SUBSCRIBE NOW

SIGHT

Be informed. Be challenged. Be inspired.

Global powers unleash trillions of dollars to stem spiralling coronavirus crisis

Washington DC, US/London, UK
Reuters

The world’s richest nations prepared more costly measures on Tuesday to combat the global fallout of the coronavirus that has infected tens of thousands of people, triggered social restrictions unseen since World War Two and sent economies spinning toward recession.

With the highly contagious respiratory disease that originated in China racing across the world to infect more than 190,000 people, governments on every continent have implemented draconian containment measures from halting travel to stopping sports and religious gatherings. 

Coronavirus US Man in Manhattan

A man covers his face while walking on the streets in the Manhattan borough, following the outbreak of the coronavirus disease (COVID-19), in New York City, US, on 15th March. PICTURE: Reuters/Jeenah Moon

While the main aim is to avoid deaths – currently at over 7,500 – global powers were also focussing their attention on how to limit the inevitably devastating economic impact. 

In the world’s biggest economy, the United States Senate prepared to consider a multibillion-dollar emergency spending bill to offer relief from the pandemic, but the Trump administration pressed for $US850 billion more.

WORLD BANK ADDS $US2 BILLION TO FUNDS AVAILABLE FOR CORONAVIRUS RESPONSE

The World Bank on Tuesday said it had increased to $US14 billion the amount of fast-track financing available to members to respond to the global coronavirus pandemic, adding $US2 billion to an initial package announced on 3rd March.

The change will give the World Bank’s International Financing Corp a total of $US8 billion to support private companies and their employees hurt by economic from the disease, the bank said.

It said the bulk of the funding would be used by client financial institutions so they can continue to offer trade financing, working capital and medium-term financing to private firms struggling with disruptions in supply chains.

IFC said the funding would also help existing clients in tourism, manufacturing and other heavily affected sectors keep paying their bills, while aiding the healthcare industry as it races to meet surging demand for services, equipment and drugs.

World Bank President David Malpass said the bank was committed to provide a fast and flexible response by developing countries to the rapidly evolving crisis caused by the virus.

“It’s essential that we shorten the time to recovery,” Malpass said. “Support operations are already underway, and the expanded funding tools approved today will help sustain economies, companies and jobs.”

More than 187,700 people have been infected by the coronavirus in 162 countries, and 7,495 have died, according to a Reuters tally.

Philippe Le Houero, chief executive officer of the IFC, said the institution’s goal was to help clients sustain their operations during the current health emergency phase so they could help economies recover more quickly later.

IFC is the largest global development institution focused on the private sector in emerging markets and works with 2,000 business worldwide. In fiscal 2019, it delivered more than $US19 billion in long-term financing for developing countries.

– ANDREA SHALAL, Reuters

Airlines are among the worst-hit sector, with US carriers seeking at least $US50 billion in grants and loans to stay afloat as passenger numbers evaporate. 

Britain, which has told people to avoid pubs, clubs, restaurants, cinemas and theatres, unveiled £330 billion rescue package for businesses threatened with collapse.

Budget forecasters said the scale of borrowing needed might resemble the vast amount of debt taken on during the 1939-1945 war against Nazi Germany.

“Now is not a time to be squeamish about public sector debt,” Robert Chote, head of the Office for Budget Responsibility, told lawmakers.

Queen Elizabeth to move
Underlining how the crisis has shaken even the most august of institutions, Britain’s Church of England suspended services while 93-year-old Queen Elizabeth was to move from Buckingham Place to Windsor Castle outside London. 

France is to pump €45 billion of crisis measures into the economy to help companies and workers, with output expected to contract one per cent this year.

“I have always defended financial rigor in peacetime so that France does not have to skimp on its budget in times of war,” Budget Minister Gerald Darmanin was quoted as saying by financial daily Les Echos.

The European Union eased its rules to allow companies to receive state grants up to €500,000 or guarantees on bank loans to ensure liquidity.

Such promised cash splurges did not, however, enable world share markets or oil prices to shake off their coronavirus nightmare after Wall Street on Monday saw its worst rout since the Black Monday crash of 1987.

The Philippines was the first country to close markets, while Europe – now the epicentre of the pandemic – saw airline and travel stocks plunge another seven per cent.

With various central banks around the world having cut interest rates to try and help beleaguered economies, investors fret that they may have used up their policy ammunition early with far longer to go before the global health crisis is curbed. 

A global recession beckons, with parallels to the 2008 financial crisis, economists say, though many predict a quick bounce back once the outbreak clears.

Euros, Copa America off
Sports events continued to fall by the wayside. 

Soccer’s 2020 Euros were postponed for a year, while South America’s Copa America was also put back to 2021.

Pakistan suspended its cricket Super League after an overseas player developed symptoms of coronavirus, the Kentucky Derby horse race was postponed from May until September, and there was continued speculation over the fate of the Olympics in Japan.

Around the world, bad news was relentless.

Brazil recorded its first coronavirus death while Peru put its military on the streets. 

Israel’s government authorized the Shin Bet security service to use cellphone-monitoring technology usually used for anti-terrorism to retrace movements of infected people.

Iran temporarily freed about 85,000 prisoners. 

Daily life was turned upside down for millions worldwide. 

“Everything has ground to a halt,” said Tiziana Marra, a wedding planner in Europe’s worst-hit nation Italy, where the epidemic has created havoc for nuptials. 

“It is as if people are preparing for war,” said an astonished shopkeeper in Rwanda, as panicked consumers clamoured to stock up on rice, cooking oil, sugar and flour.

“Prices have gone up – but still they buy.”

– Additional reporting by DOINA CHIACU, MARIA CASPANI and SUSAN HEAVEY in Washington; ANDREW MACASKILL in London; LEIGH THOMAS, GEERT DE CLERCQ, BENOIT VAN OVERSTRAETEN and CAROLINE PAILLIEZ in Paris; PHILIP PUELELLA and NOOR ZAINAB HUSSAIN in Rome; CLEMENT UWIRINGIYIMANA in Kigali; CATHERINE CADELL in Beijing.

Donate



sight plus logo

Sight+ is a new benefits program we’ve launched to reward people who have supported us with annual donations of $26 or more. To find out more about Sight+ and how you can support the work of Sight, head to our Sight+ page.

Musings

TAKE PART IN THE SIGHT READER SURVEY!

We’re interested to find out more about you, our readers, as we improve and expand our coverage and so we’re asking all of our readers to take this survey (it’ll only take a couple of minutes).

To take part in the survey, simply follow this link…

Leave a Reply

Your email address will not be published. Required fields are marked *

For security, use of Google's reCAPTCHA service is required which is subject to the Google Privacy Policy and Terms of Use.