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IMF Blog, April 3, 2020

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Op-ed first published on The Telegraph by Kristalina Georgieva and Dr Tedros Adhanom Ghebreyesus.
Date: April 3, 2020.
Focus: joint appeal by the WHO and the IMF on coordinated health and economic responses to COVID-19, with emphasis on emerging market and developing economies.

At face value there is a trade-off between saving lives and saving livelihoods; the authors argue this is a false dilemma.
Getting the virus under control is presented as a prerequisite to saving livelihoods.
WHO and IMF roles:
- WHO: protect health of people and advise on health priorities.
- IMF: protect health of the world economy by advising on economic priorities and providing financing.

Health expenditures should be placed at the top of the priority list as financing reaches countries in need.
Specific health spending priorities listed:
- Paying salaries to doctors and nurses.
- Supporting hospitals and emergency rooms.
- Establishing make-shift field clinics.
- Buying protective gear and essential medical equipment.
- Carrying out public awareness campaigns about measures like hand washing.
In many places health systems are unprepared for an onslaught of COVID-19 patients; boosting health-system capacity is paramount.

Economic support measures should go together with health spending, not as a substitute.
Targeted economy-wide priorities include:
- Reducing unemployment.
- Minimising bankruptcies.
- Ensuring recovery over time.
Specific instruments mentioned:
- Cash transfers.
- Wage subsidies.
- Short-time work programs.
- Strengthening unemployment benefits and social safety nets.
- Limiting the rise in borrowing costs.

Economic activity is plummeting as infections and containment measures affect workers, firms, and supply chains.
Job losses and uncertainty reduce spending; financial conditions tighten.
The oil price collapse hits commodity exporters.
Cross-border spillovers amplify effects.
Vulnerabilities in countries with large informal economies:
- Families depend on daily wages to survive.
- Highly congested urban slums make social distancing impossible.

WHO’s coordination role:
- Ensuring production and delivery of medical supplies in an effective, efficient, and equitable manner (e.g., facilitating advance purchase agreements).
- Working with suppliers of personal protective equipment for health workers to ensure functioning supply chains.
Collaboration with other international organisations can be effective (example cited: World Bank’s capacity to aggregate demand to purchase medical supplies in bulk).

IMF emergency response capacity: doubling from $50 billion up to $100 billion to make it possible for countries to get twice as much money from the Fund as had been made available during emergencies.
Total lending capacity: $1 trillion is now secured thanks to decisive actions of its membership.
Increasing capacity to ease debt service obligations of poorest members through the Catastrophe Containment Relief Trust, funded by generous donors providing grant resources.
Joint advocacy with the World Bank for a standstill of debt service from the poorest countries to official bilateral creditors for as long as the world economy is paralysed by the pandemic.

The course of the global health crisis and the fate of the global economy are inseparably intertwined.
Fighting the pandemic is presented as necessary for economic rebound.
Joint appeal: leaders must step up immediately to prioritise people living in emerging markets during this crisis.

Kristalina Georgieva is Managing Director of the IMF, and Dr. Tedros Adhanom Ghebreyesus is Director-General of the WHO.