COVID-19 crisis exacerbates globalization worries: IMF economist
WASHINGTON, United States — Globalization has been under fire around the world, but the coronavirus pandemic has added fuel to those concerns, IMF chief economist Gita Gopinath said on Wednesday.
Speaking in an interview with AFP, she urged countries to work to improve the system, and to continue to support the recovery from the economic crisis COVID-19 has created:
How concerned are you about the signs of a backlash against globalization?
"Even before this crisis hit, we saw a serious questioning of globalization and its benefits. And we also saw rising trade tensions.
Now this crisis has probably exacerbated some of that.
But it's very important for countries to work together, and we have been calling explicitly for not putting export restrictions on, for instance, medical supplies and medical goods, because this is the time when the world as a whole needs it. They have to be collaborative and have to work together.
The system is not perfect, the multilateral trading system needs improvement and countries should work together to improve that... Going backwards, and moving your production inwards is not a good strategy for growth and not a good strategy for alleviating poverty around the world."
What is the best strategy for governments to avoid long-term damage to their economies?
"This crisis has been different in terms of policy response compared to the Great Recession. The support has been fast, it's been substantial, it's been targeted and that has absolutely helped, and I believe policymakers have the appetite to do whatever it takes.
If we didn't do that at this point, we will be setting ourselves up for a much worse recovery.
But going forward, it'll have to be that you have to build a job-rich recovery for the global economy. Some of it will require providing hiring subsidies to firms to be able to hire those people who otherwise would be long-term unemployed.
Our view is that policymakers will need to adapt as the situation evolves. You cannot withdraw support too quickly. More will likely be needed, because this crisis is not over and it's going forward."
How do you see prospects for the United States given reports of a resurgence of cases in some states?
"The biggest hit is going to be in the second quarter, and after that we expect to see recoveries. We've already seen some recovery is taking place in some sectors, though it's highly uneven, and we expect the recovery to be gradual. So, even by the end of 2021, our projection is for the level of GDP to be below what it was in 2019.
In our baseline, we have allowed for the fact that there will be a possible increase in the number of cases, but not a second big wave. If that were to happen, and that would be true for any country in the world, that would be a major risk.
The US has done substantial and unprecedented support and this has come both from fiscal policy and monetary policy, so they've done a lot. And that has been very helpful. This has succeeded in helping people with their livelihoods and also preventing wide-scale bankruptcies. So both of those should absolutely help with the recovery going forward."
Follow this page for updates on a mysterious pneumonia outbreak that has struck dozens of people in China.
New Zealand Prime Minister Chris Hipkins says on Sunday that he had contracted COVID-19, testing positive at a key point in his flailing campaign for re-election.
Hipkins saYS on his official social media feed that he would need to isolate for up to five days -- less than two weeks before his country's general election.
The leader of the centre-left Labour Party said he started to experience cold symptoms on Saturday and had cancelled most of his weekend engagements. — AFP
The World Health Organization and US health authorities say Friday they are closely monitoring a new variant of COVID-19, although the potential impact of BA.2.86 is currently unknown.
The WHO classified the new variant as one under surveillance "due to the large number (more than 30) of spike gene mutations it carries", it wrote in a bulletin about the pandemic late Thursday.
So far, the variant has only been detected in Israel, Denmark and the United States. — AFP
The World Health Organization says on Friday that the number of new COVID-19 cases reported worldwide rose by 80% in the last month, days after designating a new "variant of interest".
The WHO declared in May that Covid is no longer a global health emergency, but has warned that the virus will continue to circulate and mutate, causing occasional spikes in infections, hospitalisations and deaths.
In its weekly update, the UN agency said that nations reported nearly 1.5 million new cases from July 10 to August 6, an 80% increase compared to the previous 28 days. — AFP
The head of US intelligence says that there was no evidence that the COVID-19 virus was created in the Chinese government's Wuhan research lab.
In a declassified report, the Office of the Director of National Intelligence (ODNI) says they had no information backing recent claims that three scientists at the lab were some of the very first infected with COVID-19 and may have created the virus themselves.
Drawing on intelligence collected by various member agencies of the US intelligence community (IC), the ODNI report says some scientists at the Wuhan lab had done genetic engineering of coronaviruses similar to COVID-19. — AFP
Boris Johnson deliberately misled MPs over Covid lockdown-breaking parties in Downing Street when he was prime minister, a UK parliament committee ruled on Thursday.
The cross-party Privileges Committee said Johnson, 58, would have been suspended as an MP for 90 days for "repeated contempts (of parliament) and for seeking to undermine the parliamentary process".
But he avoided any formal sanction by his peers in the House of Commons by resigning as an MP last week.
In his resignation statement last Friday, Johnson pre-empted publication of the committee's conclusions, claiming a political stitch-up, even though the body has a majority from his own party.
He was unrepentant again on Thursday, accusing the committee of being "anti-democratic... to bring about what is intended to be the final knife-thrust in a protracted political assassination".
Calling it "beneath contempt", he said it was "for the people of this to decide who sits in parliament, not Harriet Harman", the veteran opposition Labour MP who chaired the seven-person committee. — AFP
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