RUTH SUNDERLAND: This is one of mankind’s darkest moments and we need nations to come together in a spirit of generosity
This column should be coming to you from Washington DC, where the Spring meetings of the International Monetary Fund were to be taking place, and not from the rather less thrilling venue of my kitchen table.
But the meetings are happening remotely and managing director Kristalina Georgieva is in her fifth week of working from home, juggling between three computer devices at any one time.
This, as she points out, is a crisis like no other. Never have so many of the IMF’s 189 member countries come forward asking for help at the same time.
Housebound: International Monetary Fund managing director Kristalina Georgieva is in her fifth week of working from home
Its purpose was to set up a framework after the Second World War for international economic co-operation, and to avoid a repeat of the policies that exacerbated the Great Depression of the 1930s, when countries retreated into protectionism.
Now the fund, and the resources it has to lend to countries in need, is on the front line as the world battles coronavirus.
The World Economic Outlook that will be published next week will spell out that the IMF anticipates the worst fallout since the 1930s. Only three months ago, it expected positive income growth in more than 160 of its member countries, but that has been turned on its head.
The prediction is now that more than 170 countries will plunge into negative territory. We are grimly aware of the impact on the UK economy and it is the same story around the world. Central banks have sprung into action to help boost the ability of financial systems to cope. Governments, including our own with Chancellor Rishi Sunak and his rescue package, have embarked on $8 trillion of fiscal measures, which is equivalent to 10 per cent of global GDP.
The most immediate problem faced by every country is getting health systems up to speed. It is not realistic for even the most medically conscious nation to run a health service in permanent readiness for a pandemic, so everywhere there is a scramble.
Here, it is difficult, but in many parts of the developing world it is much, much worse.
Slamming on the emergency brakes is, of course, far harder on poorer and less advanced economies, those where people live hand-to-mouth, in densely populated urban slums with scant sanitation.
And to make matters worse, emerging markets have been hit by an outflow of $100 billion of capital since the pandemic hit, as investors have fled for safer havens.
They have also been affected by the drying up of remittances, or money coming in from workers who have moved overseas sending funds back to their families. In some cases, the fall in the oil price and other commodities has compounded the woe.
Why would a reader in the UK with troubles enough of his or her own care about this? Humanity for one thing: it is Easter, after all. But self-interest too.
Coronavirus must be beaten everywhere, or it is not beaten at all. If we can get the virus under control, the IMF reckons that world economy could start to recover by the end of this year – but that is a big if.
The best chance we have of defeating the Covid-19 emergency is by acting together, but there are worrying signs that the pandemic is leading to the opposite attitude.
The US and China, already in a fractious relationship, are bandying blame. Faultlines in the European Union are on display as the Northern members have been perceived as less than supportive to Italy and Spain.
The very fact that getting on top of the virus requires us to stay at home heightens the risk of isolationism taking a psychological hold.
Easter, in the Christian calendar, is a time of great hope. Mine is that individuals and countries do not retreat into recrimination and selfishness. This is one of mankind’s darkest moments and we need nations to come together in a spirit of generosity.