IMF Support Gap Needs Closing to Protect From Trillions of Dollars of Extra Risk to Global Economy: Gopinath (2)

By Mathew Carr

Jan. 25-27, 2022 — Tackling the climate crisis requires getting out of the pandemic in the short term to better support long-term policy making — boosting economic output evenly across the world, raising vaccination levels and limiting unfairnesses that have been exacerbated by the health crisis.

Otherwise, policy makers will continue to be too distracted by the coronavirus’s impact and the required response.

It’s not surprising, but it’s still unseemly that instead of deploying climate policy countries are scrambling to make fossil-fuel money out of the pandemic recovery. The opportunity to build back better is being lost.

China imported US$366 billion worth of energy commodities in 2021, a 50% increase year-on-year largely due to higher global oil and natural gas prices, Wood Mackenzie forecasts. China also represents a big risk to this year’s economic output because it doesn’t have a permanent solution to the virus. Future supply chain disruption seems likely.

Pandemic recovery in emerging nations may require more protection by the the IMF, said Gita Gopinath, the First Deputy Managing Director of the International Monetary Fund, which released it world economic outlook earlier this week:

Gopinath

Link to full transcript here.

One of the punchlines

“For me, it’s fairly simple. We have a pandemic that we are now estimating will cost the global economy $13.8 trillion by 2024.

“There there is, you know, the IMF pandemic proposal was for $50 billion.

“We’re now at a point where the residue grant financing gap is about $16 billion.

“And any simulation that we do have the benefits of reducing risks of much more scary variants showing up … the reversal in recovery prospects are waiting in countries that are getting hit by the virus variants …. I mean, all of that is in the trillions of dollars.

“So we’re comparing trillions to $16 billion in terms of grant financing at this point, I think it’s pretty obvious that that we should close that gap because the benefits are tremendous,” she said.

(Adds unseemly situation / context, link, AI translation, plus CarrZee smoothing)

*Cost-efficient climate policy being pushed back yet again: CarrZee short story here.

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