Open Letter to G20 Finance Ministers, Central Bank Governors and the IMF: Civil Society Organizations Call for Principles for Fair Channeling of Special Drawing Rights
As the pandemic exacerbates multiple crises in developing countries, Special Drawing Rights (SDRs) are a crucial option to help finance the COVID response and hasten an equitable and inclusive economic recovery. With the SDR distribution being proportional to IMF countries’ quotas, the new allocation of US$650 billion does not ensure sufficient SDRs go to developing countries.
This is why many have been calling for an allocation in the order of US$3 trillion. Moreover, advanced economies are in less need of SDRs given their access to a wider array of monetary and financial tools for the response and recovery. Thus, it is essential that the recent allocation be quickly followed by rechanneling a significant portion of advanced economies’ SDRs to developing countries.
We strongly believe that successful and equitable recovery is contingent on transparency and a participatory process inclusive of civil society in all countries. This also applies to international spaces making decisions on SDR channeling mechanisms, including the G20 and the IMF, where civil society has not had, so far, sufficient opportunities to engage on this matter.
We urge you to ensure SDR channeling options align with a basic framework of principles that many academics, experts and civil society colleagues around the world echoed over recent months.