More than 130 organizations around the world urge the IMF to release a new issuance of SDRs to render Global Crisis Relief
More than 130 organizations representing health, labor, climate, development, humanitarian, and economic justice organizations send today a letter to the members of the IMF Board of Governors and Executive Board to urge the IMF to release a new issuance of #SDRs NOW to render #GlobalCrisisRelief.
“Dear members of the IMF Board of Governors and Executive Board:
We, the undersigned organizations, call for a major new general issuance of at least $650 billion worth of debt-free Special Drawing Rights (SDRs) by the International Monetary Fund (IMF).
The great majority of the world’s countries are struggling amid multiple historic, overlapping,
and generally worsening crises. The world’s wealthiest countries must act quickly to assist them by voting for a major new issuance of SDRs. As Pakistan’s central bank governor recently wrote, if rich countries do not act soon, “Poor countries will not easily forget how they were let down by a system that was meant to increase their living standards and protect them in an emergency.”
Even as the COVID-19 pandemic continues to kill thousands of people each week, and to infect millions more, low- and middle-income countries — many of which lack sufficient COVID vaccines — now face food, energy, and cost-of-living crises driven by the war in Ukraine,
corporate profiteering, and price-gouging. Climate disasters, and a rapidly warming planet,
worsen these crises and create new ones, while looming debt crises threaten many countries — driven in part by interest rate hikes by the U.S. Federal Reserve and by other central banks in
advanced economies that are making it much more expensive for borrowing countries to pay back their debts.
The enormity of these overlapping crises may be unprecedented in human history. The World Food Programme estimates that the number of people facing acute food insecurity has risen from 135 million to 345 million since 2019; in 2021 2.3 billion people in the world faced moderate or severe food insecurity according to a United Nations report. The IMF has downgraded its projections for global economic growth, with 2022 growth expected to slow to 3.2 percent, down from 6.1 percent last year. The UN Development Programme estimated that by July of this year, the rising cost of living had pushed an additional 71 million people into poverty. Mass anger triggered in part by these crises has fueled instability in many countries, even leading to the toppling of governments; more countries are likely to be rocked by political instability as daily life becomes more difficult.
SDRs have already proven to be an effective tool in responding to global challenges like these. Last year’s allocation was an important lifeline to many low- and middle-income countries facing major economic challenges, and whose populations are more exposed to multiple vulnerabilities. Over 100 low- and middle-income countries used SDRs in the first year after the
August 2021 allocation; 42 of which exchanged most of their SDRs for hard currency, around
$16 billion worth, and 69 of which included SDRs totaling over $80 billion in their government budgets or for other fiscal purposes.
While we support reforming how SDRs are allocated to better target vulnerable countries, including advancing a much-needed IMF quota reform, without the SDRs from last year’s issuance, many countries would likely be faring much worse today, and would be even less
equipped to respond to the new crises that have emerged in 2022. In Africa, 47 of 54 countries used the newly allocated SDRs in some way, and many countries used SDRs to directly respond to the pandemic by purchasing vaccines, for economic recovery purposes, by supporting social programs, or other means. Even those developing countries that did not use their SDRs to pay off debts or purchase vaccines benefited from the added security of strengthened foreign reserves.
But as important as these SDRs were, they failed to match the scale of the needs of developing countries even then; and the situation is significantly worse now.
A major new allocation of SDRs is the most direct and efficient response to assist countries
around the world in responding to these new crises, and to shocks yet to come. A new allocation of at least $650 billion would immediately make hundreds of billions of dollars available to nearly all low- and middle-income IMF member countries without debt or conditions and only requires political will on the part of the Fund’s board; particularly those members, like the U.S., Japan, China, Germany, and France, that have the largest voting shares at the IMF.
