The policy-setting body of the International Monetary Fund (IMF) on Thursday warned of a highly uncertain and uneven global economic recovery, pledging to strengthen international cooperation on vaccines.
"The prospects for recovery are highly uncertain and uneven within and across countries due to varying policy space, different economic structures and rigidities, preexisting vulnerabilities, and uneven access to vaccines," the International Monetary and Financial Committee (IMFC) said in a communique during the virtual spring meetings of the IMF and the World Bank.
"Elevated financial vulnerabilities could pose risks, should global financial conditions tighten swiftly. The crisis may cause extended scarring and exacerbate poverty and inequalities, while climate change and other shared challenges are becoming more pressing," the communique said.
The IMFC stressed the need for "strong international cooperation" to accelerate vaccine production and support affordable and equitable distribution to all.
"To that end, we continue to support the work of the World Health Organization, the ACT Accelerator collaboration, and its COVAX Facility," the IMFC said.
The IMFC also called on the IMF to make a comprehensive proposal on a new Special Drawing Rights (SDR) general allocation of 650 billion U.S. dollars to help meet the long-term global need to supplement reserves.
IMF Managing Director Kristalina Georgieva said Thursday at a press conference that all IMFC members had expressed support for the SDR proposal and multilateral approaches to strengthen the global economy.
"In today's meeting, a number of our members called it historic. Indeed, this is the largest boost to reserves that our membership is giving us a mandate to follow up on," Georgieva said, adding it will provide a substantial liquidity boost to all IMF members, especially the most vulnerable.
"And the innovation we are pursuing is for some of our better-off members to be able to allocate their SDRs for the common purpose of bringing the more vulnerable members to a sounder position. We need a recovery that works for all," she said.
Created by the IMF in 1969, the SDR is an international reserve asset to supplement members' official reserves. It can be exchanged among governments for freely usable currency in times of need.