The International Monetary Fund (IMF) has stated that it will work with the Group of Seven (G7) to re-allocate $100 billion to boost post-pandemic recovery in some of the world’s poorest countries.
The Fund has welcomed the support extended by the G7 in expanding the fund’s emergency reserves by $650 billion. IMF managing director Ms. Kristalina Georgieva has said that the G7’s support for the IMF’s special drawing rights (SDRs) will help enhance global reserves and offer more room for essential fiscal expenditures to recover sustainably.
“Leaders also expressed a willingness to magnify its impact including through voluntarily channeling SDRs and or budget loans to reach a total global ambition of $100 billion for the most vulnerable countries. In the coming months, I will be exploring with our membership options on how, together, we can get this done. The renewed spirit of international cooperation was palpable, with the G7 stepping up its efforts to help the world exit this crisis. I can assure you that the IMF is playing its part.”
The fund’s $650 billion SDRs is one of the largest issuances and it will be used to aid some of the world’s poorest countries to free up resources to deal with the COVID-19 pandemic. It is seen as a crucial instrument in preventing an unequal global recovery, in which impoverished countries suffer from the pandemic’s effects while affluent countries recover at a considerably faster rate.
The fund last issued SDRs during the 2009 global financial crisis but Ms. Georgieva said earlier this year in a blog post that “repeating the move could help the world economy now.”
Recently, IMF has proposed a $50 billion plan to stop the pandemic by vaccinating at least 40 percent of people in every nation by the end of this year and 60 percent by mid-2022, in collaboration with the World Bank, the WHO, and the World Trade Organization.