Draft International Monetary Fund (Limit on Lending) Order 2020

Pat McFadden Excerpts

Tuesday 22nd September 2020 General Committees

[Mr Pat McFadden (Wolverhampton South East) (Lab)]

As the Minister explained, the order authorises an increase in the UK’s contingent contribution to the IMF of just under £5 billion, and it does so at an important time. The increase was agreed by Finance Ministers and central bank governors in December last year, before it was known how big a challenge the pandemic would become. The question we are faced with is whether what we are doing internationally is anywhere near enough.

The pandemic has produced drastic economic effects across the world. Of course, many of the lowest income countries lack the medical resources to fight it, to treat patients, to test on a large scale or to support workers who have lost their jobs as a result of lockdowns or a decrease in economic activity. The International Labour Organisation estimates that 400 million full-time equivalent jobs were lost in the second quarter of this year. The World Bank projects that an additional 71 million people will fall into extreme poverty.

The race is on to devise an effective vaccine to help the world to recover. We should be proud that British science is at the forefront of that effort, but even if it is successful, there will be a huge logistical and healthcare challenge to make sure that a vaccine can be administered to the world’s population. Many countries will need economic help to make sure that that can happen. If ever there were a situation where we are all in it together, this is it.

Our chief medical officer reminded us yesterday that no one can think of just themselves in this situation; the actions that we take affect others. What goes for individuals goes for countries too. In a world as connected as ours, it is in all our interests to make sure that every country is as equipped as possible to fight the virus. As the managing director of the IMF, Kristalina Georgieva, wrote earlier this month:

“An uneven rollout might improve economic conditions in countries that secured the vaccine first but would not shield them from weak demand from trade partners struggling to recover without a vaccine.”

There are also the damaging social effects of what is already happening. She continued:

“young children, especially those from poor households, may suffer permanent losses…from a lack of schooling, adequate nutrition, and medical access.”

In the face of such challenges, it is striking how little international co-ordination there has been. Country by country, we have fought the virus, but the world has lacked the leadership to bring different countries together and co-ordinate a truly global economic or health response. We approve the increased funding for the IMF, but the real question is why more has not been done globally to co-ordinate the fight against the pandemic that we are in the midst of.