The ‘Great Finance Divide’

Over the last two years, the world economy has been rocked by multiple non-economic shocks, from the COVID-19 pandemic to the war in Ukraine. Climate-related disasters continue to increase in frequency and severity. Together, these events have had enormous socio-economic consequences due to the interrelated nature of economic, social and environmental risks. But not all countries and people have been impacted in the same way, in part because a financing divide is sharply curtailing the ability of many developing countries to respond to shocks and invest in recovery. The outbreak of COVID-19 delivered a seismic shock to the global economy, but developed countries were able to respond with aggressive macroeconomic policies.