The Banking Executive Magazine - April 2021

World Bank/IMF Spring Meetings 2021 tems and severely hit the economies of developing countries, which have had limited policy space to respond. Millions of people have fallen into extreme poverty, and food insecurity has risen starkly especially in the poorest countries and those living in fragile and conflict-affected situa- tions. Our urgent priorities are to contain the pandemic, for which scaling up vaccinations will be cru- cial, and rebuild our economies to avoid a lost decade of development and a major decline in people’s well- being. 2. At this critical juncture, interna- tional cooperation is essential to se- cure a better recovery for all countries and promote a strong pace of global convergence of per capita income levels between advanced and developing countries. We will continue to respond with exceptional policy measures, as long as needed and as national circumstances allow it, in order to support economic ac- tivity to protect jobs and incomes, provide social protection especially to vulnerable populations, strengthen health systems, accelerate digitaliza- tion and maintain financial re- silience. Large stimulus packages in advanced countries cushioned the global impact of the pandemic, and we encourage them not to withdraw support prematurely. International assistance for developing countries, however, has fallen short of their es- timated $2.5 trillion in additional fi- nancing needs. We call on the ifis, especially the imf and the world bank, in coordination with the inter- national community to ensure the availability, to the fullest extent pos- sible, of the necessary liquidity and fiscal support for all developing countries. Concessional financing and ensuring positive net transfers should be essential parts of the global financial response to avoid prolonged damage to development prospects of low-income countries (lics) and small vulnerable states. It is crucial for all major economies to work together and use all policy tools available to foster an environ- ment of increased trade and in- vestors’ confidence to boost invest- ment growth for all countries. 3. Early availability of, and equitable access to, affordable vaccines every- where is the most critical public good at this juncture. It is essential to contain the pandemic and secure a broad-based global recovery. We call on advanced countries to boost fi- nancing for the covax facility to help more low- and middle-income coun- tries obtain fair and rapid access to affordable vaccines and move to- ward patent liberalization for covid- 19 vaccines to boost global production. We welcome the african union’s vaccine program that pro- cures vaccines to supplement those acquired through the covax facility. Multilateral development banks (mdbs) must also play an important role in financing and delivering vac- cines and support efforts to enable vaccine manufacturing in developing countries. We call on mdbs to en- hance international cooperation and uniformly adopt the covax vaccine criteria or the world health organiza- tion (who) Emergency use list. At this time, de- veloping countries’ access to vac- cines is constrained by existing supply, which has mostly been pur- chased by advanced economies. We call on the world trade organization and mdbs to seek solutions to scale up the production of vaccines, in- cluding addressing intellectual prop- erty rules to expand the manufacturing of vaccines and other medical products to effectively deal with the covid-19 pandemic. 4. We reiterate the importance of a strong global financial safety net, with an adequately resourced, quota- based imf at its center. We welcome the stronger support in the imf’s ex- ecutive board for a meaningful new allocation of special drawing rights (sdrs) to address long-term global liq- uidity needs. This must be made alongside commitments from mem- bers with strong external positions to voluntarily channel their sdrs, in- cluding from the new allocation, to benefit countries in need of liquidity support in these exceptional times. Recycling mechanisms that boost imf’s lending capacity will enable the fund to increase access limits for bor- rowers and provide additional sup- port to low- and middle-income countries. Going forward, the imf should take steps to modernize and enhance the impact of sdrs, includ- ing considering a more equitable and just way to allocate sdrs across coun- tries to take account of demand. We urge the imf to ensure utilization of sdrs in a transparent and accountable manner. We further urge the imf to ensure the timely completion of the 16th general review of quotas by end-2023, and look forward to in- creased quota resources, reduced re- liance on borrowed resources and the implementation of long-awaited governance reforms to increase the quota share of emerging markets and developing countries while protect- ing the shares of the poorest coun- tries. 5. We commend the swift response of the imf to support its member countries since the onset of the pan- demic. Going forward, it is important for the imf to flexibly adapt its lend- ing toolkit to the evolving needs of low- and middle-income countries during their recovery. We draw atten- tion to the role of precautionary fi- nancing instruments in helping eligible countries deal with tail exter- nal risks. Since this is the year for the imf to review its access limits as well as its surcharge policy, we urge the fund to correct the regressive and pro-cyclical character of the sur- charge policy and consider specific measures, such as suspending sur- charges at this time to help countries’ economic recovery. We encourage the imf to further consider a signifi- cant permanent reduction in sur- charges or their elimination. In addition to seeking new donor re- sources, we encourage the fund to explore non-traditional and pre- dictable funding options to boost the the BANKING EXECUTIVE 26 ISSUE 148 APRIL 2021