ūüďö Weekend Read: 2021 Priorities | Virus and Vaccines | Middle East Governance | Denmark's Green Vision | Digital Money | Jobs of Tomorrow

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IMF Weekend Read
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Dear Colleague,

ūüď£ Welcome to 2021 and the first Weekend Read of the new year! This will be a consequential year for the global economy, and we want to hear more from you, our readers, on issues covered here and beyond. Keep an eye on this space for periodic questions and stay tuned for more original content in the coming year.

On that note, we are now planning the 2021 Spring Meetings and would like your input as we craft the agenda of topics and speakers. Who would you like the world to hear from and on what topic? Heads of state, ministers, business executives, civil society leaders, global activists and beyond are all welcome. Please write to Rahim Kanani (rkanani@imf.org) directly with your ideas!

In today's edition we hear about three key priorities for 2021, how recovery in the near term will be a race between the virus and vaccines, improving governance and fighting corruption in the Middle East and North Africa, Denmark's green vision, and the legal standing of digital currency. Let's dive right in.

THREE PRIORITIES FOR 2021

IMF Managing Director Kristalina Georgieva has laid out three key priorities for the year: Pursue a durable exit from the crisis, ensure a sustainable and inclusive recovery, and halt and reverse a growing divergence between rich and poor countries.

"We are still faced with tremendous uncertainties about the exit from the health crisis and we do have a difficult period ahead. There is scarring from [it] we are yet to address. And inequalities within and across countries are on the rise. We also have incredible opportunities for structural transformation that we need to absolutely pursue," she said in a media roundtable this week.

An enduring recovery: On the first priority, Georgieva cautioned that vaccination of the global population will be an uneven process. International cooperation will be necessary, including full funding of COVAX, a global initiative to ensure fair and equitable access to COVID-19 vaccines. 

"The number that I always flag, and I want to repeat it, is 9 trillion dollars," Georgieva said. "This is what we can gain between now and 2025 if we accelerate vaccination across the world. Of this, 60 percent would go to low income countries and emerging markets and 40 percent would go to advanced economies."

Sustainable and inclusive policies: A sustainable and inclusive recovery will require coordinated fiscal stimulus aimed at green and digital investment. Another important effort toward this goal will involve helping countries reduce high debt burdens and cope with volatile capital flows.

"We will continue to make the case for sustained policy support until the recovery is firmly underway, and a gradual move to more targeted assistance for the most vulnerable," she said. "We will also work with our members on the concept of resilient economies, accelerating the transition to the new digital and climate economy."

Halting divergence: Advanced economies have been able to deploy the equivalent of 20 percent of GDP in fiscal support. For low-income countries, fiscal support has only reached the equivalent of 2 percent of GDP. This disparity threatens to widen the gap even further. 

Two important actions on this front will involve pressing private and public lenders to engage in debt restructuring when necessary and to provide more grants and concessional financing, especially in the areas of digital infrastructure and climate resilience.

Read the full transcript of the MD's roundtable here.

HAPPENING TODAY: RUSSIA AND THE WORLD AFTER THE PANDEMIC

IMF Managing Director Kristalina Georgieva will join Vladimir Mau, Rector of the Russian Presidential Academy of National Economy and Public Administration, for a one-on-one conversation at the 2021 Gaidar Forum. The event starts at 9 a.m. EST.

To watch the livestream in English click here.  

Click here to watch live in Russian on the IMF's new Russian Facebook page.  

A RACE BETWEEN VIRUS AND VACCINES

IMF Chief Economist Gita Gopinath highlighted the uneven rollout of the vaccine as a threat to recovery. She stressed that the COVAX initiative remains underfunded and the need for international cooperation on vaccine distribution.

"As we're seeing around the world, there are new variants of the virus coming up," Gopinath said last week on Yahoo! Finance. "And so if we don't control the virus in any part of the world, I think every part of the world is susceptible to this pandemic for much longer."

Looking ahead: The IMF will release its World Economic Outlook update on January 26. You'll have to wait for specifics until the report is released later this month, but Gopinath offered some general guidance on what is projected for 2021. In the near term, it will be "a race between the virus and the vaccines."

"We'll have the numbers out on the 26th. What you will see is very differential speeds of getting back to the pre-COVID levels, even within the advanced economy group," she said during a separate appearance on CNBC.

IMPROVING GOVERNANCE AND FIGHTING CORRUPTION

How can strong governance of economic institutions curb corruption? What reforms can be undertaken to promote inclusive growth and ensure government spending is reaching those who need it, especially against the backdrop of COVID-19? And what is the role of digitalization in facilitating these efforts?

Watch a distinguished panel, moderated by CNN International’s Eleni Giokos and featuring the IMF Middle East and Central Asia Director Jihad Azour, the United Nations Development Programme’s Mourad Wahba, Oxford University’s Adeel Malik, and Dima Jweihan from the International Center for Not-For-Profit Law, to hear more about these issues and more.

