In a meeting with members of Intergovernmental Group of Twenty-Four (G24), the Governor of the Central Bank of Iran Abdolnasser Hemmati said the International Monetary Fund and World Bank must take a fair approach toward member states in the fight against Covid-19.
Hemmati chaired the meeting, held virtually on Monday attended by CEOs of the IMF and WB along with governors and economy ministers of the G24.
Addressing economic issues of developing countries coping with pandemic and improving international cooperation was on the agenda, the CBI website reported.
Chronic funding shortages, sharp economic downturn and access to coronavirus vaccine dominated the talks.
"Almost a year after the pandemic we see signs of economic recovery across the globe. However, we are concerned that recovery in developing economies is lagging behind," the senior banker told the conferees.
He described easy access to the vaccine as a catalyst to recovery. "What actually matters now is global cooperation and transfer of technical knowhow to produce and distribute vaccines at fair prices."
Still in Denial
Pointing to the pivotal IMF and WB role in supporting member states in mitigating the impact of the pandemic on their economy and health system, he urged the two global crisis lenders to be unbiased and disregard political pressures.
"IMF is expected to respond to the legal requests of members for loan without prejudice and influence of political lobbies," he said, referring to the $5 billion loan Iran requested in March 2020 from the IMF and has been denied apparently due to US pressure.
The United States is the largest shareholder in the IMF and has an “effective veto" over the lender's decisions.
Hemmati said G24 members had welcomed a proposal for allocation of IMF Special Drawing Rights (SDRs), which could help meet countries liquidity needs. “Since developed countries will receive a major share of the funding, the IMF should put in place a mechanism so that countries that do not need the SDRs can use it for other states.
Kristalina Georgieva, the IMF chief, said "the global economic recession arising from the pandemic could be deeper if it was not because of appropriate financial and monetary policies adopted by countries."
Key to Recovery
"There are signs of recovery in the global economy but it is not universal. Under the present conditions vaccination is an important policy to adopt that could be key to expediting recovery."
The WB President David Malpass said his organization is a major lender to developing countries. However, "many low-income countries are still in need of financial support to control Covid’s long-term impact."
G-24 was established in 1971 to coordinate the positions of emerging markets and developing countries on international monetary and development finance issues.
It helps ensure that their interests are adequately represented at the Bretton Woods Institutions, particularly in the International Monetary and Financial Committee (IMFC) and the development committee meetings of the IMF and WB.
The group—officially called the Intergovernmental Group of Twenty-Four on International Monetary Affairs and Development—is not affiliated to the IMF but it provides secretariat services to the group.
