UN welcomes IMF decision to allocate $80 billion for poor countries

This Friday, the United Nations Secretary-General praised the IMF’s decision to allow special drawing rights to member countries, saying it could unlock US$80 billion in development assistance.

“This is an important and innovative step towards expanding financing for sustainable development,” commented António Guterres, quoted in a press release published this Friday by the UN on the decision of the International Monetary Fund (IMF) to allow the use of this capital. known by the English abbreviation SDR.

At issue is the possibility that development finance banks could receive funds from IMF member countries that have not been used since the $650 billion (about €597 billion) received in the wake of the Covid-19 pandemic, which may now turn according to the UN, up to 80 billion dollars or 73.5 billion euros.

These funds, which resulted from the allocation of “new capital” by the IMF, which was distributed among the fund’s member countries according to their quota, ultimately benefited the richest countries as they have a larger stake in the Fund.

The IMF administration has now decided that, from an accounting perspective, these funds can be directed to development banks or other designated SDR holders and at the same time remain in the accounts of these countries.

“This type of capital is a financial resource with a perpetual maturity, having characteristics of both equity and debt,” explained the UN statement, which said the IMF initiative “could immediately unlock up to $80 billion in much-needed resources for developing countries”. , including helping to combat the climate crisis.”

In his statement, Guterres calls on countries that are not using these SDRs to redirect them to multilateral development banks, which will buy them and then use them in the financial market to increase concessional loans to poorer states.