KARACHI: The Covid-19 has had a devastating effect on most countries which will increase global inequality across the world, said State Bank of Pakistan Governor Reza Baqir on Wednesday.

Speaking in a virtual panel discussion ‘Lasting Scars: The Global Impact of the Pandemic’, hosted by the World Bank, he said the multilateral institution is good in a normal situation but now the time has come to revisit it.

“Lockdown is a luxury for rich countries which economies like Pakistan can not sustain,” he remarked.

Baqir said the Internat­ional Monetary Fund had introduced drastic changes with elasticity in its credit lending after the financial crisis in 2007-08 and it is now time for the lender to show its leadership.

Heavily-indebted countries need big intervention from the lending agencies that could help them recover from the shocks of Covid-19, he said.

The governor presented the SBP’s initiatives to support the people and the businesses after pandemic hit the country. He said under Ehsas programme, 12 million people were supplied cash worth $900 million.

The SBP provided full support to banks with cheaper financing for lending to businesses and to protect jobs, which helped save 1m of them, he said.

Replying to a question, he said the country has a good database and the cash supply to people was appropriate while there may be some leakages but they are insignificant. Baqir added the government had already been providing cash through another scheme.

Published in Dawn, June 11th, 2020