A new issuance would also help wealthier countries and the entire global economy by boosting demand for imports, thereby helping to create new export jobs among trading partners. Allowing vulnerable developing countries to succumb to hunger, debt, and cost-of-living crises, on the other hand, would dramatically increase the risk of social conflict and deeply undermine global
security. Ensuring global economic stability requires collective action. Supporting a new issuance of SDRs would be an easy way to assert global leadership, prove responsive to the needs of the developing world, prevent political unrest, and help support an equitable global economic recovery from this moment of dire need.
SDRs are a simple and effective way to deliver essential economic support to the great majority of countries around the world, at once. They do not cost the IMF member governments anything; nor do they contribute to inflation.
The International Chamber of Commerce; the UN Global Crisis Response Group on Food, Energy and Finance; the UN Economic Commission for Africa; UN Secretary-General António Guterres; the African Union; dozens of members of both chambers of the U.S. Congress; leading economists; and many more, have called for a new major SDR allocation to help provide relief
and support an equitable global economic recovery.
The global crises confronting humanity extend well beyond COVID-19 and some, most notably the climate crisis — with its effects on food production and availability of water, and attendant disasters, including droughts, floods, wildfires, worsened hurricanes, landslides, and other
calamities — pose an existential threat to human survival. We can’t afford to wait any longer to take action. The urgent and compounding crises around the world call for an urgent and proportionate response. SDRs are a crucial part of that response.
Signed,
AbibiNsroma Foundation, Ghana ACEP, Portugal
Action Corps, United States
ActionAid USA, United States
Adrian Dominican Sisters, United States AFL-CIO, United States
Africa Development Interchange Network (ADIN), Cameroon Africa Faith and Justice Network, United States
Al Hayat Center – RASED, Jordan
American Friends Service Committee, United States Amid Vision, Tunisia
Apostolic Ministerial International Network, Ghana Arab Watch Coalition, Middle East and North Africa
Association For Promotion Sustainable Development, India Association Jeunes Pour Jeunes (AJJ), Morocco
Association La Siesta Pour La Protection De L’Environnement, Morocco Association Tunisienne de Droit du Développement, Tunisia
ATED, Morocco ATGL, Tunisia
Bangladesh Institute of Human Rights (BIHR), Bangladesh Benedictines for Peace, United States
Bretton Woods Project, United Kingdom
Caribbean Policy Development Centre, Barbados
Center for Economic and Policy Research (CEPR), United States Center for Economic and Social Rights, Global
Center for Financial Accountability, India
Centre for Citizens Conserving Environment & Management (CECIC), Uganda Centre for Human Rights and Development, Mongolia
Centre for Muslim Youth In Peace And Development, Ghana
Centro de Derechos Económicos y Sociales — CDES, Andino – Amazónico
Centro de Documentación en Derechos Humanos “Segundo Montes Mozo S.J.” (CSMM), Ecuador
Centro de Estudios Legales y Sociales (CELS), Argentina
Centro de Investigacion Sobre Inversión y Comercio (CEICOM), El Salvador Chicago Area Peace Action, United States
Children and Women Organization, Iraq CNCD-11.11.11, Belgium
Congregation of Our Lady of Charity of the Good Shepherd, U.S. Provinces, United States Croatian Platform for International Citizen Solidarity (CROSOL), Croatia
Debt Justice UK, United Kingdom debtWATCH Indonesia, Indonesia
Demand Progress Education Fund, United States Development Alliance NGO, Mongolia
Diverse Voices and Action (DIVA) for Equality, Fiji Dominican Sisters of Hope, United States
EDER (Environnement, Développement et Énergies Renouvelables), Guinea Equidad de Género: Ciudadanía, Trabajo y Familia, Mexico
European Network on Debt and Development (Eurodad), Europe Focus of Disabled Persons, Kenya
