Financial Scams Rise as Coronavirus Hits Developing Countries

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David Medine is Senior Financial Sector Specialist at the Consultative Group to Assist the Poor (CGAP). He is also CGAP’s lead on data protection and security and works to develop novel, consumer-oriented approaches to data protection and to encourage the creation of cyber security resource centers for developing countries.

Credit: County of Los Angeles

WASHINGTON DC, May 5 2020 (IPS) – In the Philippines, Peru, India, Kenya, South Africa and many other developing countries, poor people who are already struggling with the health impact of the coronavirus pandemic have been targeted by online fraudsters trying to take unfair advantage of them.

There is the risk that these scams could undermine confidence in digital technologies that are proving so very important in keeping people informed and connected during the pandemic.

In particular, trust in digital financial services, which have been useful in advancing financial inclusion efforts, could be damaged at the very time that they have proven to be an effective means of getting payments to poor people quickly and efficiently.

Here are some examples of virus-related scams:

phishing

    • attack is offering housebound people in India a free Netflix subscription during the lockdown if they click on a survey link and forward the message to 10 WhatsApp users.
    • • Emails with suspicious links have also been sent purporting to be from the World Health Organization, United Nations and Centers for Disease Control and Prevention.

Scammers

    • have been visiting homes in South Africa to “recall” banknotes and coins they say are contaminated with the coronavirus, providing receipts for “clean” cash that is never delivered.

Fake

    • offers of emergency money for essentials have been reported in India.
    • • INTERPOL

warns

    • that criminals have been calling victims pretending to be clinic or hospital officials, reporting that a relative has fallen sick with the virus and requesting payments for medical treatment.
    • • People desperate to protect themselves are falling for offers of

fake

    • medical products, such as masks, vaccines and

testing kits

    • Education and COVID-19: UN helps children continue their learning

There have even been false claims that the coronavirus is related to exposure to new technologies (such as 5G, which can be used to deliver money mobiles services). There are measures authorities can take in response to better protect consumers.

Regulators, providers and consumer protection agencies can alert people to the risks; providers can make sure they have adequate consumer complaint mechanisms in place; and law enforcement can coordinate firm action, not only in country but across borders.

Credit: United Nations

Preying on vulnerable populations in developing countries at a time of crisis is unconscionable. A multi-pronged effort is needed to protect more people from becoming victimized at a time when many are struggling with lost income as a result of being forced to stay at home to combat the illness.

A concerted effort by the public and private sectors is needed to protect customers through educational efforts and high visibility law enforcement actions.

In the short term, education is key, and governments are often best positioned to take the lead. For instance, the South African Banking Risk Information Centre (Sabric) has been warning bank customers about criminals exploiting the virus to engage in phishing.

Similarly, the Philippines Department of Information and Communications Technology has asked Filipinos to be mindful of their safety online and to be wary of unverified COVID-19 websites or applications that require consumers to provide their personal data.

There is a need for governments to continue to identify consumer protection threats — initially, by reaching out to banks, microfinance institutions, fintechs, NGOs and other entities to find out what they are seeing in their markets. Efforts should then be made to warn people how to identify potential scams.

The Central Bank of South Africa has stated that neither banknotes nor coins have been withdrawn from circulation, so anyone offering to “recall” currency should be met with a skeptical eye.

While there is a natural instinct to provide financial support for friends and family in need of medical care, it is important to follow INTERPOL’s warning and confirm that unknown callers are really acting on their behalf. Such consumer warnings could be sent via SMS, WhatsApp or along with other governmental communications.

The private sector must also play a critical role in protecting consumers during the crisis. In the course of providing financial services, trusted firms can educate customers about how to avoid pitfalls, such as responding to fraudulent communications.

There is also the need for digital financial services companies to have effective consumer complaint and resolution centers so that customers who have been scammed have some recourse.

Prosecuting digital scam artists promptly and meting out harsh punishments will send a strong message. One recent example is the response to a brazen attempt by a fraudster in India purporting to sell the world’s tallest statue, the Statue of Unity, for $4 billion to raise money for the Gujarat state to fund its fight against coronavirus.

