The EFSD and other regional financial arrangements analyse the response to the COVID-19 pandemic in their regions of operation
Moscow, 22 November 2021. The Eurasian Fund for Stabilization and Development (EFSD) and other regional financial arrangements (RFAs) have studied the response to the COVID-19 crisis in six regions covered by RFA operations.
The paper explores the economic impact of the pandemic, governmental response, and the actions of the RFAs, including the Arab Monetary Fund (AMF), the EFSD, the European Stability Mechanism (ESM), the ASEAN+3 Macroeconomic Research Office (AMRO) as the supervisory structure of the Chiang Mai Initiative Multilateralisation, the Latin American Reserve Fund (FLAR), and the EU’s Macro-Financial Assistance.
The authors also analysed changes to RFA tools and procedures that have been implemented or are being considered to effectively respond to specific shocks such as a pandemic.
The research found that the rapidly spreading COVID-19 crisis and the associated burden on health and social care systems, as well as the unprecedented uncertainty of economic development prospects, have posed challenges to the ability of the RFAs to provide effective and timely support.
That said, the RFAs were able to adapt swiftly to the challenges of the pandemic. They implemented one of three types of measures: 1) providing funds to support the governments’ programmes; 2) enhanced economic monitoring and promotion of institutional development (technical assistance); or 3) revision of RFA tools and regulations. In particular, the Latin American Reserve Fund has increased the amount of funding available. The ESM has raised credit support limits, which has helped to build confidence, stabilise financial markets, and reduce financial stability risks in the eurozone. The AMRO has strengthened its oversight and monitoring system. The AMF has provided financial assistance to states parties and adapted technical support programmes, while the EFSD has strengthened monitoring and approved emergency funding to the tune of US $650 million.
“All the RFAs actively engaged with the International Monetary Fund (IMF) and other Global Financial Safety Net (GFSN) institutions during the preparation and implementation of support and economic monitoring programmes, which increased the effectiveness of the GFSN response to the crisis. The IMF and EFSD are the leading sources of stabilisation financing in Eurasia,” said EFSD Executive Director Andrey Shirokov.
This is the second joint research by the RFAs. In 2018, the institutions reviewed various aspects of cooperation with the IMF. The RFAs conduct joint research to raise awareness of the policies and activities of stabilisation institutions.
It should be emphasised that the Fund analyses in its working papers the structure and effectiveness of the GFSN, especially in its region of operations. The respective working papers by the EFSD were published in 2020 and 2021.
Please use this link to access the publication Responding to the COVID-19 Pandemic: Economies, Policies and Institutional Changes.
The Fund’s publications are available here.
Additional Information:The Eurasian Fund for Stabilization and Development (EFSD) amounting to US$8.513 billion was formed on 9 June 2009 by the governments of the same six countries. The EFSD assists its member states in overcoming the consequences of the global financial crisis, ensuring their economic and financial stability, and fostering integration in the region. The EFSD member countries signed the Fund Management Agreement with Eurasian Development Bank giving it the role of the EFSD Resources Manager.
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