Reclaiming Our World Post-2020

IMF Blog, December 22, 2020

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2020 described as "annus horribilis" with multiple concurrent crises:
- "more than a million and a half COVID-19 deaths"
- "an economic collapse far greater than that of the 2008 financial crisis"
- "a boiling-over of resentment against decades of racial and social injustice"
- "record numbers of wildfires decimating millions of acres of pristine forests"
- "locust plagues of Biblical proportions"
Despite these crises, 2020 also offers reasons for hope tied to scientific progress and international cooperation.

Rapid development and near-simultaneous achievement of "at least three COVID-19 vaccines that promise a high degree of efficacy" characterized as "nothing short of miraculous."
The discovery and distribution of these vaccines depended on cross-border exchange of ideas, goods, and services.
Production and development chain involved:
- "Between the research labs and the researchers as well as the testing and manufacturing (including the various ancillary materials such as glass vials and syringes and special refrigerants), at least a dozen or more countries have already been involved in the development and production of these vaccines."

Reference to José Marià Sert murals at the Palais des Nations that symbolize forces that separate and unite humanity (war, hatred, cruelty, vengeance, exploitation, injustice versus peace, liberty, freedom from drudgery and enslavement).
Murals depict themes including:
- "There is Hope" — a mother and child with defunct cannons
- "Scientific Progress" — doctors liberating humanity from disease
- "Social Progress" — slaves shattering their chains
- "Technical Progress" — technology relieving humans from physical toil
Allegory of continents clasping hands as a visual argument that drawing peoples together is "the only means of achieving a brighter future for all."
Institutional genesis:
- IMF born at the end of a war and "dedicated to international monetary cooperation" to avoid trade and currency wars and provide a basis for jobs and sound economic growth.
- The form of cooperation and the nature of shocks have evolved "considerably in the 75 years since the IMF was established."

Founders' insight: regardless of shock type (examples listed), both the shocks and national policy responses create cross-border spillovers causing tensions between countries.
Examples of past disturbances mentioned:
- "the oil price hikes of the 1970s"
- "the developing country debt crisis of the 1980s"
- "the capital account crises and the transformation of the centrally planned to market economies in the 1990s"
- "the current account imbalances, global financial crisis, and the Great Recession in the 2000s"
- "the pandemic and Great Lockdown this year"
Central prescription: "Resolving them requires cooperation, not confrontation: when each country tries to be first, all end up as last."

IMF operational response during COVID-19:
- "went into overdrive" while reorganizing staff to work from home
- helped members secure urgent financing
- facilitated debt relief so countries could prioritize health expenditures
Anticipated post-vaccine economic landscape:
- Following "widespread distribution of the vaccine and the recovery," economic and financial dislocations are "bound to" occur as governments and societies address legacies of the global financial crisis, the pandemic, and the Great Lockdown.
IMF's continuing role:
- Helping manage international economic repercussions of dislocations manifested through:
- "exchange rate dynamics"
- "net and gross capital flows"
- "asset price movements"
- This assistance described as "very much the bread and butter of the IMF’s work" and "a vital part of its contribution to crafting a better world for tomorrow."

Source: Reclaiming Our World Post-2020 — Atish Rex Ghosh, December 22, 2020