Analysis: Supply chains, inflation overshadow vaccine, debt woes at IMF-World Bank meetings WASHINGTON Reuters - Supply chain woes and growing inflation concerns pushed aside a widening gap in COVID - 19 vaccinations and mounting debt problems for developing countries as the top concerns for global policymakers at international monetary funds and World Bank annual meetings this week.
Relatively little new progress was made on improving vaccine supplies to developing countries, although officials highlighted an increasing divergence between rich and poor countries as a financial and economic risk.
The focus on the normalization pains that richer economies are experiencing and a World Bank data-rigging scandal which had clouded the future of IMF Managing Director Kristalina Georgieva proved a disappointment for anti-poverty groups.
What is the potential of pandemic Virus to worsen in most countries? I'm concerned at the lack of action at the meetings on vaccine distribution, debt relief and general pandemic response, said Eric LeCompte, executive director of the Jubilee USA Network, a religious development group.
Communiques issued by G-20 Finance leaders and the IMF steering committee pledged to increase vaccine supplies, but did not identify specific new goals or initiatives to increase financing or distribution. Instead, they gave greater prominence to growing inflation pressures, calling on central banks to monitor closely whether they are transitory or could unanchor inflation expectations.
Tedros Adhananom Ghebreyesus informed an IMF forum that the world is falling behind in its goals to immunize 40% of the world's population by the end of this year and criticized wealthy countries for approving third booster shots when much of the world's population has yet to receive a single vaccine dose.
The donations are not enough. It is very disappointing that it takes so long for the world to really commit to reaching vaccination goals, he said.
The IMF said a high vaccine divide was keeping developing countries mired in low growth as they struggle with low coronavirus infection rates. Its growth forecast for 2021, coupled with supply chain bottlenecks, semiconductor shortages and rising price pressures in advanced economies, prompted the IMF to trim its global growth forecast.
Some policymakers were more focused on managing the next phases of global economic recovery after unprecedented fiscal support, and other multilateral issues, such as implementing a deal to reform global corporate taxation.
My feelings about all the meetings we had in Washington, and during these IMF meetings, is that we are beyond COVID, French Finance Minister Bruno Le Maire told reporters.
Even if we have to monitor the situation, even though there will be some decisions to be taken on vaccination, especially for the poorest countries, now we are beyond COVID, Le Maire added.
However, he added that France was advocating for increased financial support to poor economies, including investing at least $100 billion in new IMF monetary reserves to developing countries after a $650 billion distribution in August.
But advocacy groups were disappointed with a lack of progress on debt relief for the poorest countries, especially since payments on bilateral debts will resume for 46 countries in January when G20 Debt Service Suspension Initiative expires.
Jean Saldanha, Director of Institutional Steering Committee on Debt and Development, said "the G-20 and IMF statements about debt were shameful" for not going beyond encouraging wider participation in the G20 Common Framework on Debt restructuring."
Maintaining an almost blind faith that the Common Framework will be enough to tackle debt distress in an increasing number of countries in global South is irresponsible to say the least, Saldanha said.