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IMF Warns COVID-19 Could Cause Global Unrest

By Stefan J. Bos, Special Correspondent Worthy News

(Worthy News) – The International Monetary Fund (IMF) warns of global social unrest if government measures to halt the coronavirus pandemic are seen as unfairly favoring the rich. 

In its semi-annual Fiscal Monitor report, the global lender said protests are “more likely in countries with histories of widespread corruption.” The IMF added that nations with a “lack of transparency in public policy and poor service delivery,” also face potential unrest. The turbulence could happen if the impact of the virus COVID-19 outbreak is “perceived as insufficient or as unfairly favoring large corporates rather than people,” the IMF explained.

Its warning came while tensions emerged in South Africa, where police fired rubber bullets and teargas in clashes on Tuesday in Cape Town.

Township residents reportedly protested over access to food aid during a coronavirus lockdown. Reporters saw hundreds of angry people fighting running battles with the police, hurling rocks and setting up street barricades with burning tires to protest undelivered food parcels.

The IMF also expressed concerns about recent unrest over hikes in fuel prices in Ecuador, Haiti, and Iran. In France, people demonstrated against pension reforms and planned fuel tax increases. In Chile, “a small increase in public transport fares sparked social protests on much broader issues,” the IMF added. “New rounds of protests could exhaust reform momentum (for example, regarding pension or energy subsidies) and put public finances at risk.”

The authors urged governments to reduce the likelihood of unrest, including clear communication of policies, with advance notice of changes and the rationale for them. They also demand a strategy for overcoming opposition and steps to lessen the burden in advance of policies such as fuel price increases.

Governments have already spent nearly $8 trillion to combat the COVID-19 pandemic and its economic fallout. But more fiscal stimulus would be needed once the crisis abated, the IMF warned. The Group of 20 advanced, and emerging economies are at the forefront with actions totaling $7 trillion.