This action led the Indian police to lodge a case. Similarly, Indian police have registered cases against fake offers of discounted Jio and Netflix services. Such enforcement actions help further educate members of the public about protecting themselves against fraudulent actors.

In the connected world in which we live, it is often easier to commit fraud across borders than inside one’s own country. There is no better time than now for governments to work with their neighbors and go after criminals in each other’s countries.

Such an effort has been led by INTERPOL, an inter-governmental organization with 194 member countries, including many developing countries. INTERPOL has been receiving information from member countries on a near-daily basis regarding coronavirus fraud cases, along with requests to help stop fraudulent payments.

While targeted victims have been primarily located in Asia, criminals have used bank accounts in other regions such as Europe. INTERPOL has helped national authorities to block some of the payments, assisting with some 30 COVID-19 related fraud scam cases.

Where cooperative agreements between countries do not exist, perhaps a silver lining of the current crisis would be to promote such cross-border consumer protection efforts.

Collectively, we can combat the outrageous attempts by some to take advantage of this crisis for their financial benefit. Of course, to survive many people will need more medical and financial help, not just tips on how to avoid scams.

Many countries have undertaken wide-ranging relief efforts. Digital financial services, such as mobile money, are proven mechanisms for getting financial aid quickly to the poorest and neediest in times of crisis.

Let’s take steps now to ensure digital technology is used as a force for good.

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Impact of COVID-19 on Tourism in Small Island Developing States

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Pamela Coke-Hamilton, Director, Division on International Trade and Commodities, UN Conference on Trade & Development (UNCTAD)

Small island developing states are most vulnerable to the impact of COVID-19 on tourism not only because they are highly dependent on tourism, but also because any shock of such magnitude is difficult to manage for small economies

An undersea restaurant in the Maldives, a Small Island Developing State (SIDS)

GENEVA, May 4 2020 (IPS) – The COVID-19 pandemic and the measures put in place to contain its diffusion are taking a heavy toll on the tourism sector. According to the United Nations World Tourism Organization (UNWTO), the COVID-19 pandemic will result in a contraction of the tourism sector by 20% to 30% in 2020.

This estimate is likely to be conservative for countries relying on foreign tourists, as the recent data on daily air traffic indicate a drop of almost 80% since January 2020.

While many economic sectors are expected to recover once restrictive measures are lifted, the pandemic will probably have a longer lasting effect on international tourism. This is largely due to reduced consumer confidence and the likelihood of longer restrictions on the international movement of people.

According to the World Travel and Tourism Council (WTTC), in previous viral epidemics the average recovery time for visitors to a destination was about 19 months.

Highly vulnerable countries

The sudden, deep and likely prolonged downturn in the travel and tourism sector has made countries that rely heavily on foreign tourism very concerned about their finances.

Among these, small island developing states (SIDS) are most vulnerable not only because they are highly dependent on tourism, but also because any shock of such magnitude is difficult to manage for small economies.

On average, the tourism sector accounts for almost 30% of the gross domestic product (GDP) of the SIDS, according to WTTC data. This share is over 50% for the Maldives, Seychelles, St. Kitts and Nevis and Grenada.

Overall, travel and tourism in the SIDS generates approximately $30 billion per year. A decline in tourism receipts by 25% will result in a $7.4 billion or 7.3% fall in GDP. The drop could be significantly greater in some of the SIDS, reaching 16% in the Maldives and Seychelles.

It is expected that for many SIDS, the COVID-19 pandemic will directly result in record amounts of revenue losses without the alternative sources of foreign exchange revenues necessary to service external debt and pay for imports.

Devastating economic consequences

In general, countries may be able to weather economic storms by relying on additional debt or using available foreign reserves.

However, access to global capital markets is increasingly tight, more so for small countries such as SIDS, which are often highly indebted and not well diversified.

The external debt of the SIDS as a group accounts for 72.4% of their GDP on average, reaching up to 200% in the Seychelles and the Bahamas.

Foreign reserves are also generally low, with many of the SIDS possessing only the reserves sufficient for a few months of imports. Given these statistics, it is evident that without international assistance, the economic consequences of the pandemic will be devastating for many of the SIDS.

