The COVID-19 pandemic has exacerbated already staggering levels of economic inequality in many countries around the world. Now there is a real risk that trillions of dollars meant to support those hardest hit by the crisis may be captured by the wealthy, increasing inequality as countries are saddled with public debt for money lost to corruption.
The International Monetary Fund (IMF) has lent US$89 billion to over 80 countries since March. The Fund has sought to ensure that its emergency assistance helps push back on the rising tide of inequality, with IMF Managing Director Kristalina Georgieva giving countries a road-map: invest in health and education, widen safety nets, and ensure access to food; address budget shortfalls through progressive taxation; and cut corruption and wasteful spending.
But there is little in the loan agreements to make governments heed that advice; some even include terms that could actually go against it.