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How the IMF is trying to reduce the economic fallout of novel coronavirus

Restrictions intended to control the global outbreak of novel coronavirus continue to increase. In many countries, schools are closed, travelers face quarantine and business has ground to a halt. William Brangham reports and Judy Woodruff talks to Kristalina Georgieva, managing director of the International Monetary Fund, about how it is attempting to offset the economic implications of the virus.

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  • Judy Woodruff:

    Restrictions are escalating around the world tonight, in an effort to control the coronavirus outbreak.

    Schools are being closed. Travelers are facing quarantines. And even the Church of the Nativity in Bethlehem has been shuttered. In this country, Congress gave final approval today to an emergency funding measure, as the Washington state announced an 11th death, making 12 nationwide.

    William Brangham begins our coverage.

  • William Brangham:

    Another cruise ship stuck at sea because of coronavirus; 62 passengers are quarantined inside their cabins, anchored in San Francisco Bay, after a passenger from a previous voyage on the ship died of COVID-19.

    Elsewhere in the country, two new states had their first confirmed cases, Nevada and Tennessee.

  • Lisa Piercey:

    While we are saddened to learn that the virus has now reached Tennessee, our recent preparedness efforts that the governor just mentioned have positioned us to respond swiftly and thoroughly.

  • William Brangham:

    In Washington, D.C., the Senate Homeland Security Committee heard from administration officials on the federal preparation.

    Republican Chairman Senator Ron Johnson said, no response is perfect, but the Trump administration is doing all it can.

  • Sen. Ron Johnson, R-Wis.:

    The chances of the administration getting it just right, reacting perfectly, is zero. It won't happen. But, again, from my own knowledge, my own interaction, what we have seen in terms of the interaction with the Senate and the House, this is an all-government approach. This is all hands on deck.

  • William Brangham:

    Vice President Mike Pence, who is leading the response, echoed that sentiment during a trip to Minnesota.

  • Vice President Mike Pence:

    And we're going to continue to bring the full resources of the federal government to bear to confront the spread of the coronavirus.

  • William Brangham:

    But in a phone interview on FOX News last night, President Trump seemed to contradict guidance from public health officials about whether people should go to work if they think they have the virus.

  • President Donald Trump:

    We have thousands or hundreds of thousands of people that get better just by sitting around, and even going to work. Some of them go to work, but they get better.

  • William Brangham:

    And he cast some doubt on the latest projections from the World Health Organization about the virus's death rate.

  • President Donald Trump:

    Well, I think the 3.4 percent is really a false number.

    Now, this is just my hunch, and — but based on a lot of conversations with a lot of people that do this, because a lot of people will have this, and it's very mild.

  • William Brangham:

    And a senior health official today explained why the death rate could be lower.

  • Anthony Fauci:

    What the WHO numbers do not take into account the people that do not come in contact with medical facility. That's the reason between the difference of 2 percent of a 3 percent mortality and a model of what it might be, with a big range, if you counted people who are asymptomatic.

  • William Brangham:

    Other experts warn that going to work while infected is dangerous and could exacerbate this outbreak.

    Lawrence Gostin specializes in global health at Georgetown University.

  • Lawrence Gostin:

    It's very clear, from a public health perspective, that if a person has flu-like symptoms, they shouldn't go to work, they shouldn't go to school, because what we know about this coronavirus — and we know it very clearly from other countries and from the United States in King County, Washington — is, is that it spreads very rapidly in congregate settings, when people are crowded together.

  • William Brangham:

    Gostin also took issue with the general message the president gave last night.

  • Lawrence Gostin:

    I think the president's tone was to understate the seriousness of COVID-19. COVID-19, no matter what the fatality rate will be, will be orders of magnitude more deadly than the flu.

  • William Brangham:

    That threat is why so many cities are seeing school and workplaces are shutting down across the globe.

    In South Korea's Daegu City, which has born the brunt of that country's outbreak, usually bustling train stations were empty today. A few brave train riders kept their faces covered with masks.

    In Italy, primary school employees put up signs in Rome informing students class was out at least until March 15. Back in the U.S., the Senate passed an $8 billion emergency spending bill aimed at combating the virus domestically. The president is expected to sign that bill soon.

