IMF eyes new trust to provide aid

G7 leaders have welcomed an expansion of the global lender's emergency reserves, or Special Drawing Rights (SDRs), by US$650 billion.

15 June 2021 | Economics

Andrea Shalal - The International Monetary Fund is exploring creation of a new trust that could allow its members to lend their IMF reserves to more countries, including middle-income countries vulnerable to climate change, IMF chief Kristalina Georgieva has said.

Georgieva on Sunday said leaders of the Group of Seven rich economies had given the IMF a “green light” to keep working on the plan, and China - the world's second largest economy - had also expressed interest, along with middle-income countries that stand to benefit from such a fund.

She said the IMF would continue working on the "Resilience and Sustainability Trust" - which could help countries combat climate change or improve their health care systems - ahead of the July meeting of finance officials from the Group of 20 major economies, which includes China.

"Now we have the indication that we have a green light to go ahead, and we will reach out to others," Georgieva told Reuters in an interview after the end of the G7 leaders summit in Cornwall, England.

"China has expressed interest to participate, and I would expect there could be other emerging market economies with sound fundamentals and strong reserve positions that may also do the same," she said.

G7 leaders on Sunday said they welcomed an expansion of the global lender's emergency reserves, or Special Drawing Rights (SDRs), by US$650 billion, and backed a global target of providing US$100 billion to the most vulnerable countries, but said other countries should participate.

The IMF's Poverty Reduction and Growth Trust already allows members to share their IMF reserves, but small island states and other middle-income countries that have been hit hard by the coronavirus pandemic and significant economic downturns, are not eligible for funding through that IMF vehicle.

'MORAL IMPERATIVE'

Georgieva welcomed the G7's commitment to donate one billion Covid-19 vaccine doses as a key step toward ending the pandemic, and said discussions would continue within the G20.

The IMF has been urging rich countries to act, warning that a big divergence in the recoveries of advanced and developing economies could undercut demand and disrupt supply chains, which would also affect countries that are recovering faster.

"This is a moral imperative and an economic necessity," Georgieva said, adding that allowing the gap between rich and poor countries to continue to widen could also trigger unrest.

"We have seen in the past that divergence that leads to more inequality, it creates a breeding ground for more instability in the world," she said.

Georgieva said she would work with IMF members in the coming months on how they could re-allocate some of their SDRs or use budget loans to reach - or even exceed - the US$100 billion goal.

BUDGET LOANS

Countries could also use budget loans and other means to raise the money, she said, noting this was done successfully in the first year of the pandemic when the IMF sought donations for its Poverty Reduction and Growth Trust.

The IMF expects its board to formally approve the US$650 billion SDR allocation in August, paving the way for member countries to donate their unneeded reserves to others in need.

The previously unreported new trust could help broaden the effort and make funds available to more countries, and for broader initiatives, in line with global goals for combating climate change.

Eric LeCompte, an adviser to the United Nations and executive director of Jubilee USA Network, said the IMF's work on the new trust marked "significant progress" for many middle-income countries also hit hard by the pandemic.

"It means that more countries with needs can get aid and resources to get through the pandemic," he said. – Nampa/Reuters

Similar News

 

Electricity production capacity needs to improve

18 hours ago | Economics

PHILLEPUS UUSIKU For the month of June 2021, Namibia mainly imported its electricity from Eskom Aggeneis, Zesco-Firm Zambia and ZPC-Zimbabwe due to a decline in...

Nigeria's central bank ends dollar sales

18 hours ago | Economics

CHIJIOKE OHUOCHA AND LIBBY GEORGENigeria's central bank is halting dollar sales to exchange bureaus, saying they have become channels for graft and illicit flows of...

KwaZulu-Natal sets state of disaster

18 hours ago | Economics

The government of the province worst-hit by recent deadly unrest in South Africa on Thursday declared a state of disaster to divert funds towards recovery.Riots...

GIPF accepting funeral claims electronically

18 hours ago | Economics

The Government Institutions Pension Fund (GIPF) is delighted to inform their members and stakeholders that the Fund has amended the funeral claim submission procedure. GIPF...

IMF approves financing for Cameroon

18 hours ago | Economics

The International Monetary Fund (IMF) said on Thursday its board had approved a three-year financing deal for Cameroon worth US$689.5 million to help the Central...

Namibia’s tourism sector walking on thin ice

3 days ago - 30 July 2021 | Economics

PHILLEPUS UUSIKU Due to limitations to the number of people at gatherings, reduced opening hours for restaurants and bars and moreover travel restrictions, the tourism...

South Africa plans billions in relief

3 days ago - 30 July 2021 | Economics

ALEXANDER WINNING AND WENDELL ROELFSouth Africa plans about R36 billion of relief measures to support businesses and individuals affected by unrest this month and by...

SA unions agree to wage deal

3 days ago - 30 July 2021 | Economics

The majority of public sector unions in South Africa have signed a one-year wage hike deal, a cabinet minister said on Tuesday, as government looks...

Namibia’s economic recovery ‘disgraceful’

4 days ago - 29 July 2021 | Economics

Jo-Maré Duddy – Dragging vaccine roll-out and the re-imposition of some lockdown measures during the third wave of Covid-19, as well as lower than expected...

Govt caught with its pants down

4 days ago - 29 July 2021 | Economics

Jo-Maré Duddy – Government must open-up the import of Covid-19 vaccines to the private sector to fight the third wave, prevent a fourth and help...

Latest News

Weekend recap: Gazza postpones ‘Messiah’...

6 hours ago | Art and Entertainment

MICHAEL KAYUNDE WINDHOEK A day before he was meant to drop his 13th studio album, Gazza announced the postponement of ‘Messiah.’ “My mind, spirit...

We move - Jonas

18 hours ago | Sports

Jesse Jackson Kauraisa Namibian boxer Jonas Junias Jonas has hinted at a move...

Nathanael dethroned by ‘dodgy’ decision...

18 hours ago | Sports

Jesse Jackson Kauraisa MTC Nestor Sunshine Boxing and Fitness Academy promoter Nestor Tobias has revealed that the academy will wait for...

Electricity production capacity needs to...

18 hours ago | Economics

PHILLEPUS UUSIKU For the month of June 2021, Namibia mainly imported its electricity from Eskom Aggeneis, Zesco-Firm Zambia and ZPC-Zimbabwe due to a decline in...

South Africa’s Eskom in a...

18 hours ago | Business

ALEXANDER WINNINGA debt crisis at South Africa's struggling state-owned utility Eskom could be solved by an agreement for government creditors to write off some of...

Swapo sidesteps democracy

18 hours ago | Politics

JEMIMA BEUKES WINDHOEKThe questionable re-appointment of Paulus Noa as chief of the Anti-Corruption Commission...

China worries about terrorist attacks

18 hours ago | Police

JEMIMA BEUKES WINDHOEKThe Namibian police and other units in the country’s security cluster are on high alert after a bomb attack in...

Covid: Third wave not over...

18 hours ago | Health

JEMIMA BEUKES WINDHOEKWhile new cases have slowed down, authorities have cautioned Namibians not to let their guard down in the face of...

Can we please find a...

18 hours ago | Sports

Jesse Jackson Kauraisa This on and off sport in Namibia reminds me of stories I heard about relationships which are...

Load More