{"id":22354,"date":"2022-10-13T12:37:43","date_gmt":"2022-10-13T16:37:43","guid":{"rendered":"https:\/\/www.bu.edu\/gdp\/?p=22354"},"modified":"2026-05-06T11:14:20","modified_gmt":"2026-05-06T15:14:20","slug":"all-hands-on-deck-ensuring-crisis-response-capacity-at-the-imf-world-bank-group-annual-meetings","status":"publish","type":"post","link":"https:\/\/www.bu.edu\/gdp\/2022\/10\/13\/all-hands-on-deck-ensuring-crisis-response-capacity-at-the-imf-world-bank-group-annual-meetings\/","title":{"rendered":"All Hands on Deck? Ensuring Crisis Response Capacity at the IMF\/World Bank Group Annual Meetings"},"content":{"rendered":"
\"\"
S\u00e3o Paulo Brazil by Vinicius Amano via Unsplash.<\/figcaption><\/figure>\n

By William Kring<\/a>
\n<\/strong>
\nAs a surging US dollar wreaks havoc on emerging market and developing economies already battling high levels of indebtedness, climate change and inflation woes, central bank governors and finance ministers will convene in Washington, D.C. this week for the 2022 Annual Meetings of the International Monetary Fund (IMF) and World Bank Group. The meetings could not come at a more pivotal moment.<\/p>\n

While experts have been warning for months that the world stands on the brink of a widespread sovereign debt crisis, coordinated political will is lacking. According to the United Nations Conference on Trade and Development (UNCTAD), nearly 60 percent<\/a> of low-income countries and 30 percent of emerging market economies are in or near debt distress. Despite calls by 55 finance ministers<\/a> for debt restructuring, no progress has been made on multilateral efforts to ensure debt levels are sustainable for emerging market and developing economies (EMDEs). UNCTAD warns<\/a> that while there is still a window of opportunity to prevent a ‘policy-induced recession,\u2019 if the current course of action is not corrected, the global economy could face a financial crisis worse than the 2007-2009 financial crisis.<\/p>\n

The Annual Meetings represent possibly the last opportunity to prepare for the coming storm. There are three areas in which progress is urgently needed to avert a catastrophic global recession.<\/p>\n

First, comprehensive debt restructuring is necessary across all creditor classes for EMDEs. In particular, the Vulnerable Group of Twenty (V20) Finance Ministers, comprised of 55 climate vulnerable economies, are facing high levels<\/a> of indebtedness as well as an urgent need to mobilize the necessary resources to build resilient and low-carbon economies moving forward.<\/p>\n

Second, while the resources available as part of the Global Financial Safety Net (GFSN) for crisis prevention and liquidity support via emergency financing institutions and arrangements has increased to more than $3.5 trillion over the last decade, recent research<\/a> by the Boston University Global Development Policy (GDP) Center and Freie University Berlin finds that the GFSN has been scarcely utilized throughout the COVID-19 crisis. We find that coordination of the different components of the GFSN could optimize the utilization of the available resources and reduce transaction costs for both borrowers and lenders. However, the autonomy of each component of the GFSN to operate independently of influence from non-member countries or other organizations must be safeguarded.<\/p>\n

Finally, the IMF needs to be better resourced to respond to the looming debt crisis.\u00a0To ensure that the IMF is sufficiently resourced, it is essential that the 16th<\/sup>\u00a0General Review of Quotas\u00a0marshal\u00a0sufficient resources to increase the lending firepower of the IMF, as there is an urgent need for quota reform<\/a>. Additionally, developed economies could prioritize payments<\/a> to the Poverty Reduction and Growth Trust and the new Resilience and Sustainability Trust Fund (RST).<\/p>\n

At the GDP Center, the Global Economic Governance Initiative has developed a series of trackers to monitor the COVID-19 crisis response and recovery. Throughout the pandemic, these interactives have proved to be sources of vital public information for policymakers, reporters, researchers, civil society, students and others to explore and draw insights on the crisis and recovery process. These tools are updated quarterly, as research seeks to provide accountable and accessible information to monitor, track and aid the global economic recovery effort.<\/p>\n

New updates to the trackers were launched in October 2022. See highlights from the latest releases below:<\/p>\n

