Jubilee USA Network, Oxfam and 215 other civil society groups on Wednesday urged Group of 20 finance officials to back an issuance of $3 trillion of the IMF’s own currency, or Special Drawing Rights, to help countries weather the COVID-19 pandemic.
In an open letter to the International Monetary Fund and G20 finance ministers, the groups said a new allocation of SDRs would boost the reserves of all countries and avoid pushing low- and middle-income countries further into debt distress.
G20 finance ministers and central bankers will discuss a possible SDR issuance – a move akin to a central bank printing money – when they meet by video conference on Friday. Proponents note that such a move will not add cost for the IMF members.
Italy, which leads the G20 this year, is pushing for a smaller $500 billion allocation of SDRs, which can be converted to hard currency by IMF members – a move backed by France, Germany and others, but still lacking support from Washington.
The United States had opposed such a move under former President Donald Trump, but has not yet communicated a firm position on a new SDR allocation under President Joe Biden.
Treasury has declined to comment on the issue.
IMF Managing Director Kristalina Georgieva on Wednesday also called for the G20 to take strong policy action to reverse a “dangerous divergence” that she said threatened to leave most developing economies languishing for years.
In a blog ahead of Friday’s meeting, Georgieva said a new SDR allocation would substantially boost countries’ liquidity without increasing their debt burdens. It would also expand the capacity of donor countries to provide new resources, she said.
Religious groups have also weighed in. On Tuesday, the U.S. Conference of Catholic Bishops and Jubilee USA Network urged President Joe Biden to back a $3 trillion allocation to help poor countries bolster U.S. trade with the developing world.
Anti-poverty group ONE on Wednesday backed an allocation of $650 billion.