ONE welcomes IMF’s decision to back $650 billion in SDRs

WASHINGTON – The ONE Campaign, the global anti-poverty organization co-founded by Bono, released the below statement following the news that the IMF Executive Board’s support for considering a new allocation of $650 billion in Special Drawing Rights (SDRs).

Gayle Smith, President and CEO of the ONE Campaign, said: 

“One year into the pandemic, we’re finally seeing the movement we need to manage the economic fallout from this global crisis.

“There have been only three general allocations in the history of the IMF. To undertake a general allocation now will help to provide the liquidity urgently needed by the world’s poorest countries. SDRs that are reallocated by the Fund’s wealthiest members can provide the capital needed to respond to the pandemic, fund vaccine rollout and stabilize and revitalize national economies.

“The news out of the IMF meeting signals a critical first step. Now G20 countries and other IMF members must agree on an ambitious reallocation package to ensure that SDRs help vulnerable countries withstand the economic shock of the pandemic.”

BACKGROUND:

• The ONE Campaign has been calling for a USD $650 billion issuance of IMF Special Drawing Rights (SDRs) coupled with a redistribution mechanism to support countries in need.
• Today, African Finance Ministers met and called for a comprehensive global response to COVID-19, including a new allocation of $500bn – $650bn in SDRs.
• Special Drawing Rights are a type of international reserve asset issued by the IMF that can be converted to hard currency. Allocated based on the size of a country’s economy, they are a useful tool to shore up liquidity and address foreign exchange shortages in a global emergency. For instance, in the wake of the 2008 financial crisis, the IMF allocated $250 billion in SDRs, which raised global reserves by 3%, including a raise of low-income countries’ reserves by 19%.