring jobs, livelihoods, and economic growth, say the IMF’s Gita Gopinath and Ruchir Agarwal. This makes it critical for global economic and financial stability, and therefore of fundamental importance to the IMF. That is why we focus this issue of Finance & Development on global health and well-being. Our authors explore future global health threats and countries’ vulnerabilities to them. They examine gaps in health care capacities within nations and the global health security system. And they consider the role of prudent public policy and responsible politics in health care. World Trade Organization chief Ngozi Okonjo-Iweala, Singapore’s senior minister Tharman Shanmugaratnam, and Harvard’s Larry Summers call for rethinking international collaboration, with additional investments of at least $15 billion a year to avert future pandemics. Rather than viewing support for global health security as “aid for other nations,” they suggest treating it as a strategic investment that benefits every nation—rich or poor. For World Health Organization head Tedros Adhanom Ghebreyesus public financing is the core of universal health coverage. He argues that health and finance authorities must now work together to bolster health systems and economies in a mutually reinforcing way. Nobel Laureate Michael Kremer and coauthors offer ideas to speed vaccinations in the next pandemic, including investments in manufacturing capacity and supply chains and research that have widespread benefits for society. In a special feature, Miles Kimball and colleagues discuss a better way to measure prosperity beyond the traditional metric of GDP. We also report on three country case studies that show that effectively delivering services at the community level (Costa Rica), cultivating social trust (Denmark), and accounting for well-being at the highest policy level (New Zealand) all play an important role in maintaining the health and happiness of citizens. The depth of the pandemic’s shock—and the lessons from it—will perhaps spur individual countries and the international community to treat health as a public policy priority that will make for happier and more productive societies. As Mahatma Gandhi said, “Health is the real wealth…” Read full issue here. GITA BHATT, editor-in-chief   We Want To Hear From You! Click here for a 3-question survey on IMFBlog. Glenn Gottselig Managing Editor IMF Blog ggottselig@IMF.org   Thank you again for your interest in IMF Blog. Read more of our latest content here. Take good care!

Algeria Algeria at a Crossroads An ancient town in the M'Zab Valley. Algeria's economy is making a gradual recovery from the pandemic. (photo: Leonid Andronov) By Mahmoud Harb IMF Middle East and Central Asia Department   The Algerian economy is gradually recovering from the initial impact of the pandemic and last year’s oil price shock. The health crisis has eased, most containment measures have been lifted, and domestic production of vaccines is supporting immunization efforts. With the rebound in hydrocarbon production and prices, growth has resumed, but the outlook is highly uncertain. The government’s policy response helped cushion the economy. However, the 2020 shocks exacerbated the economy’s longstanding imbalances, accelerating the rise in government debt and the fall in international reserves. Therefore, policy recalibration is needed to safeguard macroeconomic stability. The Government Action Plan that was unveiled in September incorporates wide-ranging reforms to support the recovery, unleash new growth drivers, and bolster governance and social cohesion. Progress on these reforms is also crucial for transitioning to a more stable, diversified and inclusive growth model. Algeria has many untapped sources of growth and jobs. Developing them requires a profound transformation of the economy and diversifying it away from hydrocarbons. The recovery from the pandemic provides a unique opportunity for Algeria to rebuild resilience and harness the potential from its dynamic youth. (click on the image below to see a larger version)   ***** Mahmoud Harb is an economist in the IMF's Middle East and Central Asia Department. RELATED LINKS Read the press release Algeria and the IMF