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Pandemic exacerbates inequalities and could fuel unrest, IMF warns

The coronavirus pandemic has worsened long-standing inequalities around the world, an issue that, if left unaddressed, could undermine economic stability and lead to social unrest, the International Monetary Fund (IMF) warned on Thursday.

The poorest families have been particularly hard hit, and the damage to education could last for years, the IMF said in a report released ahead of spring meetings next week.

The findings show that the warnings economists made last year have been heeded. “Covid-19 has exposed and exacerbated pre-existing inequalities in income and access to basic public services, as well as healthcare and vaccination, both within and between countries,” the report states.

During the pandemic, education has been particularly affected. “Interruptions in education threaten social mobility by having lasting effects on children and young people, especially those from poorer households,” the IMF notes.

Increasing dependence on work and digital education, he argues, worsens the impact, making it difficult for low-skilled workers to find work.

“In this context, societies may experience increasing polarization, erosion of trust in the government or social unrest,” the IMF warned.

The report advocates raising some taxes and improving revenue to provide revenue for an improved social safety net.

On the eve, US President Joe Biden proposed raising corporate taxes to pay for massive infrastructure and a jobs program.

The authors, David Amaglobeli, Vitor Gaspar and Paolo Mauro, indicated in a blog post that they called on governments to “give everyone a fair chance of prosperity” by improving access to quality healthcare, vaccines, education and jobs. .

In addition, they suggested that countries could rely more on property and inheritance taxes, increase the burden on the wealthiest, and eliminate tax loopholes, as well as “modernize corporate income taxes.”

Governments could also consider introducing “temporary recovery contributions” for COVID-19 for high-income households, they said.

Using these funds for key social programs can have “a powerful effect” at a time when “up to six million children in emerging market and developing economies could drop out of school in 2021, with adverse consequences for life. “.


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