Immediate financial needs

By considering the economic impact of reduced tourism revenues (assuming a 25% decline in tourism receipts and restoring the minimum level of import coverage (three months), it is possible to provide a rough estimate of each country’s immediate financial needs to offset the damage of the pandemic.

Currently, the SIDS would need about $5.5 billion to counteract the adverse effects of the pandemic on their economies.

The Maldives stands out with a need of $1.2 billion due to its reliance on tourism revenues, followed by the Bahamas and Jamaica.

Many of the SIDS, like Jamaica and the Bahamas, also face high external debt burdens which require complementary external debt suspension or relief programmes.

Table 1: Tourism, Debt and Foreign Currency Reserve Indicators

International response

While governments all over the world have announced fiscal measures totalling $8 trillion to combat the pandemic, the international community has also mobilized funds through international financial institutions to counteract the economic crisis in the most vulnerable countries.

The International Monetary Fund (IMF) created a $50 billion fund through its rapid-disbursing emergency financing facilities for low-income and emerging market countries. It has earmarked $10 billion to serve its poorest members with a zero-interest rate. Regional banks have also created response facilities aimed at financially supporting their members.

What options are available for SIDS?

The IMF has just revamped the Catastrophe Containment and Relief Trust (CCRT) to offer short term debt reliefs to some of its members.

While some SIDS such as Comoros, São Tomé and Príncipe, and the Solomon Islands have already requested and obtained debt relief, there is room for more SIDS to take advantage of this option. While many of the SIDS are not among the poorest countries, they are vulnerable. This is further compounded by high levels of external debt many SIDS experience.

It is critical that SIDS have access to funding at zero interest rates and can suspend existing debt payments until they are financially ready to service their external debt obligations.

Ultimately, this can help blunt the impact of external shocks such as COVID-19 and equip them with the necessary financial resources to plan their next steps for their economic development.

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Collaboration Can Help Eradicate COVID-19

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Rev Liberato C. Bautista is assistant general secretary for United Nations and International Affairs of the United Methodist Board of Church and Society. He also serves as president of the Conference of Non-Governmental Organizations in Consultative Relationship with the United Nations.

Coronavirus pandemic threatens crises-ravaged communities, UN appeals for global support. Credit: United Nations

NEW YORK, Apr 23 2020 (IPS) – Since the founding of the United Nations in 1945, space for multilateral policy development and commitment has grown. Its growth in the global health field augurs well as we find ways to mitigate the spread of the novel coronavirus.

Multilateralism is a difficult word, often misconstrued to be about the global and not the local and daily life. Perception plays a major role in how the public perceives multilateralism. This is in part due to the complexity of modern global challenges, which are well beyond the capacity of any one state or even a small group of states to resolve by themselves.

The novel coronavirus pandemic may yet change this perception.

As the saying goes, all politics is local. My rejoinder to this is that one’s local is another’s global. The local and the global are simultaneous realities. United Methodist connectionalism is akin to multilateralism.

As a church, we address social issues central to the multilateral agenda, including health, migration, peace, climate, and concerns about global poverty, trading and commerce, sustainable development, social justice, women, children and gender justice, human rights, indigenous peoples, and more.

Holistic health, healing and wholeness are intrinsic to Methodism and its Wesleyan roots. John Wesley attended to both the care for the soul and for the biological body with his abundant tips and remedies for ailments during his time.

Throughout the United Methodist connection, we are doing advocacy on public health policies at national legislatures and multilateral settings. We are in global mission together for sustainable development and humanitarian assistance, building capacity for peoples and communities to manage their healthcare needs.

Our numerous United Methodist-affiliated clinics, hospitals, colleges and universities around the world are training medical, health, social work and pastoral care professionals.

The Rev. Liberato Bautista. Credit: Marcelo Schneider, World Council of Churches

Human rights intrinsic to health, healing and wholeness

Global pandemics such as the novel coronavirus respect no sovereign boundaries or national allegiances. The coronavirus ravages all peoples across races and social classes, but its effects are more devastating on vulnerable populations everywhere and on struggling low- and middle-income economies around the world.

