Feb. 22 (UPI) — The head of the International Monetary Fund told European lawmakers Monday that without a global recovery and an emphasis on making economies more climate-friendly, the coronavirus pandemic would likely deepen the wealth gap in Europe. The remarks were made by IMF Director Kristalina Georgieva in a speech at the European Union Parliamentary Conference in Belgium.Georgia noted that 90% of the world’s countries suffered an economic downturn in the health crisis in 2020 and called it the worst global result in peacetime.
She added that vaccinations against COVID-19 have helped to stabilize economies, but the road to recovery remains unclear. Her “deepest concern,” she said, is that the gap between the haves and have-nots will be exacerbated by the crisis.Due to the ongoing race between the virus and the vaccines,[It is] unpredictable. Unequal due to the disparity in starting places, economic structure and capacity to respond, causing inequality to increase both across and within countries.
“The latter is my deepest concern: that the Great Lockdown of 2020 could morph into a great divergency in 2021,” she added. “Divergence is most profound in the developing world where half of the countries that used to catch up in income levels with their wealthier peers are now falling further behind. But it is a risk for the EU as well.”The IMF projects that per capita income for developing markets in Central and Eastern Europe would be nearly 4% below their pre-pandemic estimate by the end of 2022, compared to just 1.3% for advanced economies.
Georgieva noticed that, as they had fewer jobs that allowed for remote work, lower-wealth areas were more damaged. Scaling up the development of vaccines is a crucial move, she said, along with tackling the economic crisis by putting greater focus on equity, growing access to high-speed Internet and “a coordinated green infrastructure investment push.”In rural and underserved areas, increased Internet connectivity, she explained, would increase productivity. An IMF study has shown that green infrastructure investment will generate millions of new jobs and improve the global economy by nearly 1% over 15 years.