How to afford it
We know what is required, but how do we pay for it?
Improving the efficiency of spending can yield better outcomes for people
even without expanding existing budget envelopes.
Despite significant challenges, Liberia, Malawi, Nepal, and the Solomon
Islands achieved sizable increases in tax revenues over a recent
decade—between 7 and 20 percentage points of GDP. Closing loopholes and
boosting the efficiency of tax systems offer opportunities for progress in
many countries.
For low-income developing countries, grants and concessional lending will
remain essential to supporting investments to enhance people’s skills and
boost productivity. For countries with moderate debt levels, borrowing may
be an option, especially if they can take advantage of relatively cheap
funding conditions. Egypt has recently completed two bond issuances
totaling $5.8 billion, $750 million of which was for a green bond—the first
in the Middle East—focusing on antipollution and renewable energy projects.
The IMF is focused on working with our members to help them develop and
afford policies for people. Our economic advice and capacity building
support increased and improved social spending, domestic revenue
mobilization, and more efficient and progressive taxation.
We have also provided financing at unprecedented speed and scale: more than
$100 billion to 81 countries, including 48 low-income nations. And we are
considering options to further adapt our lending toolkit so that we can
continue to serve our membership in the period ahead.
As the global economy embarks on its long ascent from the depths of the
crisis, one thing is clear: we will not go back to where we were. If we are
to overcome the crisis and shape the recovery, we must move forward with a
renewed sense of purpose and solidarity—with all people. Together,
we can achieve a more prosperous and more resilient world.
