## A New Agenda for Macro Stability

_IMF News, September 21, 2021_

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**Canonical URL:** [A New Agenda for Macro Stability](https://www.imf.org/en/news/articles/2021/09/21/sp092121-a-new-agenda-for-macro-stability-dmd-sayeh)

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## Bibliographic details
- Authors: Deputy Managing Director Antoinette M. Sayeh September
- Published: September 21, 2021

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### Global outlook and divergence
- Global economy is on a path to recovery and "on sounder footing" than a year ago, but the recovery is creating a growing divergence between advanced economies and many emerging and developing economies.
- Main drivers of divergence:
  - Unequal access to vaccines:
    - "Close to 40 percent of the population in advanced economies is fully vaccinated."
    - "In emerging markets, that number is 11 percent – and in low-income countries, a tiny fraction."
  - Unequal resources to support the recovery:
    - "Sizable fiscal support in advanced economies – with $4.6 trillion of pandemic related measures available in 2021 and beyond."
    - "In other economies, most support measures expired in 2020 due to limited fiscal space."
- Risks highlighted:
  - "Extreme poverty is set to rise for the first time in 20 years."
  - "The emergence of even more infectious virus variants could further wipe out trillions from global GDP by 2025."
  - A "double blow" to many emerging and developing economies if the pandemic worsens while advanced economies normalize monetary policy faster than expected and financial conditions tighten.

### IMF response to the pandemic
- Scale and reach of IMF support since the start of the pandemic:
  - "The IMF has provided over $118 billion in financing to 87 countries, including 54 low-income countries."
  - "Our support to Sub-Saharan Africa, in particular, has increased dramatically – reaching 13 times that of our annual average last year."
  - "We provided policy advice and capacity development support to over 175 countries during the crisis."
- Debt relief and liquidity measures:
  - "The IMF extended direct debt service relief to 29 of our poorest, most vulnerable member countries."
  - Supported the G20’s DSSI and Common Framework initiatives.
  - "Last month, the IMF made the largest allocation of Special Drawing Rights in its history—about US$650 billion—injecting additional liquidity to the global economic system."
  - Encouragement of voluntary channeling of some SDRs from countries with strong external positions to those most in need.
- Characterization: "Never in our history have we done so much, so fast – reached out to so many countries in such a short period of time."

### Vaccine policy as first priority
- Urgent collective action to close vaccine access gaps is the top priority for durable and equitable recovery.
- IMF staff proposal and targets:
  - "IMF staff recently outlined a $50 billion plan that sets a goal of vaccinating at least 40 percent of the population in every country by the end of this year and at least 60 percent by mid-next year."
  - "Faster access to vaccinations for high‑risk populations could potentially save more than half a million lives in the next six months alone."
- Economic rationale:
  - Vaccination investment could "lead to trillions of dollars in economic growth driven by accelerated recovery."
  - "Vaccine policy today is the most urgent and important economic policy."

### Building a resilient and sustainable global economy
- Long-term imperatives for macro stability:
  - Strengthen public finances via better revenue mobilization and expenditure management.
  - Modernize financial systems, advance macroeconomic frameworks, and improve governance.
  - Expand access to basic public services—healthcare, education, and infrastructure—and protect vulnerable populations from income shocks.
  - Advance digital economy policies (e-commerce, e-learning, e-government) and invest in human capital and high-quality education to spread benefits of technology more widely.
- Gender-inclusive policies:
  - "IMF studies show that closing the gender gap in countries with very low female labor force participation could increase GDP by an average of 35 percent in level terms."
  - Conclusion: "Policies that are good for women are also good for economic growth."
- Climate and green transition:
  - Carbon pricing targets and proposal:
    - "Today, carbon is priced at $3 a ton—globally—we have to reach $75 a ton by 2030."
    - IMF staff proposal of a carbon price floor for big emitters to make this action possible.
  - Green investment and growth:
    - "Decarbonizing our economies will also require a substantial scaling-up of green investment over the next two decades."
    - "Research by IMF staff shows how deficit-financed green supply policies could raise global GDP by about 2 percent this decade and create millions of new jobs."
  - Just transition principles:
    - Support workers moving from shrinking to expanding sectors.
    - Support countries balancing increasing energy access and reducing carbon footprints, and those facing high adaptation costs with limited resources.

### Policy priorities and recommendations (summary)
- Immediate:
  - Close vaccine access gap globally (vaccinate at least 40 percent of every country by end of this year; 60 percent by mid-next year).
  - Encourage voluntary SDR channeling to countries most in need.
- Medium and long term:
  - Strengthen public finances: revenue mobilization and expenditure management.
  - Modernize financial systems and macro frameworks; improve governance.
  - Expand access to healthcare, education, infrastructure; protect vulnerable groups.
  - Promote digitalization, invest in human capital, and advance gender-inclusive policies to boost growth (noting a potential 35 percent GDP uplift in affected countries).
  - Implement robust carbon pricing (from $3 a ton globally to $75 a ton by 2030) and scale up green investment; design policies to ensure a just transition.

### Key statistics and figures (verbatim)
- "190 countries"
- "over the last 18 months"
- "close to 40 percent" (advanced economies fully vaccinated)
- "11 percent" (emerging markets fully vaccinated)
- "Extreme poverty is set to rise for the first time in 20 years."
- "$4.6 trillion of pandemic related measures available in 2021 and beyond"
- "most support measures expired in 2020"
- "over $118 billion in financing to 87 countries, including 54 low-income countries"
- "13 times that of our annual average last year" (support to Sub-Saharan Africa)
- "policy advice and capacity development support to over 175 countries"
- "direct debt service relief to 29" countries
- "about US$650 billion" (SDR allocation)
- "$50 billion plan"
- "vaccinating at least 40 percent of the population in every country by the end of this year and at least 60 percent by mid-next year"
- "save more than half a million lives in the next six months alone"
- "closing the gender gap ... could increase GDP by an average of 35 percent in level terms"
- "carbon is priced at $3 a ton—globally—we have to reach $75 a ton by 2030"
- "raise global GDP by about 2 percent this decade" (deficit-financed green supply policies)

*Source: Opening Remarks at the Harvard Growth Lab’s Development Talk by Deputy Managing Director Antoinette M. Sayeh, "A New Agenda for Macro Stability", September 21, 2021.*

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## References

- [https://www.imf.org/en/about/senior-officials/bios/antoinette-monsio-sayeh](https://www.imf.org/en/about/senior-officials/bios/antoinette-monsio-sayeh)
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_Source: https://www.imf.org/en/news/articles/2021/09/21/sp092121-a-new-agenda-for-macro-stability-dmd-sayeh_