IMF praises GCC countries for pandemic response

Arabian Post Staff

IMF Managing Director Kristalina Georgieva has praised GCC countries for what the have done on the digital front. Speaking at the Meeting of the Ministers of Finance and Central Bank Governors of GCC, she said full standalone 5G wireless in the region will enable remote work, education, telemedicine, and e-government.

You can pursue with even more imagination the application of technologies to be even more competitive in areas where the digital revolution clearly is accelerating, she said.

She praised the UAE for building the worlds largest solar power plant. Next, I want to praise the Saudi G20 presidency for the focus on access to opportunity, especially for youths and women. You have 2.5 million young GCC nationals entering the workforce by 2025. Just imagine what can be done if they all have enhanced access to opportunity.

And I want to recognize that Qatar has introduced a minimum wage for expatriates, and made it easier for them to change jobs. And Saudi Arabia has opened up the labour market more to women, she said.

What do we see for the GCC? We see a six percent GDP contraction in 2020, followed by growth of 2.3 percent in 2021. We also, as you very well know, recognize that you face large fiscal and external deficits. These projections reflect the combined impact of oil price declines, oil production cuts, and of course, as everywhere else, lockdowns. And they assume continued progress in fighting the virus.

It is very important to recognize that the region is likely to see, in the medium term, economic scars: unemployed workers, reduced business investment, students who have been out of schoolwhich takes away from productivity in the future by harming the human capital of the region. As you know, we also have to brace for possibly prolonged low oil prices and prepare for advancement toward alternative sources of energy.

Next, I want to stress where you have been really exemplary in this regionrising to the challenge with swift policy responses.

You have enhanced already-strong public health systems, and that has kept fatality rates in the GCC among the lowest in the world. And that is precious because this crisis is above all a human tragedy. You have taken as good care as possible of your people. Bahrain and the UAE rapidly deployed some of the largest per capita testing and contact tracing regimes in the world. And I cannot stress enough how important having those in place is for for people and for the economy.

Fiscal packages and liquidity support have protected incomes and livelihoods, and the financial sector. Timely and innovative measures included tax exemptions and deferrals, cash transfers, and subsidies to small and medium-sized enterprises.

What next?

First, continue doing what you know works. Keep investing in health systems. Maintain supportive fiscal and monetary policies until we are out of the woods of the health crisis. And increasingly target households and businesses most in need. Then start shifting support away to firms that are likely to succeed and to individuals most in need.

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