To mitigate the virulent spread of COVID-19, we are called by national authorities to stay at home, wash our hands, stay in place and practice physical distancing. These public health directives imply that we have houses to stay in, water to wash our hands, and some space where we can move around and still maintain six feet distance from each other.

When Philippine government officials issued the directive for Filipinos to stay at home, Norma Dollaga, a United Methodist deaconess and justice advocate from the Philippines, reacted through her Facebook page: “Stay at home. That’s for those who have homes. How about the homeless?”

The reality is that the human rights to health, housing and water, along with human mobility, have long been imperiled in many places around the world prior to COVID-19’s onslaught. Moreover, the health crisis has been used as an excuse in other parts of the world to grab power or tighten national security laws that are assaulting civil liberties and violating democratic rights.

Neither pandemic nor political or economic exigency can derogate from the enjoyment of fundamental human rights.

That the outbreak of COVID-19 started in Wuhan City in China has resulted in undue rise in racist and xenophobic acts especially against people of Chinese origin, or Asians in general. This is on top of an ongoing surge of populism and xenophobic nationalism around the world.

Health is wealth, fund it robustly

If health is wealth, it behooves peoples and their governments to protect it. Health care workers who are on the front line against this pandemic should have all the resources they need without begging for them.

A war may have been declared in the eradication of the novel coronavirus pandemic. But it is looking more like the deployment of war rhetoric and not the funding that real wars have received.

National budgets are moral documents. Health is the true common wealth that we must invest human and budgetary resources to. Yet we know that defense spending today far outweighs the puny investments from national coffers that health care urgently needs and strategically deserves.

Global collaboration is indispensable

The role of the U.N. in forging global cooperation is crucial, in times of crisis or calm. Global cooperation in the surveillance of emerging viruses and bacteria is necessary if pandemics are to be mitigated and diseases eradicated.

Coordinating this global collaboration and leading the development of a vaccine to treat the COVID-19 disease gives the public good reason to trust global institutions like World Health Organization. Think of the eradication of smallpox — and the ongoing programs to eventually eradicate polio and malaria — as examples of how global cooperation benefits us in our local daily lives.

To triumph over COVID-19, comprehensive cooperation is needed on many fronts — medical, pharmaceutical, healthcare workers, mental health providers, healthcare facilities. Public and private coordination is necessary in ensuring that the supply chain for much needed testing kits, ventilators, as well as personal protective equipment like N95 face masks, gloves, gowns, aprons, face shields and respirators remain unbroken.

A successful multilateral response requires a “whole-of-government,” “whole-of-society” and evidence-based public health approach. Mitigation works best when countries share expertise and scientific knowledge about threats to health, to climate, to populations and to peace and security.

Social inequalities imperil public health

The Commission on the Social Determinants of Health established by WHO in 2005 elaborated on the disastrous effects of social inequalities on people’s health. The intersections of physical, mental and social health, healing and wholeness are abundantly clear.

The commission’s 2008 final report stated: “The social determinants of health are the conditions in which people are born, grow, live, work and age. These circumstances are shaped by the distribution of money, power and resources at global, national and local levels.

The social determinants of health are mostly responsible for health inequities — the unfair and avoidable differences in health status seen within and between countries.”

The U.N. commemorates its 75th anniversary this year. It is an auspicious time to reaffirm support for its mandates, especially the securing of health for all peoples and the planet. A healthy population makes for a healthy planet.

Nongovernmental organizations, including faith-based organizations like our United Methodist representations at the U.N., are in a kairos moment to help achieve the U.N.’s mandates.

COVID-19 may have been virulent and will forever change the rules of social etiquette and socialization. But the novel coronavirus has done what multilateral negotiations have not done — pause globalization and its unbridled pursuit of profit and capital.

When the world reopens from the ravages of the virus, we have a momentous task not to return to, but to transform, global and local arrangements to protect humanity and the planet, at least from the ravages of pandemics and social inequalities.

It comforts me that not all contagions are deadly. Some are beneficial. Love and kindness are. So are hospitality, mercy and justice.