The event accompanied the release of an IMF departmental paper examining economic governance reforms to support inclusive growth in the Middle East, North Africa, and Central Asia.

‚ÄúI don't see a one size fits all for the region, but I see a number of good practices that have been tested and proven to be useful that the region can benefit from," Azour said, adding that "the COVID-19 crisis has accelerated a trend that existed before‚ÄĒwe are now in the digital age. And there are, to me, three plusses [and] one minus."

Watch the full webinar to hear about how digitalization is working well and where it could improve.

DENMARK'S AMBITIOUS GREEN VISION

Denmark's Parliament overwhelmingly passed a new climate law that aims to reduce greenhouse gas emissions by 70 percent below 1990 levels by 2030, with net zero emissions targeted for 2050. This is an even more ambitious goal than the EU’s target to cut emissions by 55 percent over the same time period.

An IMFBlog by the IMF's Nicoletta Batini and Miguel Segoviano  takes a closer look at Denmark’s green strategy and proposes a few adjustments to help the country realize its ambitious goals. In line with earlier IMF recommendations, the blog highlights an IMF staff paper the paper proposes a comprehensive strategy with enhanced carbon pricing, reinforced by fiscal incentives across different sectors. It also urges using revenues from carbon pricing to cut labor taxes.

Read the full blog here.

IS DIGITAL MONEY REALLY MONEY?

An increasing number of central banks are making substantial progress towards having an official digital currency. However, close to 80 percent of the world’s central banks are either not allowed to issue a digital currency under their existing laws, or the legal framework is not clear.

In a new IMFBlog from the IMF's Catalina Margulis and Arthur Rossi, a review of central bank laws of 174 IMF members found that only about 40 are legally allowed to issue digital currencies.

Any money issuance is a form of debt for the central bank, so it must have a solid basis to avoid legal, financial and reputational risks for the institutions. Ultimately, it is about ensuring that a significant and potentially contentious innovation is in line with a central bank’s mandate. Otherwise, the door is opened to potential political and legal challenges.

Read the full blog here.

THE JOBS OF TOMMORROW

In our most recent issue of Finance & Development, the jobs and skills of future are the focus of a piece by the World Economic Forum's Saadia Zahidi. In her article, "The Jobs of Tomorrow," she lays out five key points on the future of work based on the effect of pandemic-related disruptions placed in the broader context of longer-term technology trends.

Rapid automation, the positive impact of the robot revolution, sought-after skills, the need to upgrade worker skills, and the importance of remote work are key trends that will drive the future of work. Some jobs will disappear and others will emerge as the world faces a dual disruption, Zahidi writes.

Read the full article republished in IMFBlog.

2020 REWIND: LAST YEAR'S TOP 10 BLOGS

Before we step too far into the new year, the editors at IMFBlog invite you to reflect on what the world went through in 2020. As much as we would like to turn the page on 2020, navigating a course forward through still uncertain times entails using all we’ve learned up to now.

Our list of your top reads from the past year tracks the COVID-19 pandemic‚ÄĒfrom the early days of uncertainty and fear through to the tepid and uneven reopening of economies. Naturally, our coverage focused on the profound implications for the global economy and financial stability. But it touched on other dimensions of the crisis as well.

As policy makers debated how best to respond, our economists put forward their recommendations on the types of policies needed to meet the crisis head on. Whether these policies protected lives or livelihoods‚ÄĒand indeed they aspire to do both‚ÄĒthe crisis like no other has been met with a response like no other.

We hope we have helped you make some sense of all this past year has thrown at us, as we now move forward into 2021. Here are the top 10 blogs of 2020, based on your readership.

IMF LENDING

Check out our global policy tracker to help our member countries be more aware of the experiences of others in combating COVID-19. We are also regularly updating our lending tracker, which visualizes the latest emergency financial assistance and debt relief to member countries approved by the IMF’s Executive Board.

To date, 78 countries have been approved for emergency financing, totaling over US$32 billion. Looking for our Q&A about the IMF's response to COVID-19?¬†Click here.¬†We are also continually producing a¬†special series of notes‚ÄĒmore than 50 to date‚ÄĒby IMF experts to help members address the economic effects of COVID-19 on a range of topics including fiscal, legal, statistical, tax and more.

FINAL THOUGHT

Thank you again very much for your interest in the Weekend Read. We really appreciate your time. If you have any questions, comments or feedback of any kind, please do write me a note. 

And if you're on LinkedIn, subscribe to this newsletter in a more ūüďą visual format.

Sincerely,

AB Circle

Adam Behsudi
Deputy Editor, IMF Weekend Read
abehsudi@IMF.org

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