As the International Monetary Fund plans to inject $650 billion into the global economy, Climate Home News recaps the recent developments in the plea for financial support for vulnerable nations, referring to the DRGR proposal.
“With US backing, the International Monetary Fund (IMF) is discussing issuing the equivalent of $650 billion in liquidity, known as special drawing rights (SDRs) into the global economy. As the US holds the largest voting power at the IMF, no decision can be made without its approval”, the comprehensive article reads.
After outlining that this allocation of IMF reserve would provide only a short-term response to the crisis, Climate Home News highlights that the “proposal pales in comparison to campaigners’ demands”.
It acknowledges the option to attach green criteria to debt relief to meet long-time development goals and tackle climate change, referring to the DRGR report:
“Finance and development experts are calling for a more comprehensive approach. A global debt relief blueprint ‘for a green and inclusive recovery’ has been backed by Mottley and UK former prime minister Gordon Brown.
It calls for debt relief to go beyond repayment suspension and include both public and private creditors, low and middle-income countries with support conditional on recipient nations committing to align their policies with the Paris Agreement and global development goals.
It includes proposals for green recovery bonds and for nations with sufficient fiscal space to invest their debt service payments into local climate and nature protection projects, known as debt swaps.
For [Jason] Braganza, [executive director of the African Forum and Network on debt and Development] of Afrodad, this must be the moment to address the power imbalance between rich and poor nations. The voice of African governments has to be included ‘as an equal player and a decision-maker rather than a decision-taker,’ he said.”
Read the whole article here.