*This article 0riginally appeared in UM News”. The link follows: https://www.umnews.org/en/news/collaboration-can-help-eradicate-covid-19

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Citizen Action is Central to the Global Response to COVID-19

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NEW YORK and MANILA, Apr 22 2020 (IPS) – The coronavirus (COVID-19) pandemic has created an unprecedented human and economic crisis. Governments are taking strong actions, enforcing quarantines to reduce contagion, testing populations, building emergency intensive care units. Governments have also launched large fiscal stimulus plans to protect jobs and the economy, as well as temporary social protection programs such as income/food support, subsidies to utilities and care services.

Isabel Ortiz

But in many countries, even stronger actions are needed if we are to protect lives and jobs. States must respond adequately to this public emergency. Citizens must question if the measures implemented by their governments are sufficient and adequate.

The following are important issues for citizens and civil society organizations (CSOs) to watch out at the country level:

    1. It is time to invest in universal public health, not only emergency support. Given COVID-19, governments are advised to ramp up public health expenditures. Indeed, respirators, tests and masks are necessary, but countries need more than just emergency support. There is a risk that, as governments will become indebted, they continue with austerity cuts and privatizations that have been eroding public health systems in recent years, returning to a situation where millions are excluded from healthcare.
    2. Stimulating the economy and employment. This is much necessary to support job-generating enterprises during the COVID-19 lockdown. However, citizens need to be vigilant that fiscal stimulus do not go to the wrong hands, to large corporations avoiding taxes, to cronies, to the untaxed financial sector. If public funds are given to companies, it should be with strict conditions to stop tax evasion and share buybacks, undergo adequate regulation, cut obnoxious management bonusses, pay living wages and preserve employment.
    3. Providing social protection, income and food support to people. These measures are extremely urgent if people are to be quarantined and are unable to telework. In developing countries, most work precariously in the informal economy and isolation is not possible, households will suffer hunger with no income. Given the low living conditions in most developing countries, policymakers should consider the need for universal social protection floors.
    4. Governments need more executive powers to implement these measures. States and public policies have been weakened over the last decades by deregulations, privatizations and budget cuts. Better planning, better resources and better public policies for all citizens are needed, but it is important to ensure that far right and authoritarian leaders do not use the need for decisive executive action to grab more power for their own ends (eg. Brazil, Hungary, India, Philippines, US).

Additionally, it is important for citizens and CSOs to push for the following measures at the global level:

Walden Bello

    5. Support for global public health, at stake is the survival of the planet. The coronavirus pandemic has revealed the weak state of global public health systems – generally overburdened, underfunded and understaffed because of earlier austerity policies and privatizations. There is urgent need to improve the global governance of health, including the strengthening the WHO and UN agencies that support the extension of public health systems, as well as CSOs monitoring progress.
    6. Put pressure on the international financial institutions such as the IMF and the development banks, so their policies support universal public health systems, jobs and social protection floors at present as well as after the COVID-19 emergency, including resources and fiscal space to finance them.
    7. Given high sovereign debt levels, continue lobbying for debt forgiveness or radical debt relief to ensure that countries get the needed financing; or at least a debt moratoria, and later debt restructuring/relief.
    8. Watch out that new debt and fiscal deficits created to respond to COVID-19 do not result in a new round of austerity cuts with negative social impacts that will undermine public health systems, jobs and social protection.
    9. Ensure capital controls. Capital is flying North to safety, to the US, to Europe. Developing countries are going to be hard hit, not only because of the capital drain but also from the fall of commodity prices and others. Capital controls are easy to implement, with immediate results.
    10. A Global Marshall Plan, or a Global Green New Deal. Global problems require global solutions; after the WW2, the US implemented a Marshall Plan to rebuild Europe. This time, no country alone can or should finance a global plan, it can be built as part of a progressive multilateralism. There are many ways to finance it, solidarity taxes to wealth may well be a best way to reduce inequalities and even up world’s development. It can be complemented by other measures such as issuing more Special Drawing Rights (SDRs) at the international organizations.

