okay so thank you very much professor gopinath for making the time for this chat and uh first of all i'd like to raise um the topic of this very interesting paper that you have just published with a clear proposal for essentially developed country to do more to help the vaccination campaign in the developing world and and you show very clear figures uh that it's not so much the rich versus the poor it's the vaccinated adversity and versus the unvaccinated can you give us a summary of your proposal and what's the rationale behind it first of all thank you federico firstly it's a pleasure to speak to you the proposal that we have put out firstly just recognizes what is obvious at this point that the economic crisis is not over until the health crisis is over and as public health officials have reminded us multiple times over the pandemic is not over anywhere the health crisis is not over anywhere until it's over everywhere so if you look at where the world is now in terms of the prospects of a durable end to the health crisis is unfortunately does not look good we are in a situation where we have the good news of multiple successful vaccines we also have the news that there is sufficient supply coming in the pipeline there's quite a bit of vaccine supply coming in the pipeline the problem of course is right now that vaccine is highly inequitable there are countries in the world where you have vaccinated 40 50 of the population and then you have countries for instance in africa where even the healthcare workers have not been vaccinated and if you project forward which is what we did in the proposal based on all the bilateral deals the regional deals the kovacs deals about what the world will look like in the end of 2021 unfortunately this deep inequality will persist so what we are providing in this proposal is three things one is targets that we think are plausible targets for every country to vaccinate at least forty percent of its population by the end of 2021 and at least 60 by the first half of next year and then we are providing very clear actions that are needed to accomplish that vaccination those vaccination targets but then also looking at what's needed on the financing side to make those actions happen and also the what's needed in terms of diagnostics and therapeutics to make sure that before we get to a point where we've actually ended the health crisis that there is enough tracking of what's happening with virus and mutations that there is enough diagnostics and therapeutics so that people can hide our ways and that whole proposal amounts to about 50 billion dollars or which you know in terms of billions might sound like a large number but the gain from having doing this uh these policies right and getting much faster end to this health crisis is about nine trillion dollars over the next four years so this is a very very it's it's completely obvious that it needs to be done and our hope is that this proposal which basically brings together many different aspects of the fight against the pandemic will play a useful role in addition to all the very useful very valuable work that's been done by the whole the world bank gabby the act accelerator and many other institutions who are we are now closely working with um you know while i was reading your paper um i couldn't help but thinking that developed countries are in a conundrum conundrum ah of course there are very good humanitarian reasons why they should do more and they should share their those extra doses with other countries that are not so fortunate but then even from a practical point of view uh there are conflicting interests there because the reason of course uh the eu the us canada the uk have over ordered and probably talking about europe we have at least twice as many doses are as are needed to cover with full courses the whole population the us is pretty much in a similar position and so on and so forth maybe canada is even more over ordered but we don't make a commitment to share because in the end in the back of a policy maker's mind is the idea that we don't know when we are going to need a booster shot so we don't want to get rid of the extra doses on the other hand if we don't we don't help africa vaccinate faster we increase the likelihood that there might be uh mutations there so and maybe one of the variants might be uh you know our vaccines might be ineffective against uh one of the new variants so it's it's a conundrum and how do you think it should be solved supposedly padrico if you uh if what we've done is we've looked at how much surplus vaccines have been ordered right so if you say every country is going to vaccinate 75 percent of its population which is way more than anybody has gotten to uh you know even taking into account vaccine hesitancy and everything this is we're looking at if you look at eight high-income countries um between them they have ordered excess of two billion doses right two billion dollars so even if they give up they only donate one billion of those 2 billion doses in our calculation that goes takes us a long way towards getting to this 40 target for low-income countries by the end of this year secondly there are certain vaccines that some countries are not going to use so for instance the us has about 80 million doses of astrozenica vaccine eight zero eighty yeah into zero exactly 80 million doses which are already stockpiled in in and produced are finished in wild then you have j which is also has a contract with the us and if you look at what's happened in terms of vaccinations in the u.s only about seven percent of the vaccinations are being with jng vaccine 93 percent is modern and bison but there are about 200 million engine doses that will come in the next uh next few months so basically there are also vaccines that countries will not use you can think there will be a booster but they will rely on mrna boosters these boosters will also likely be ones that have been adapted to maybe the flu vaccine flu to deal with the flu at the same time there will be you know it's not going to be the exact doses that exist so there is enough there is you know there is a lot of sources of millions of doses that can be donated even by august of this year and what is very important which is you know people flag a very important concern that many uh poorer nations don't have the infrastructure to be able to put those shots in arm very quickly even if you make the vaccine supply available and while agree with that which is why that's an important part of our budgeting about how you need to support that prep being prepared it's very hard to incentivize countries to put to start doing that preparation when they don't have a clear sense of when they will get a big supply of vaccinations right and so if countries