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Is Collective and Innovative Action the only Hope to Defeat COVID-19?

Is Collective and Innovative Action the only Hope to Defeat COVID-19?

The world is undergoing unprecedented trials and challenges due to COVID-19 that is on its way to obliterate the development gains of many countries. The pandemic has enormously impacted human capital including lives, livelihoods, basic survival, and productivity. The outbreak has also gravely stiffened the conditions of external financing for countries across the ambit of income, disturbing trade, flows of investment, and supply chains. The hope or solution now lies with multilateral cooperation and collaboration to control the pandemic and alleviate its health, economic, and social repercussions.

Plan of Action: World Bank Group and International Monetary Fund 

The Development Committee of the World Bank and the International Monetary Fund conducted an online meeting representing 189 member countries, observed that the Bank Group is distinctively placed to cope up with these complicated issues and obliged to play a significant role with responses entailing investments, lending, knowledge and summoning capacity. The pandemic calls for innovative and collective action and thus, the committee motivated the IMF and the Bank Group to keep lending helping hand to all country clients, in collaboration with the agencies of UN, bilateral partners, and international financial institutions.

Support to IDA Countries 

In the meeting, David R. Malpass (World Bank Group President) propagated a quick and resilient move to strengthen the system in order to prevent the development gains of recent years. He also stated that although the virus’s shock is worldwide, the crisis will most probably impact the poorest and the most vulnerable countries and their population the hardest.

With putting a major emphasis on swift and wide action, it was also asserted that the Bank Group’s COVID-19 programs are in progress in 64 developing countries and the target is to reach 100 countries by the end of April.

Through the joint efforts of the World Bank, IFC, and MIGA, three main objectives were delineated:

  • Protection of the poorest and the most vulnerable households
  • Providing support to businesses to reduce unemployment
  • Helping developing countries carry out emergency health operations and intensify economic buoyancy.

 

Teamwork and Cooperation – Ultimate Solution 

With member countries’ support, the Bank Group finds itself in a better position to help countries fight COVID-19. It has the capability to provide $160 billion of financing in the coming 15 months, including $50 billion in the form of grants and highly concessional credit from IDA which will be given to the poorest countries.

One of the topmost priorities is to create the standards of transparency to monitor the massive outflow of capital and to make the investment and debt more productive. Several challenging steps are required to enable debt transparency and to enhance investment quality. Few of the challenging steps are given below:

  • The revelation of payment schedules and loan contract terms
  • Complete disclosure of the stock of publicly ensured debt, debt-like instruments, and SOE liabilities.
  • Transparent data reporting by borrowers
  • Prudent and effective use of liens and collateral in sovereign borrowing.
  • No violation between lenders and borrowers on grounds of legal requirements

 

The committee also looks forward to the support of private creditors. The plan is also being made to evaluate the debt-challenges of the countries with middle-income and finding out solutions for debt and fiscal stress through a case-by-case basis. The repeated stress was laid upon rapid action so that the time of recovery can be reduced and the foundation for growth and higher living standard could be established for all.

Conclusion

On top of everything, the immediate retaliation to COVID-19 indicates the Bank Group’s prolonged commitment and conviction to help all the developing countries tackle poverty, increase prosperity, and effectively attain their development goals. And the only way out that right now seems relevant is collective action and teamwork.