IMF: Right policies make a difference in fighting Covid-19

WASHINGTON – China’s experience so far has shown that the right policies make a difference in fighting the Covid-19 epidemic and mitigating its impact, though some of these policies come with difficult economic tradeoffs, the International Monetary Fund (IMF) said.

Noting that success in containing the coronavirus comes at the price of slowing economic activity, three IMF officials wrote on an IMF blog that Chinese policymakers made the “hard choices” to implement strict mobility constraints, both at the national and local level, with the devastating tradeoff in Hubei Province.

“This makes it clear that as the pandemic takes hold across the world, those hit the hardest — within countries but also across countries — will need support to help contain the virus and delay its spread to others,” they said, adding that mitigating the impact of this severe shock requires that support to the most vulnerable be provided.

The IMF officials said that Chinese policymakers have “targeted vulnerable households and looked for new ways to reach smaller firms” — for example, by waiving social security fees, utility bills, and channelling credit through fin-tech firms.

The authorities also quickly arranged subsidised credit to support scaling up the production of health equipment and other critical activities involved in the outbreak response, which has been helpful, the officials argued.

Source: iol.co.za