Forum Solidaridad Perú, Peru FOSDEH, Honduras
Fossil Free South Africa, South Africa Freedom Forward, United States
Friends Committee on National Legislation, United States Friends of the Disabled Association, Lebanon
Friends of the Earth US, United States
Friends with Environment in Development, Uganda Fundación SES, Argentina
GCAP Africa, Kenya
Gender Action, United States
Gender-Based Violence as a Public Health Issue, Nigeria Generation Against Marginalisation, Tunisia
Global Call to Action Against Poverty (GCAP), Global Global Justice Now, United Kingdom
Global Policy Forum, Global
Good Health Community Programmes, Kenya Green Advocates International (Liberia), Liberia Green Armenia, Armenia
Grupo Nacional De Presupuesto Publico, Peru
Institute for Justice & Democracy in Haiti, United States Institute of Analysis and Advocacy, Ukraine
Institute of the Blessed Virgin Mary – Loreto Generalate, Global
Instituto Popular de Capacitación (IPC), Colombia International Chamber of Commerce, Global International Crisis Group, Global
International Trade Union Confederation, Global
International Women’s Rights Action Watch Asia Pacific (IWRAW Asia Pacific), Malaysia Jamaa Resource Initiatives, Kenya
Jobs With Justice, United States
Jubilee Scotland, Scotland, United Kingdom JUBILEO 2000, RED ECUADOR, Ecuador
Just Foreign Policy (JFP), United States Justice Is Global, United States
JusticeMakers Bangladesh, Bangladesh
Latin America Working Group (LAWG), United States Latinoamérica Sustentable, Ecuador
MADRE, United States
Maryknoll Office for Global Concerns, United States Medical Mission Sisters, Justice Office, United States Mennonite Central Committee U.S., United States
National Advocacy Center of the Sisters of the Good Shepherd, United States National Campaign for Sustainable Development Nepal, Nepal
National Society of Conservationists – Friends of the Earth Hungary, Hungary NGO ASRAD, Mali
NGO Forum on ADB, Asia
Northwest Coalition for Responsible Investment, United States Oxfam International, International
Oyu Tolgoi Watch, Mongolia Pakistan Fisherfolk Forum, Pakistan Partners In Health, Global
Pax Christi USA, United States
Phenix Center for Economic and Informatics Studies, Jordan PHM-K, Kenya
Plateforme Française Dette et Développement, France Reacción Climática, Bolivia
Recourse, The Netherlands
Red de Justicia Fiscal de América Latina y El Caribe, Regional
Red Latinoamericana por Justicia Económica y Social (LATINDADD), Latin America Red Mexicana de Acción frente al Libre Comercio (RMALC), México
RENICC, Nicaragua
Rivers without Boundaries Coalition, Mongolia RootsAction.org, United States
Rural Area Development Programme (RADP), Nepal School Sisters of Notre Dame CP JPIC Office, United States Sisters of Charity Federation, United States
Sisters of Charity of Leavenworth Office of Justice, Peace, and Integrity of Creation, United States
Sisters of Charity of Nazareth Congregational Leadership, United States Sisters of Charity of Nazareth Western Province Leadership, United States Sisters of Charity of Seton Hill, United States
Sisters of Mercy of the Americas – Justice Team, United States
Sisters of Saint Joseph of Chestnut Hill Philadelphia, PA, United States Sisters of St. Francis, Clinton, Iowa, United States
Sisters of St. Joseph of Carondelet, LA, United States
Sisters of St. Joseph-TOSF Social Justice Committee, United States Sisters of the Holy Names of Jesus Mary, Canada
South Feminist Futures, Zimbabwe Stop TB USA, United States
Studies and Economic Media Center, Yemen
The Society for Children Orphaned By AIDS Inc. (SOCOBA), United States Third World Network, Global
Unitarian Universalist Association, United States
United Church of Christ, Justice and Local Church Ministries, United States UP Center, Mongolia
WECF International, The Netherlands
Wedyan Association For Society Development, Yemen Wemos, Netherlands
Women Empowerment Against Poverty of Nepal (WEAPoN), Nepal Women’s Budget Group, United Kingdom
World Economy, Ecology and Development (WEED), Germany Yemeni Observatory for Human Rights, Yemen