New analysis shows the economic crisis caused by Coronavirus could push over half a billion people into poverty unless urgent and dramatic action is taken. This virus affects us all, even princes and prime ministers. But the equality ends there. By exploiting the extreme inequalities between rich and poor people, rich and poor nations and between women and men, unchecked this crisis will cause immense suffering.
We can only beat this virus through coming together as one. Developing countries must act to protect their people, and demand action from rich nations to support them. Rich country governments must massively upscale their help – led by the G20. This paper lays out an Economic Rescue Plan For All that meets the scale of the crisis, mobilizing at least $2.5 trillion dollars to tackle the pandemic and prevent global economic collapse. It prioritizes helping people directly: giving cash grants to all who need them. An immediate suspension of the debt payments of poor countries, combined with a one-off economic stimulus by the IMF and an increase in aid and taxes, can pay for this.
The key points of the ‘Economic Rescue Plan For All’ would be:
1. To provide cash grants for all who need them. All workers suffering a loss of income must have access to some form of income replacement, be it a wage subsidy, unemployment benefit, sick pay or other benefits.
2. Bail out businesses responsibly. The stimulus packages announced in response to the pandemic must not make the same mistakes as were made in the 2008 financial crisis. Instead, bailout money must go into the hands of the most vulnerable people – workers and small businesses who are the least prepared to cope.
3. Suspend and cancel debts. Cancelling debt payments is the fastest way to keep money in countries and to free up resources to tackle the urgent health, social and economic crises resulting from the global pandemic.
4. Issue Special Drawing Rights. The G20 should immediately propose an emergency issuance of $1 trillion in SDRs.
5. Increase aid now. Donors should provide immediate emergency support to limit the outbreak and save lives, both through multilateral bodies like the World Health Organization that are responsible for managing the global response and directly to developing countries.
6. Adopt emergency solidarity taxes. Governments must make use of extraordinary measures to tax those who can afford to be taxed, in order to fund the global health package and the global economic relief measures.
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