The coronavirus pandemic has provided stark evidence of the weaknesses and extreme injustices of our world. We must not return to “normality”, a world where half of its population is living below the poverty line of $5.50 a day. We must move away from an inequitable model based on unregulated finance and corporate power, blind to harmful social and environmental impacts. We must back away from a system that disregards the work of health staff, cleaners, garbage collectors, farmers, and instead reward with huge salaries corporate managers, football players, and others who do not perform any essential activity. Now citizens have the opportunity to move forward.

As countries and enterprises recuperate from the crisis, they will have to rethink their economic model, including fewer links with global supply chains, and more links closer to home. It will be an important time for citizens and CSOs to press for “deglobalization”, making the domestic market again the center of gravity of the economy by preserving local production with decent jobs and green investments, and question global supply chains based on taking advantage of cheaper wages, lesser taxes and environmental regulations elsewhere.

Now is the time for citizens to ensure that world leaders forcefully respond to the COVID-19 crisis, in accordance with human rights. This time it cannot be like many earlier crisis experiences, where insufficient support was provided, or ended in the wrong hands, bailing out banks not the population. Citizens and CSOs have a very important role to play to ensure that governments respond to people.

Isabel Ortiz is Director of the Global Social Justice Program at the Initiative for Policy Dialogue, Columbia University, and former director of the International Labour Organization (ILO) and UNICEF.

Walden Bello is senior analyst at the Bangkok-based Focus on the Global South and the International Adjunct Professor of Sociology at the State University of New York at Binghamton.

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A Global Crisis Like No Other Needs a Global Response Like No Other

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Kristalina Georgieva is the Managing Director of the International Monetary Fund (IMF)

WASHINGTON DC, Apr 22 2020 (IPS) – I have been saying for a while that this is a ‘crisis like no other.’ It is:

    • • More complex, with interlinked shocks to our health and our economies that have brought our way of life to an-almost complete stop;
    • • More uncertain, as we are learning only gradually how to treat the novel virus, make containment most effective, and restart our economies; and
    • Truly global. Pandemics don’t respect borders, neither do the economic shocks they cause.

Credit: IMF

The outlook is dire. We expect global economic activity to decline on a scale we have not seen since the Great Depression.

This year 170 countries will see income per capita go down – only months ago we were projecting 160 economies to register positive per capita income growth.

Actions taken

Exceptional times call for exceptional action. In many ways, there has been a ‘response like no other’ from the IMF’s membership.

Governments all over the world have taken unprecedented action to fight the pandemic—to save lives, to protect their societies and economies. Fiscal measures so far have amounted to about $8 trillion and central banks have undertaken massive (in some cases, unlimited) liquidity injections.

For our part, the IMF has $1 trillion lending capacity – 4 times more than at the outset of the Global Financial Crisis—at the service of its 189 member countries. Recognizing the characteristics of this crisis—global and fast-moving such that early action is far more valuable and impactful—we have sought to maximize our capacity to provide financial resources quickly, especially for low-income members.

In this regard, we have strengthened our arsenal and taken exceptional measures in just these two months.

These actions include:
• Doubling the IMF’s emergency, rapid-disbursing capacity to meet expected demand of about $100 billion. 103 countries have approached us for emergency financing, and our Executive Board will have considered about half of these requests by the end of the month.
• Reforming our Catastrophe Containment and Relief Trust, to help 29 of our poorest and most vulnerable members—of which 23 are in Africa—through rapid debt service relief, and we are working with donors to increase our debt relief resources by $1.4 billion. Thanks to the generosity of the UK, Japan, Germany, the Netherlands, Singapore, and China, we are able to provide immediate relief to our poorest members.
• Aiming to triple our concessional funding via our Poverty Reduction and Growth Trust for the most vulnerable countries. We are seeking $17 billion in new loan resources and, in this respect, I am heartened by pledges from Japan, France, UK, Canada, and Australia promising commitments totaling $11.7 billion, taking us to about 70 percent of the resources needed towards this goal.
• Supporting a suspension of official bilateral debt repayments for the poorest countries through end 2020—a ground-breaking accord among G20 countries. This is worth about $12 billion to nations most in need. And calling for private sector creditors to participate on comparable terms—which could add a further $8 billion of relief.
• Establishing a new short-term liquidity line that can help countries strengthen economic stability and confidence.

