FT News Briefing Covid-19 on emerging markets, possible oil tariffs
Apr 6, 2020
Emerging markets face dire economic struggles as the pandemic exacerbates existing challenges like falling commodity prices and dwindling tourism. There's a growing demand for assistance from the IMF as these regions navigate heavy debt. Meanwhile, U.S. banks are under scrutiny for their dividend plans amid the turmoil. The oil industry is caught in a price war between Saudi Arabia and Russia, raising concerns about potential tariffs from the U.S. and Canada, complicating OPEC discussions further.
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Emerging Markets Struggle
- 85 countries have requested IMF assistance due to the pandemic, double the amount after the 2008 crisis.
- Emerging markets face unique challenges, including collapsing commodity prices and investor withdrawals.
A Different Crisis
- Unlike the 2008 banking crisis, the pandemic affects the real-world economy, impacting emerging markets' exports.
- These markets are also more indebted and face a health crisis, increasing their vulnerability.
Seeking Assistance
- Emerging markets can seek assistance from the IMF and World Bank, who are backing debt payment deferrals and write-offs.
- Creating special drawing rights could provide additional funds to combat economic and health problems.