Name: The coronavirus crisis has been more regressive than most other crises
Uploaded: 2020-10-27
Duration: 3 min 56 s
Description: The World bank Group's Carmen Reinhart explains why.

 Clifton Leaf: One of those historical patterns is that the effects of this pandemic will be regressive. They are regressive. We've seen that, not just within economies, but across economies, in terms of poorer nations, emerging markets, frontier markets. That, though, has been a particular concern of you at the World Bank. Talk a little bit about what the sort of focus is right now, in terms of remediation. Carmen Reinhart: So this crisis-- and this is different from-- I mean, most crises have regressive consequences. It is the most vulnerable sectors of the economy that get hit, but this crisis is particularly regressive. Especially, it's regressive within country, with the poorest segments of the population being hit. And it is also regressive across countries because it is the poorest countries that will be facing the biggest spikes in poverty rates, the biggest challenges to almost any social marker, ranging from health to education. So it's a very regressive crisis, and what to do about it? Well, first of all, there is overall government support. And if you look at the multilaterals, the IMF and the World Bank, and the regional development banks lending in the balance of this year to date, it's setting records, not only the amount of lending but the number of countries that have been receiving lending. And an important element of that lending is that it's relatively front-loaded and fast relative to the usual programs. It's emergency lending. And with the aim that this kind of general support also allows governments, especially those that have most limited resources, which is very much the focus of the bank. The poorest countries, those with the most limited resources, have the capacity to deal with the needs in the health industry. And also, some of the lending has been more targeted to things like cash transfers. Cash transfer programs, like in Brazil, Bolsa Familia as an example, are a way of trying to maintain the livelihood, maintain some adequate capacity to survive this crisis for those many households that are not covered by-- in cases where social safety nets are either very limited or nonexistent. So big emphasis on general support, cash transfers, and of course, the World Bank had a long history of many programs on providing support for health, education, food security, and the like. But the two that I highlighted, I think, figure prominently. 

The coronavirus crisis has been more regressive than most other crises 

Leadership

The World bank Group's Carmen Reinhart explains why.