Open letter to G20 Finance Ministers, Central Bank Governors and the IMF: Civil Society Organisations call for issuance of more SDRs and fairer distribution ahead
A group of 17 CSOs has issued an open letter to G20 Finance Ministers, Central Bank Governors and the IMF calling for a new US$2.5 trillion issuance of reserve assets called Special Drawing Rights (SDRs), and reformed criteria for distributing them in a fairer way and according to needs.
The letter was sent ahead of a meeting of the IMF board on Wednesday (13 April), where the fund’s current plans to channel SDRs through the newly created Resilience and Sustainability Trust (RST) will be discussed.
The open letter says: “Early last year we called for an allocation of IMF Special Drawing Rights in the amount of US$3 trillion. Last August, the IMF allocated $650 billion. SDRs received, without conditions and additional debt burdens, soon became the most impactful tool developing countries effectively accessed amidst insufficient support for crisis response.”
However, it goes on to state that “because of the rules governing their distribution, more than $400 billion in SDRs went to advanced economies that do not need them.” Furthermore, the mechanisms used to redistribute the funds have thus far fallen far short of the rechanneling principles laid out by CSOs in a timely fashion, and this includes the IMF’s Resilience and Sustainability Fund.
The CSOs are urging decision-makers to both allocate an additional US$2.5 trillion in SDRs and take several steps to reform the current and proposed systems for rechanneling them.
- Reform of the criteria for distributing SDRs, currently based on an inequitable quota system, to focus instead on needs and vulnerabilities of recipients.
- Agree on triggers for future allocation based on need.
- A fair and speedy SDR rechanneling from advanced to developing economies, without imposing policy conditions.
- IMF channels like the RST must delink eligibility from having another IMF program, prioritise country ownership and transparency, and refrain from tying financing to harmful policy conditionalities, particularly those focused on fiscal consolidation.
The letter concludes: “We stand ready to work with you on the examination of all these measures, and in their implementation, and ask that you create proper channels for ongoing consultation on them with civil society at all levels.”
- African Forum and Network on Debt and Development (AFRODAD)
- Bretton Woods Project
- Caritas Africa
- Center for Economic and Policy Research
- Christian Aid
- European Network on Debt and Development (EURODAD)
- Financial Transparency Coalition
- Global Call to Action against Poverty - GCAP
- Global Policy Forum I
- Initiative for Social and Economic Rights - Uganda
- Jubilee Debt Campaign -UK
- Latin American Network for Economic and Social Rights (LATINDADD)
- Social Justice in Global Development
- Third World Network
- World Economy, Ecology and Development (WEED)
Media contact: Julia Ravenscroft, Communications Manager, Eurodad: [email protected]/ +44 7958 184 695.