Thank you, Chair. I agree with the points made by the IMF that the recovery is underway but hobbled and unequal.
While advanced economies are already recovering to their pre-pandemic income levels per capita, developing countries will be slow to achieve the same. Per capita income will be up nearly 5% in advanced economies but only 0.5% in low-income economies.
Reversals are occurring in median income, poverty, education, health, and gender equality.
Supply-chain bottlenecks are inflationary. Our estimates suggest that 8.5% of global container shipping is stalled in or around ports, double January 2020. These disruptions are placing sharp price pressures on shipping fees and the final costs of goods, and some of them will not be “transitory.”
High debt levels add to the burden. We published the new International Debt Statistics – IDS – report on Monday showing $860 billion in the debt of low-income countries, up 12%. With the Debt Service Suspension Initiative – DSSI – expiring at year-end, we should look at a debt payment standstill in the context of the Common Framework. We need to improve debt reconciliation and transparency.
Turning to vaccines, developing countries need 5 billion more doses to vaccinate 70% of their population by the middle of next year. And there’s a need to boost manufacturing capacity too. The International Finance Corporation – IFC – is investing to expand production in Africa.
Some urgent steps are needed: (i) swapping near-term vaccine delivery schedules with COVAX and AVAT; (ii) closing the gap between pledges and deliveries; and (iii) eliminating trade and regulatory barriers. Finance and health ministers in developing countries should also seek contracts that include early delivery schedules. The World Bank currently has nearly 250 million doses under contract with our own financing. We would like to double that and more, but need supply from advanced economies and demand indications from developing countries.
On climate, our Climate Change Action Plan is based on integrating climate and development using a country’s incentive structure and prioritizing adjustments so that spending has as much impact as possible. We need to take a hard look at the fossil fuel subsidy regimes and design appropriate carbon taxes and other incentives for carbon reduction. This will be critical for bending the emissions curve.
In order to meet these global development needs, IDA will play an important role as a non-fragmented and very effective vehicle. Thank you for your support for an ambitious IDA20 replenishment in the communique.