Topline
The International Monetary Fund announced Monday it would not ask 28 of the world’s poorest countries to make debt payments through October, extending its relief period as Treasury Secretary Janet Yellen said she's worried 150 million people could be pushed into extreme poverty because of the Covid-19 pandemic.
Treasury Secretary Janet Yellen listens during a meeting with President Joe Biden in the Roosevelt ... [+]
Key Facts
The payments will be paused to "continue to help free up scarce financial resources for vital emergency health, social and economic support to mitigate the impact of the Covid-19 pandemic," the Washington, D.C.-based financial organization said.
Yellen warned Monday of long-term, debilitating economic impacts the pandemic could cause in developing countries if wealthy nations don't give assistance, saying 150 million people worldwide could fall into extreme poverty.
Debt payments to the IMF will be reimbursed through its Catastrophe Containment and Relief Trust, which can pay for countries’ debts in the event of natural disasters or other catastrophes.
If wealthy nations continue to donate into the fund, debt relief could be extended through April 13, 2022, according to the IMF.
What To Watch For
The U.S. is set to help fund emergency aid for other countries in the form of “Special Drawing Rights” (SDRs) through the IMF after the organization announced last month it wanted to secure $650 billion in reserve funding from its member states. Republicans, notably U.S. Sen. John Kennedy (R-La.), have vocally opposed the decision, arguing it’s unwise since only a fraction of SDR money goes toward the world’s poorest nations.
Further Viewing
Key Background
Many developing countries’ economies have struggled massively during the pandemic, given the lack of resources to handle such a crisis compared to countries like the United States. And if the vaccine rollout so far has been any indication, they will take much more time to fully recover than wealthy nations. According to an estimate from The Economist, most of Africa, along with large swaths of Asia, South America and Central America likely won’t have widespread vaccine coverage until at least 2023.
Big Number
2. That's how many of the 55 countries in the African Union that have fully vaccinated just 1% or more of their populations as of Monday, according to a Bloomberg tracker.
Tangent
Yellen also on Monday called for countries to come together to agree on a global minimum corporate tax rate. President Joe Biden has proposed hiking the U.S. corporate tax rate from 21% to 28% to help fund his $2 trillion infrastructure plan.
Further Reading
Yellen warns that slow vaccine rollout in poor countries poses threat to U.S., global economies (The Washington Post)
Yellen Pushes For Global Minimum Tax Amid Biden Infrastructure Blitz (Forbes)
