World Bank Current Affairs - 2020

G20 countries pledge 21 billion USD to fight COVID-19

On June 6, 2020, the G20 countries pledged over 21 billion USD to fight against COVID-19. The countries have so far injected 5 trillion USD in March 2020 to help fight global economic crisis.

The 21 billion USD commitment was made only by the invited members.

Highlights

The G20 countries had already injected 5 trillion USD into the global economy in order to help their members take steps in targeted fiscal policies, guarantee schemes, economic measures and counteract economic, social and financial impacts of the pandemic.

The G20 members had also asked the International Monetary Fund and World Bank to support the countries that are in need of instruments required in the fight of COVID-19.

Funds

The 21 billion USD funds allocated is to be used in research and development, vaccines, therapeutics and diagnostics. In April, 2020, the G20 called on the NGOs, philanthropies and private sectors and estimated that 8 billion USD is required to close the financial gap in the combat of COVID-19.

G20

It is to be noted that when the G20 leaders met in March 2020, they framed a global response to fight COVID-19 and adopt measures to safeguard global economy. They also planned to minimise trade disruption by enhancing global cooperation.

Global Economic Prospects Report, 2020 by World Bank

The World Bank recently launched the Global Economic Prospects Report, 2020. The report highlighted the impact of COVID-19 on countries.

Key findings of the report

The report says that the Emerging Market and the Developing Economies are highly vulnerable. They face health crisis, external shocks, restrictions, tourism, falling trade, capital outflows and commodity prices. These countries according to the report are expected to have 3% to 8% output loss.

Around 60 million people may be pushed to extreme poverty due to COVID-19 this year. The financial crisis due to recession will reduce the potential output by almost 8%.

Recommendations

The report makes the following recommendations

  • The report suggests to make better policy choices. It includes greater debt transparency, major expansion of cash safety and faster advances in digital connectivity.
  • Along with addressing health emergencies, policies to boost long term boost should also be considered. This includes improving environment for business, enhancing outcomes of education and improving governance.