Supply chains, inflation overshadow vaccine and debt woes

Relatively little new progress was made on increasing vaccine supplies to developing countries. [Courtesy]

Supply chain woes and growing inflation concerns pushed aside a widening gap in Covid-19 vaccinations and debt problems for developing countries as the top concerns for global policymakers at International Monetary Fund and World Bank annual meetings this week.

Relatively little new progress was made on increasing vaccine supplies to developing countries, although officials highlighted an increasing divergence between rich and poor countries as a growing financial and economic risk.

The focus on the normalisation pains that wealthier economies are experiencing and a World Bank data-rigging scandal that had clouded the future of IMF Managing Director Kristalina Georgieva proved a disappointment for anti-poverty groups.

"Given how the pandemic is becoming worse in most of the world’s countries, I’m concerned by the lack of action at the meetings on vaccine distribution, debt relief and general pandemic response,” said Eric LeCompte, executive director of the Jubilee USA Network, a religious development group.

The World Health Organisation chief Tedros Adhananom Ghebreyesus told an IMF forum that the world is falling behind on goals to immunise 40 per cent of the world’s population by the end of this year. He criticised wealthy countries for approving third booster shots when much of the world’s population has yet to receive a single vaccine dose.

“The donations are not enough. It’s very disappointing that it’s taking so long for the world to really commit” to reaching vaccination goals, he said.

The IMF said a “great vaccine divide” was keeping developing countries mired in low growth as they struggle with high coronavirus infection rates.

This, along with supply chain bottlenecks, semiconductor shortages and rising price pressures in advanced economies, prompted the IMF to trim its global growth forecast for 2021. Some policymakers were more focused on managing the next phases of economic recovery after unprecedented fiscal support, and other multilateral issues, such as implementing a deal to revamp global corporate taxation.

French Finance Minister Bruno Le Maire told reporters France was advocating for increased financial support for developing economies.