Kristalina Georgieva

This is the package of actions that the International Monetary and Financial Committee endorsed last week at our virtual Spring Meetings.

It represents a powerful policy response. Above all, it enables the IMF to get immediate, ‘here and now’ support to countries and people in desperate need. Today.

Preventing a protracted recession

But there is much more to be done and now is the time to look ahead. To quote a great Canadian, Wayne Gretzky: “Skate to where the puck is going, not where it has been.”

We need to think hard about where this crisis is headed and how we can be ready to help our member countries, being mindful of both risks and opportunities. Just as we responded strongly in the initial phase of the crisis to avoid lasting scars for the global economy, we will be relentless in our efforts to avoid a painful, protracted recession.

I am particularly concerned about emerging markets and developing countries.

They have experienced the sharpest portfolio flow reversal on record, of about $100 billion. Those dependent on commodities have been further shocked by plummeting export prices. Tourism-dependent countries are experiencing a collapse of revenues, as are those relying on remittances for income support.

For emerging economies, the IMF can engage through our regular lending instruments, including those of a precautionary nature. This may require considerable resources if further market pressures arise.

To prevent them from spreading, we stand ready to deploy our full lending capacity and to mobilize all layers of the global financial safety net, including whether the use of SDRs could be more helpful.

For our poorest members, we need much more concessional financing. With the peak of the outbreak still ahead, many economies will require significant fiscal outlays to tackle the health crisis and minimize bankruptcies and job losses, while facing mounting external financing needs.

But more lending may not always be the best solution for every country. The crisis is adding to high debt burdens and many could find themselves on an unsustainable path.

We therefore need to contemplate new approaches, working closely with other international institutions, as well as the private sector, to help countries steer through this crisis and emerge more resilient.

And the IMF, like our member countries, may need to venture even further outside our comfort zone to consider whether exceptional measures might be needed in this exceptional crisis.

Preparing for recovery

To help lay the foundations for a strong recovery, our policy advice will need to adapt to evolving realities. We need to have a better understanding of the specific challenges, risks and tradeoffs facing every country as they gradually restart their economies.

Key questions include how long to maintain the extraordinary stimulus and unconventional policy measures, and how to unwind them; dealing with high unemployment and ‘lower-for-longer’ interest rates; preserving financial stability; and, where needed, facilitating sectoral adjustment and private sector debt workouts.

We also must not forget about long-standing challenges that require a collective response, such as reigniting trade as an engine for growth; sharing the benefits of fintech and digital transformation which have demonstrated their usefulness during this crisis; and combating climate change—where stimulus to reinforce the recovery could also be guided to advance a green and climate resilient economy.

Finally, in the new post-COVID-19 world, we simply cannot take social cohesion for granted. So, we must support countries’ efforts in calibrating their social policies to reduce inequality, protect vulnerable people, and promote access to opportunities for all.

This is a moment that tests our humanity. It must be met with solidarity.

There is much uncertainty about the shape of our future. But we can also embrace this crisis as an opportunity—to craft a different and better future together.

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Kerala Covid-19 Response Model for Emulation

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SYDNEY and KUALA LUMPUR, Apr 9 2020 (IPS) – Within weeks, the Covid-19 epidemic was classified by the World Health Organization (WHO) as an epidemic of international significance, triggering a pre-agreed WHO response. By the end of the first week of April, more than 1.3 million people had been confirmed as infected, with over 65,000 deaths across the world.

Anis Chowdhury

Many governments of developing, especially poor countries are unsure what to do, fearing the likely economic consequences of the ‘lockdowns’ increasingly adopted by Western economies. Indeed, lockdowns may shut down businesses relying on daily turnover and eliminate incomes for daily rated workers.

Meanwhile, most East Asian and some other governments have acted early to trace, test, isolate and treat the infected without lockdowns. Yet, most measures recommended have been criticized as beyond the means of the most vulnerable societies and populations.

