With the coronavirus pandemic challenging the wellbeing of people and countries around the world, global financial institutions face the tremendous task of coordinating economic policies and offering relief for the most vulnerable countries. Such effort will be on display this week, as the International Monetary Fund and the World Bank hold their annual spring meetings.
Kaushik Basu, professor of economics at Cornell University and former Chief Economist at the World Bank, says that the meetings will offer a chance to go beyond ceremony and offer urgently needed guidelines to balance saving lives and promoting the economy:
“The spring and annual meetings of the World Bank have become landmark global gatherings to discuss multilateral policy. Starting with the inaugural meeting in Savannah, Georgia, in 1946, these meetings have been held all over the world – from London in 1947 to Washington, D.C., last year. This is the first year that it will be held nowhere in particular. Thanks to COVID-19, it will be a virtual meeting. Nevertheless, this will be one of the most keenly watched Spring Meetings, not for the routine speeches and decisions but for ideas.
“Sitting in my lockdown in Mumbai – I was in India for some meetings when the lockdown happened – what worries me most is that nations are floundering in terms of policy. We have had great depressions and great recessions but never a ‘great whiplash’ of the magnitude as created by this pandemic.
“The challenge is to strike the right balance between the stringency of the lockdown to control the virus, and space for economic activity and trade. It is wrong to think of this as a tussle between saving lives and promoting the economy. A floundering economy can cause huge losses in lives, especially in developing economies. What is urgently needed are some guidelines for striking the right balance. I know from my own four years at the World Bank, these institutions have a staggering amount of expertise and talent. It will be a great service to the world, especially developing economies, if the Spring Meetings go beyond ceremony to offer a prospectus on how to navigate the pandemic.”
Photo: Simone D. McCourtie / World Bank CC
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