could in the next weeks basically commit to okay by august you will be getting x number of vaccines i think countries can rev up preparation for it in anticipation of that and we see that for that that happened in a country like bhutan which did the preparation and in one week you know all of his high risk population was vaccinated so that's doable so that's so i think there is a lot and more to go around at this point and my i'm being i'm going to be a little more optimistic because i think now as you've seen vaccinations ramp up in the u.s and in europe that i think countries will also feel like okay they are now in a more comfortable position to maybe make these commitments okay um this is a very uh brave and also clear position that you're taking um and by the way i think the blog post was also signed amf director general so it it's meaningful um but something that you don't take as clear a position on is on the debate of whether there should be a trip's waiver essentially uh patents should be waived or not and we have an international debate on that the us the us with you know the administration have taken a position europe is much more hesitant you seem to be also hesitant not so much on the merits but you don't seem to be taking a very clear position in that paper on this issue where do you stand on that so uh my view is of course firstly i i support any initiative that's trying to leave no stone unturned in terms of ending this pandemic so it's very important to look at all possible avenues and the way there is one such avenue to to discuss and to figure out how you can what can be done on that front but this proposal that we have is we use the word it's a pragmatic proposal so we are in a bit of a race against time and what we know right now is that when it comes to vaccines it's not just about the waiver but it has to come with technology transfers too there are there is a timeline for that to happen uh and so i think these are important debates and discussions to have and it's and especially for the future in the next round and preparing for the next round of the pandemic but as of now i would say that the important constraints on the problem are the fact that there is inequitable distribution of the current supply of vaccines that's in the pipeline there are problems with supply chain uh breakdowns with the shortages of raw materials which has to be fixed and so if we can get these different pieces done then i think we're getting to the goal at least of ending this pandemic but again i think they're the bigger issue of uh waivers about what happens when you have a lot of public investment that led to the development of the vaccines what should be the pricing then or at which those vaccines are so these are all very good questions that should be discussed but we're focused on the here and now in this particular proposal okay okay okay um uh let's turn for a minute to not so much the you know the vaccination coming but the not only the economic consequences of the pandemic but also the economic policy consequences of depending on pandemic because one might argue that uh a big difference uh compared to you know the financial crisis uh 12 years ago is that or 13 years ago is that this time around issues around inequality as much more are much more keenly felt also by policy makers there is no doubt the pandemic has increased inequality even within developed countries but there is an interesting debate on taxation progressive taxation uh and also taxation of the over the top companies especially you know multi-technologic multinationals and so on um what do you make of this debate there is a proposal on the table by the u.s administration do you think this is a first step to reach an agreement at least within the g20 a very important lesson that's been learned from this pandemic and i think countries agree to is the fact that the future cannot look exactly like the past and so we want to build it towards a society that's more inclusive where there is sufficient production of public goods public services health education strong social safety nets uh so that was we know that countries that have this kind of uh these kinds of safety net these kinds of unemployment insurance or did much better in the pandemic than others did so once you know that and you're going to build forward to that kind of a society obviously the question is you will need the revenues for it to make sure that you can deliver on that on that kind of society and in addition the important work of dealing with the climate crisis building digital infrastructure so all of that is very valuable but we need sources of revenue for that so i think that's why it's very important this push to have a global minimum corporate tax is an important initiative i think there are clearly practical issues that one has to deal with in terms of what exactly that minimum tax rate is going to be but we know that for almost all countries regardless of what their actual corporate tax rate is the effective amount of corporate tax revenues that they collect is a tiny fraction of the actual tax rate so i think moving towards a global agreed uh minimum will be very useful in making sure you get the revenues that multinationals pay their fair share of taxes that also applies to the new kinds of digital economy and you know tax making sure that they are paying their fair share of taxes there are going to be countries especially low and middle income countries which have the unfinished business of making sure they have enough tax capacity right i mean in the past that has been a problem they're not able to collect enough tax revenues they have to continue doing that so in addition to progressivity they need to build up enough taxation capacity they need to accelerate that process uh and then i guess in terms of progressivity be it income tax pay property tax inheritance taxes carbon uh taxes carbon pricing is a very important part of the uh solution in terms of raising revenues so yes i think that you know to be consistent with countries agreed objective of having sustainable inclusive growth you need to have a tax revenue architecture that is consistent with that you cannot rely on deficits even if you're a country that can borrow very cheaply in the world this is not the last crisis there is going to be as we've known we've moved from the global financial crisis to this crisis and debt levels have just continued to rise so you will have to have a medium-term fiscal framework and revenue sources in addition to expenditure rationalization will have to play an important role this is this doesn't sound very much like the imf that i used to know when i was younger uh always preaching lower taxation uh on corporates uh anyway this is an interesting uh new development