Early action crucial
Early measures have required ‘physical distancing’ and other precautionary measures — at work, at home and in the community, at relatively low cost. People also need to be prepared to live differently for a long time to come as part of a ‘new normal’, at least until everyone can be effectively vaccinated.

‘All of government’ approaches are urgently needed everywhere to provide effective leadership to ‘whole of society’ efforts to contain the spread of viral infections. While this is no conventional war, only whole of society mobilization efforts can help mitigate major economic disruption and damage.

This should not only involve public health and police authorities, typically those empowered by draconian lockdowns. But repressive measures are unlikely to secure needed public support for effective enforcement and implementation, and adoption of needed behavioural and cultural changes.

Health authorities must provide publics with much better understanding of the threats faced and the rationale for policy responses to secure compliance. Public appreciation of the challenges involved is crucial for policy compliance and effective implementation.

Physical distancing, social solidarity
Kerala state in southwestern India, with a population of 35 million, has become “a model state in the fight against Covid-19”. Its Left Front-led government was among the first to introduce precautionary state-wide measures against the novel coronavirus threat.

Through appropriate and effective early actions, it has successfully slowed the spread of infection in the state, largely by promoting physical distancing and mainly sanitary precautionary, measures, and providing better protection for health staff well before the hugely disruptive and draconian lockdown imposed in India in late March.

Jomo Kwame Sundaram

The Kerala state government invited religious leaders, local bodies and civil society organizations to participate in policy design and implementation, considering its specific socio-economic conditions, including urban slum environments.

It has communicated effectively in different languages to educate all, including migrants, and to prevent stigmatization of those infected, even opposing the term ‘social distancing’, which has caste connotations, with ‘physical distancing and social solidarity’.

Returning migrants
Despite Kerala’s long-standing achievements in education, health and science, highly educated Keralans tend to migrate to work out of state, if not abroad, seeking more lucrative employment. The state was still recovering from the devastating floods and nipah virus epidemic of 2018 when tens of thousands began returning after losing jobs in the Middle East.

Kerala is also the destination for a large number of Indian internal migrants. With the nationwide lockdown, non-residents, equivalent to almost 5% of Kerala’s population, have returned, causing a surge of new infections.

Such unusually high movements of people have made the state more vulnerable. Despite some controversy, the state appears to have handled the migrant issue very well, especially compared to other state governments and the central government.

There has also been a close connection between Kerala and Wuhan, a popular educational hub offering affordable quality medical and other courses; the first three positive Covid-19 cases detected in India involved returned university students in Wuhan.

The state health department promptly went into action, setting up a coordination centre on 26 January. Recognizing there was no time to be lost, the Kerala state government set up mechanisms to identify, test, isolate and treat those infected, quickly earning an excellent reputation.

Less disruptive, less costly, more effective
Some key features of Kerala’s response, undertaken by a government with very limited fiscal resources, are hence instructive.

*All-of-government approach: involving a range of relevant state government ministries and agencies to design measures to improve consistency, coordination and communication, and to avoid confusion.

*Whole-of-society approach: wide community consultations, including experts, to find the most locally appropriate modes of limiting infections, along with means to monitor and enforce them.

*Social mobilization: communities were provided essential epidemiological information to understand the threat and related issues, ensure compliance with prescribed precautionary measures, and avoid panic.

*No one left behind: adequate supply of essential commodities, particularly food and medicines, has been ensured, especially to protect the most vulnerable sections of society.

To make things worse, Kerala has been discriminated against by the central government’s disaster relief fund on specious grounds. The largely agricultural state has modest fiscal resources of its own as state governments in India have limited fiscal rights and resources.

Credible leadership
The Kerala government has set up 18 committees and holds daily evening meetings to evaluate the situation, issuing media updates about those quarantined, tested and hospitalized .

At these meetings, the state Health Minister and Chief Minister calmly explain what is going on, including what the government is doing. They thus provide credible leadership on the difficult issues involved, securing strong public participation for its mass campaign of containment.

Kerala’s approach has proven less disruptive, less costly and more effective than most others. After recording its first COVID-19 case on January 30, its infection and death rates have been kept relatively low despite much more tracing and testing.

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