The Managing Director of the International Monetary Fund (IMF) Ms. Kristalina Georgieva on Wednesday quoted Thomas Stearns Eliot, a 20th century poet, essayist, publisher, playwright, literary critic and editor to capture these “exceptional times” caused by the novel coronavirus and recommended the world should meet the challenge with “exceptional action”.
“As we start these meetings, I thought about the words of T.S. Eliot, who said: “April is the cruelest month.” Indeed, while Spring is underway, while nature is reawakening, humanity is facing one of its darkest periods in living memory,” Ms. Georgieva said in opening remarks at the virtual 2020 Spring Meetings.
As one of the biggest international gatherings in Washington D.C., the seat of power in the United States, the Spring Meetings have always been a platform to experience diversity, plurality of opinions, faces, cultures, religions. They often bring a lot of money as well to the local economy. Not this year. At least, not now.
COVID-19, the respiratory disease caused by the novel coronavirus, has triggered lockdowns and shutdowns and completely crumbled the local economies from across the world. Streets are empty in Paris, restaurants shut in Lagos, clubs are noiseless in Rome, stadia, parks, classrooms, office spaces and everywhere else are greeted by silence, fear, shocking uncertainty.
Literary icons, for decades, have understood, misunderstood, agreed and disagreed with T.S. Eliot’s first seven lines of the first stanza:
APRIL is the cruellest month, breeding
Lilacs out of the dead land, mixing
Memory and desire, stirring
Dull roots with spring rain.
Winter kept us warm, covering
Earth in forgetful snow, feeding
A little life with dried tubers.
In the northern hemisphere, April is classically associated with spring when flowers and mild weather and sex and love in the air. How then can April be the cruelest month.
But, this April, the immortal words of T.S. Eliot, who was born in St. Louis, Missouri, to a prominent Boston Brahmin family, before moving to England in 1914 at the age of 25, where he settled, worked and married and died on January 4, 1965, are certainly true.
More people have died this month alone from COVID-19 than any other disease within that short period of time going back to 1918 when the Spanish flu killed close to 750,000 people in the United States.
“Covid-19 is causing tragic loss of life; and the measures needed to fight it have turned our world upside down—affecting billions of people and stopping economies in their tracks,” Ms. Georgieva lamented. It is, she said, “a crisis like no other.”
“We anticipate the worst economic downturn since the Great Depression. While there is tremendous uncertainty around the forecast, we project global growth to fall to-3 percent this year. And we project a partial recovery in 2021, with growth expected at 5.8 per cent,” she said.
“That is our baseline scenario. We know that it could get much worse depending on many variable factors, including the depth and duration of the pandemic. We also know that, despite the extraordinary uncertainty, we can chart a path forward,” she added.
Ms. Georgieva listed three priority to overcome the crisis: “First—protect lives . The fact is that you cannot have a healthy economy without a healthy population. This means continuing with essential containment measures and prioritizing health spending. It also means refraining from export controls on medical supplies and food.
“Second—protect livelihoods . We must prevent liquidity pressures from turning into solvency problems. This is about creating lifelines for households and businesses, from cash transfers to credit guarantees and adjustments to loan terms. Protecting livelihoods also requires a financial system that continues to function under pressure. Here, monetary stimulus and liquidity facilities play an indispensable role.
“Third—plan for recovery . We must reduce the risk of irreversible economic scarring through policy action now. In time, as the global economy stabilizes, coordinated fiscal stimulus will be needed to boost demand and restore growth. For its part, the IMF will support its member countries as they confront the post-crisis challenges, including debt vulnerabilities, bankruptcies, unemployment, and economic inequality,” she said.
In all these priority areas, countries with limited resources will need more support, she added.
“Many emerging markets and low-income nations have weaker health systems to begin with. They are facing record-high portfolio outflows—more than $100 billion in just the past two months. Many can cover only a portion of their external financing needs, which are estimated to be in the trillions of dollars; and some may face an unsustainable debt burden.
“The encouraging news is that so many countries have deployed extraordinary policy measures—including fiscal actions amounting to about $8 trillion and liquidity injections by central banks amounting to over $6 trillion. And yes, there has been substantial coordination. But given the gravity of the crisis, significant further efforts will be needed,” Ms. Georgieva said.
She called on the international community to step up efforts to help the most vulnerable countries by providing increased funding as well as debt service relief—thereby creating space for spending on urgent health needs and mitigating the economic impact of the crisis.
She said the IMF, with $1 trillion in lending capacity, is responding to an unprecedented number of calls for emergency financing—from more than 100 countries.
“We have just doubled access to our emergency facilities, which will allow us to meet the expected demand of about $100 billion in financing. Lending programs have already been approved at record speed for over 20 countries, with many more to come,” she said.
“We have revamped our Catastrophe Containment and Relief Trust to provide immediate debt relief on IMF obligations to low-income countries affected by the crisis. Our Executive Board has just approved assistance to 25countries.
“We are now working with donors to almost triple the CCRT from $500 million to $1.4 billion to extend the duration of relief. And together with the G20,the World Bank and many others, we are calling for a standstill of debt service to official bilateral creditors for the world’s poorest countries,” Ms. Georgieva added, before concluding, “this too shall pass“.
“In this time of crisis, we must remember that this too shall pass. We will get through this. How well and quickly we get through it depends on us acting now—and acting together.”
Simon Ateba is a journalist based in Washington, District of Columbia.