being undermined by decades of financial liberalisation, developing countries now are not only victims of vaccine imperialism, but also cannot count on much financial support as their Covid-19 recessions drag on due to global vaccine apartheid.Developing countries have long been pressured to liberalise finance by the International Monetary Fund and the World Bank. The international financial institutions claimed this would bring net capital inflows.
With limited access to other finance, developing countries, especially LICs, face much higher borrowing costs, even in normal times. With the pandemic, developing countries have been downgraded by rating agencies, further raising borrowing costs. IMF debt service relief of about US$213.5 million for 25 eligible LICs ended six months later in mid-October 2020, as scheduled.
Meanwhile, some countries have used US$11.3 billion of IMF funds meant “for health budgets and food imports” to service private sector debt.Undoubtedly, distressed developing countries desperately need foreign exchange to cope. But IMF Managing Director Kristalina Georgieva’s call to boost global liquidity with “a sizeable SDR” allocation was blocked by the Trump administration, who objected that it would give China, Iran, Russia, Syria and Venezuela access to new funds.