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The Guardian view on the global crisis: where is the rescue and recovery plan? (The Guardian)
June 12, 2020
An article in the Guardian links to Mark Plant's paper calling for the IMF to allocate Special Drawing Rights (SDRs). From the article:
No country is emerging unscathed from the Covid-19 pandemic, but the impact on the world’s poorest countries is especially severe. Extreme poverty is on the rise and underfunded health systems are woefully ill-prepared to cope with the virus. The number of children in Africa dying of preventable diseases is increasing. The gains made in development since the turn of the millennium are being reversed...
As a result, the IMF and World Bank have to act as the finance ministry and the central bank for those countries that can’t go it alone. To fulfil this role, they need to be properly resourced. The IMF has its own way of creating money, known as special drawing rights, which can be converted into hard currency by member countries. There has rarely, if ever, been a stronger case for a new allocation of SDRs. This is also the time for the World Bank to be tripling both its regular lending and the soft loans and grants it provides to the world’s 76 poorest countries through its International Development Association. Credit guarantees from major shareholders would facilitate this.