\n
Global Financial Safety Net Tracker<\/strong><\/a><\/h5>\n

\"\"The Global Financial Safety Net Tracker, comprised of two components, allows users to explore and track the global financial agreements and short-term crisis finance. The first component of the interactive displays the total amount of financing provided by the IMF, regional financial arrangements (RFAs) and central bank bilateral currency swaps deployed to combat the COVID-19 crisis. Country specific data, approved loan amounts, RFA membership and country income group information are available for highlighted countries within the interactive. This COVID-19 tracking source is the first of its kind providing regular updates and overviews of all RFA loans and central bank currency swaps disbursed in response to the pandemic. A recently updated feature allows users to visualize the directionality of swap flows from lending to borrowing countries. The second component of the interactive is the GFSN Annual Lending Capacity, where countries are color-coded based on the lending capacity available to them through the IMF, RFAs or central bank currency swaps.<\/p>\n

As of August 2022,\u00a0the GDP Center and the Latin American Institute at Freie Universit\u00e4t Berlin estimate the financing available from the GFSN has again increased to approximately $3.7 trillion in lending capacity, or 4.5 percent of global gross domestic product (GDP). However, distribution and availability of these emergency funds has been highly uneven and unequal. According to researchers<\/a>, there is an urgent need to coordinate the different elements of the GFSN to improve country access to vital fiscal resources.\u00a0Explore the interactive<\/em><\/strong><\/a>\u00a0<\/em>and\u00a0read the journal article.<\/em><\/strong><\/a><\/p>\n

\n
IMF COVID-19 Recovery Index<\/strong><\/a><\/h5>\n

\"\"Since the April 2022 update to the IMF COVID-19 Recovery Index, the IMF has stopped tracking their financial assistance to countries as part of their response to the pandemic. However, the IMF still evaluates the impact of the pandemic on the countries, their authorities\u2019 responses, and in certain cases, provides recommendations or conditionalities on policies that support public health, vulnerable populations and a \u201cgreen\u201d recovery.<\/p>\n

Between March 2020-September 2022, the IMF approved\u00a0$174.21 billion\u00a0for\u00a0152 programs in 93 countries, emphasizing support for public health, protecting vulnerable people and building a green recovery. The IMF COVID-19 Recovery Index assesses this global economic recovery process, calculating a composite score for each IMF country program or borrowing country, based on three equally weighted scores across the three pillars of public health, protecting vulnerable people and a green recovery.<\/p>\n

While many IMF programs encouraged emergency measures for public health and the protection of vulnerable people, efforts in greening the recovery have so far been limited. For example, the Index shows that 100\u00a0of 142\u00a0IMF COVID-19 response programs analyzed\u00a0do not address climate change, or green recovery efforts at all.<\/p>\n

In the latest update of the IMF COVID-19 Recovery Index, we evaluated eight new programs representing around $4.3 billion in disbursements to Pakistan, Benin, Cabo Verde, Republic of Congo, Tanzania, Zambia, Burundi, and Congo.\u00a0The average score on the IMF COVID-19 Recovery Index did not show a significant increase and increased from 2.1 to 2.2 out of a maximum of 3. From the recently evaluated programs, six were approved between February to September 2022. Among these programs, it is important to emphasize the importance the IMF has placed on providing recommendations for a \u201cgreen\u201d recovery. In each case, the IMF has identified climate change as an important source of risk to the countries and made recommendations from investing in climate-resilient infrastructure in the Republic of Congo and Cabo Verde, to developing policies that help the strength climate change resilience and climate risks mitigation and adaptation in Benin and Pakistan.\u00a0Explore the data<\/em><\/strong><\/a>\u00a0<\/em><\/strong>and\u00a0read the journal article<\/em><\/strong><\/a>.<\/p>\n

*<\/p>\n

Never miss an update: <\/em>Subscribe to the Global Economic Governance Newsletter<\/em><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

By William Kring As a surging US dollar wreaks havoc on emerging market and developing economies already battling high levels of indebtedness, climate change and inflation woes, central bank governors and finance ministers will convene in Washington, D.C. this week for the 2022 Annual Meetings of the International Monetary Fund (IMF) and World Bank Group. […]<\/p>\n","protected":false},"author":19363,"featured_media":22357,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[398,55,156,77,1074,58],"tags":[1618,3002,3001,2997,1998,756,1344,907,438,459,766,2999,1064,772,178,1693,841],"_links":{"self":[{"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/posts\/22354"}],"collection":[{"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/users\/19363"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/comments?post=22354"}],"version-history":[{"count":6,"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/posts\/22354\/revisions"}],"predecessor-version":[{"id":32937,"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/posts\/22354\/revisions\/32937"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/media\/22357"}],"wp:attachment":[{"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/media?parent=22354"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/categories?post=22354"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/tags?post=22354"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}