Whatever it takes? The global financial safety net, Covid-19, and developing countries. (January 2021)

• Record Type: Journal Article
• Authors: Stubbs, Thomas; Kring, William; Laskaridis, Christina; Kentikelenis, Alexander; Gallagher, Kevin
• Is Part Of: World development. Volume 137(2021)
• Publication Date: 2021-01
• Subjects: Global financial safety net -- Global economic governance -- International Monetary Fund -- Regional financial arrangements -- Covid-19; Economic history -- 1990- -- Periodicals; Economic assistance -- Developing countries -- Periodicals; 330.9
• DOI: 10.1016/j.worlddev.2020.105171
• Languages: English
• ISSNs: 0305-750X

Abstract

Highlights: Developing countries require $2.5 trillion to meet immediate Covid-19 financing needs. New data on IMF and regional financial arrangement activities since pandemic onset show the global financial safety net is not meeting these needs. IMF and regional financial arrangements provided $90.11 billion in Covid-19 financing in the immediate aftermath of the crisis. Datasets available for scholars and analysts to track trends and evaluate the impact of the global financial safety net on development outcomes. Abstract: Multilateral financial institutions have pledged to do whatever it takes to enable emerging market and developing countries to fill a $2.5 trillion financing gap to combat Covid-19 and subsequent economic crises. In this article, we present new datasets to track the extent to which multilateral financial institutions are meeting these goals, and conduct a preliminary assessment of progress to date. We find that the International Monetary Fund and the principal regional financial arrangements have made relatively trivial amounts of new financing available and have been slow to disburse the financing at their disposal. As of July 31, 2020, these institutions had committed $89.56 billion in loans and $550 million in currency swaps, totaling $90.11 billion—just 12.6% of their current capacity. The new datasets allow scholars, policymakers, and civil society to continue to track these trends, and eventually examine the impact of such financing on health and development outcomes.