because the imf has been proposing and actually uh putting pressure on governments to actually spend more and don't care about deficits and public debt so much and and i think you have been taken even too seriously by some of the governments uh even in the us i was wondering whether you would like to compare the overall us fiscal response to the euro area fiscal response because okay it is very hard to compare because we know we have you know automatic stabilizers in europe that uh in the us are not necessarily there but there is a criticism that at your area would be doing too little compared to the us would you share that assessment supposedly first recall given how unique this crisis was it's a pandemic it's not a consequence of countries following unsustainable fiscal policies but it is it was very clear that this was the time the country's governments needed to spend to make sure that basic customer lives were saved livelihoods were saved and the economy was somehow kept as much intact as possible so that once the health crisis ends you can have a strong recovery in our most recent april economic world economic outlook we are now looking at a world where we're seeing very strong recoveries in different parts of the world so for instance in the us we are seeing a very strong recovery uh you i would describe the euro area for instance as following closely maybe with a few months lag and so therefore our recommendation at this point is that countries need to have well calibrated policies targeted you know calibrated to where they are in the recovery cycle and well-targeted measures right so that would be the that's been our prescription as of now and also to have some medium-term fiscal frameworks regardless of whether you're a country that is a reserve currency sure or not in your question in terms of the relative uh spending on the fiscal side indeed the u.s has done one of the largest amounts of fiscal consumers than any country advanced economy has done in i can't remember how long so you know that is having clearly accelerating the recovery in the u.s but if i think of uh the euro area relative to the to the us for me the big source of difference in terms of the speed of recovery comes one from the differential speed of vaccinations it does it now it's going well in the past it was going slower in the euro area and in the eu but i think they're catching up the eu is catching up and so that's going to happen something in a few months from now the second is that the stringency of lockdowns were harder in the in in the eu and also the behavioral reaction was such that you got much more negative effects let me give you a simple example for instance in january and february of this year when in the us and in uh the eu you had a big escalation of cases the u.s even the mobility did not you know mobility stayed where it was you saw the services sector recover very quickly while on the other hand that didn't happen in the eu uh and so we have a we had a recession in the first quarter for your area and you have very high growth in the us in the first quarter so that's another source of difference but i think these will iron out so i don't think it's the fiscal gap that's the source of the big difference in in our projections but it is the pace of vaccination uh and it's about adaptability of the different sectors to uh kind of low mobility and then i would of course add there is the eu recovery fund which is very important it's a it's a very large initiative if that rolls out as projected we would see stronger recoveries in very few minutes that were left um uh i'd like to ask about uh inflation there is a debate with people usually having opposite views some people are all over the place about the new concert the new inflationary era other people are pointing out that maybe this is a one-off effect and maybe semiconductors will be back to you know normal level of supply by september and this is essentially one uh single event that should not worry uh us too much where do you stand in this debate i think i'm closer to the second set of uh arguments uh for the so you may you placed it exactly right which is your concern that one's concerned about inflation is very closely tied to how much you think transitory increase inflation which we all expect will then shift inflation expectations in such a way that we're now in a new regime where people expect ongoing inflation to be at the kind of transitory inflation levels right it is hard based on every evidence that we've known over the last several decades and seeing where these disruptions are coming from where the inflation is coming from to make the argument that we will actually de-anchor inflation expectations and somehow move to that new regime so i think that that is uh you know if i had to bet i would bet on things behaving being perfectly regular in 20 to end 2022 23 for sure but there will be a transitory time when inflation will be higher but it will go back down it's not like it's going to go up and stay it's stay high now at the same time of course you know while i would put the highest probability on that particular outcome this is a very unique crisis we've seen anything like this before the recovery is very unique some of the supply bottlenecks seem to be lasting longer than we had expected it would so we have without defeat which ones can you mention so for instance i would say in terms of you know the semiconductor shortages which is you know we know that it takes time to build up new semiconductor facilities but as we as we should see people's demand moving away from goods towards services because that's part of the that's been part of the reason why you have such shortages that hopefully that will come will uh that shortage will get alleviated over time by the end of this year or so second is on commodity prices though we are nowhere near where it was in terms of prices oil prices but still there's been an increase in commodity prices an important part of that has been yes the increase in demand but also the fact that supply has been kept constrained uh so far right i mean you have the opec plus deal that is still an operation so that's an important factor so the question is how long will it take for these different pieces uh to change there's that uncertainty around that and whether that will feed into inflation expectations but yes i guess you know i'm in more in the camp of if i had to make a prediction it would be that things would be relatively well behaved in a year from now uh but i do see yes there are there are sesame risks okay thank you thank you very much very insightful and interesting i think in trento we will be discussing what you have just said a lot so thank you and have a good day there thank you so much thanks bye you