High Level Plenary - Remarks As Delivered

IMF News, March 23, 2021

Source details

Occasion: WTO Aid-for-Trade Stocktaking Event.
Speaker highlights the global context: "the worst recession in peacetime since the Great Depression" and signs of improving outlook due to government support and vaccine success.
Recovery characterized as uncertain and uneven, with a risk of "great divergence" within and between countries following last year's lockdown.

Main message: collective efforts to end the health crisis are essential; "vaccine policy is going to be the most important economic policy" in 2021 and possibly 2022.
Actions prioritized:
- Scale up production and distribution, especially in low-income countries through Covax.
- Reallocate excess vaccines from surplus to deficit countries.
- Remove trade barriers that limit access to vaccines and treatment.
Quantified economic impact:
- Faster progress in ending the health crisis is projected to raise global income cumulatively by US$9 trillion from 2020 to 2025.
- The US$9 trillion is split 60-40 between emerging markets and developing countries and advanced economies.
Risk highlighted: new mutations threaten progress if the pandemic is not defeated everywhere.

Data points:
- Emerging and developing countries, excluding China, are projected by 2020 to have cumulative per capita income losses as high as 22% versus 13% in advanced economies.
- Only half of the countries that were narrowing income gaps relative to advanced economies are forecast to continue doing so over 2021 to 2022.
Groups hit especially hard: low skilled, informal workers, young, and women.
Evidence of trade-related labor gains:
- In Africa, workers in export-oriented firms earn 16% more than workers in non-export-oriented rivals.
- Trade tends to reduce gender bias in wages.

Trade performance and projections (exact figures preserved):
- 9.6% decline in global trade in 2020.
- Projecting trade volumes to grow by 8.5% in 2021 and by 6.5% in 2021.
National-level policy levers to accelerate trade growth:
- Reduce import tariffs.
- Simplify customs procedures.
- Cut export duties.
- Increase transparency to inject momentum in growth.
Complementary international action:
- Reform the global trade system and resolve existing tensions to bring new momentum for trade.
Broader macro policy guidance:
- Maintain support to households and firms to avoid economic scars (long-term unemployment, fractured supply chains).
- Lay the foundation for growth anchored in medium-term fiscal sustainability: "keep the receipts but spend".
- Domestic measures: raise domestic revenues, make public spending more efficient, improve the business environment.

Trade central to structural shifts toward a green and digital economy.
Role of trade and technology:
- Exchange of goods and services and new technologies will reduce costs (e.g., renewable energy) and provide expertise (cooler buildings, drought- and flood-resilient agriculture).
Responsibility and inclusion:
- Advanced-economy investment in the green transition must be complemented so poor countries can undertake job-rich climate adaptation measures.
- Praise for the Bank leading climate adaptation in the developing world.
Digital inclusion impact (exact figures preserved):
- Expanding internet access in sub‑Saharan Africa by 10% could increase real per capita GDP growth 4%.
Mitigating uneven benefits:
- Domestic policies such as unemployment insurance, job training, and job search assistance can help workers affected by import competition or technological change.

The Fund shifted policy advice rapidly to support workers and businesses during the pandemic.
Lending and support statistics (exact figures preserved):
- The IMF lent to 52 low-income countries.
- Total IMF financing has reached over $107 billion.
Special Drawing Rights (SDRs): the Fund is prepared to focus on the opportunity for SDRs to lift up reserves of countries; final decision rests with shareholders.

Prioritize ending the health crisis through scale-up of vaccine production, distribution, and reallocations, and by removing trade barriers to medical goods.
Use trade openness to drive inclusive growth and poverty reduction, and to support women's economic participation.
Maintain targeted fiscal support now while planning for medium-term fiscal sustainability.
Implement national reforms to boost trade: lower tariffs, simplify customs, cut export duties, and enhance transparency.
Support green and digital transitions with trade, technology transfer, and investments that include low-income countries.
Strengthen social safety nets and active labor market policies (unemployment insurance, job training, job search assistance) to ease structural adjustment.

High Level Plenary - Remarks As Delivered, March 23, 2021.