South African police patrol the street during clashes with residents (not visible) of Tafelsig, an impoverished suburb in Mitchells Plain, near Cape Town, on April 14, 2020, after some people in the community did not receive food parcelsSouth African police patrol the street during clashes with residents (not visible) of Tafelsig, an impoverished suburb in Mitchells Plain, near Cape Town, on April 14, 2020, after some people in the community did not receive food parcels (AFP Photo/RODGER BOSCH)
Washington (AFP) - The economic stresses caused by the global coronavirus pandemic could spark an outbreak of protests, the International Monetary Fund warned Wednesday, urging governments to take steps to prevent unrest.
The IMF cautioned that "some countries remain vulnerable to new protests, particularly if policy actions to mitigate the COVID-19 crisis are perceived as insufficient or as unfairly favoring large corporates rather than people."
Already in South Africa, police on Tuesday fired rubber bullets and tear gas in clashes in Cape Town with township residents protesting over access to food aid during a coronavirus lockdown.
Hundreds of angry people fought running battles with the police, hurling rocks and setting up street barricades with burning tires to protest undelivered food parcels.
In its semi-annual Fiscal Monitor report, the IMF said protests are "more likely in countries with histories of widespread corruption, lack of transparency in public policy, and poor service delivery."
The report points to increasing waves of protests from the past two years over economic policies.
In Ecuador, Haiti and Iran, the protests were over hikes in fuel prices; in France, pension reforms and planned fuel tax increases. In Chile, "a small increase in public transport fares sparked social protests on much broader issues."
The authors urged governments to take steps to reduce the likelihood of unrest, including clear communication of policies, with advance notice of changes and the rationale for them; a strategy for overcoming opposition; and steps to lessen the burden in advance of policies such as fuel price increases.
"New rounds of protests could exhaust reform momentum (for example, regarding pension or energy subsidies) and put public finances at risk," the IMF said.
Governments have been pumping cash into their economies at a rapid rate: emergency lifelines provided globally include higher spending and foregone revenues ($3.3 trillion), public sector loans and equity injections ($1.8 trillion) and guarantees ($2.7 trillion), the report said.
The Group of 20 advanced and emerging economies are at the forefront with actions totaling $7 trillion.
- Keep the receipts -
IMF officials have stressed the need for a massive response to deal with the health crisis as well as its economic impact.
"The extension of this emergency lifeline to households and firms is absolutely crucial as an element to face this epidemic ... to avoid permanent damage," Vitor Gaspar, head of the IMF's Fiscal Affairs Department, told reporters.
The global deficit is expected to surge to 10 percent of GDP, more than 15 percent for the United States, 7.5 percent for the euro area, nearly 12 percent for China, according to the report.
Debt levels, meanwhile, are expected to rise to 96.4 percent of GDP from 83.3 percent last year, the IMF predicts, with the United States reaching levels of 131 percent and the euro area 97.4 percent.
But Gaspar called the pandemic a "temporary disturbance" and while authorities will need to wind down the measures once the crisis has passed, "countries have faced this type of difficulties in the past many times in the context of wars, and they have managed this type of challenges, quite aptly."
In times of emergency, policymakers must "do whatever it takes but make sure to keep the receipts," he said.