    For the "PBS NewsHour," I'm William Brangham.

  • Judy Woodruff:

    Economic worries over the outbreak weighed down Wall Street today and wiped out most of Wednesday's big gains.

    The Dow Jones industrial average lost 969 points, to close at 26121. The Nasdaq fell 279 points, and the S&P 500 dropped 106.

    The coronavirus outbreak is also increasingly straining the health care systems and economic resources of countries around the world. This week, the International Monetary Fund announced a $50 billion aid package intended to help various governments buy needed medical equipment and ease expected slowdowns in business activity.

    Kristalina Georgieva is managing director of the IMF, and she joins me now.

    Welcome to the "NewsHour."

  • Kristalina Georgieva:

    Thank you for having me.

  • Judy Woodruff:

    So, first of all, the question is, which countries are going to get this money?

  • Kristalina Georgieva:

    The $50 billion is made available to both low-income countries and middle-income countries that may be severely impacted by an economic slowdown, as well as the need to respond to this crisis.

    For the low-income countries, this is zero-interest loans. For the middle-income countries, the regular conditions of the IMF.

    What I want to stress is that what we want to make sure, Judy, is that people don't die just because of the lack of money, and businesses don't collapse only because of the lack of immediately available credit.

  • Judy Woodruff:

    So, how do you do that? What exactly are you expecting countries to do with the money?

  • Kristalina Georgieva:

    So, what we're doing at the moment are two things.

    We are engaging with governments to look at the countries that are at higher risk, either because their health systems are weak, or because they're commodity-exporting countries, and prices are going down, or they don't have fiscal space. They just have the money to be more aggressive.

    And, secondly, we are discussing with our sister institution the World Bank how we can collectively support countries to make the right decisions.

    And what we're telling everybody is, number one, invest in your health provision, especially targeted to more affected communities. Number two, immediately, put in place a plan, even if you don't yet need it, to help businesses and to help families to cope with economic impact, because what we have in front of us is a rather unusual shock that affects both demand and supply.

    And that requires — that requires a rather unusual set of measures that we want countries to put in place as quickly as possible.

  • Judy Woodruff:

    And you say as quickly as possible. So you're — I'm assuming you mean you have methods to get them the money unusually quick.

  • Kristalina Georgieva:

    Yes. Yes.

  • Judy Woodruff:

    But I also want to ask, how can you make sure they're using the money the way you want them to?

  • Kristalina Georgieva:

    Well, the — this is why we work with the World Bank as well.

    The World Bank difference from the IMF is grounded in countries. They have a lot of knowledge about health systems. They have a lot of staff personnel on the ground.

    And what we want is collectively to give policy recommendations, and then have these recommendations followed through. Because it is emergency financing, we can provide the resources virtually within weeks, even sometimes within days.

    But then there has to be support for countries, so they can spend this money wisely. And this is a case when the international community truly needs to come together.

  • Judy Woodruff:

    How confident are you right now that world leaders are addressing this as they should?

    One of the reasons I'm asking you is because there's a lot of conversation today about President Trump, for example, speaking about the mortality rate not actually being as high as it reportedly is?

    How do you assess how leaders are doing their jobs on this?

  • Kristalina Georgieva:

    There is clear recognition that we do need to work together.

    And we had Secretary Mnuchin, Chairman Powell, all the leading ministers of finance and central bank governors uniting and expecting from us, the international organizations, to be the platform to bring speed of action.

    We need to lean forward in this crisis with collective resources. And I want to make a very important point for our viewers now.

    We know, from previous health crises, that only one-third of the cost, the economic cost, of the crisis is from direct impact, people unfortunately dying, not going to work, production shrinking. Two-thirds of the impact is loss of confidence, uncertainty.

    So, we have a very important role, not only to act, but to communicate these actions, be together in the face of this uncertainty, so we can reduce the suffering and reduce the economic burden.

  • Judy Woodruff:

    Well, the seriousness is certainly coming across with what you are saying.

    Kristalina Georgieva, the managing director of the IMF, thank you very much.

  • Kristalina Georgieva:

    Thank you.

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