COVID-19 spurred health, social and economic crises that hit developing countries the hardest. The pandemic deepened development and inequality challenges and erased years of progress on poverty reduction and women’s rights. Countries continue to face fallen revenues, lower foreign exchange earnings and higher fiscal and debt burdens. Many of these countries cannot afford expenditures vital to bring the pandemic under control, increase social protection to survive lockdowns and prepare to recover with equity and resilience. Of the trillions spent on stimulus packages around the world so far, wealthy countries account for 88 percent, while developing countries account for the rest.
A multilateral solution is needed. One that will not push low- and middle-income economies into further debt distress. To that end, we ask that you urgently support a new allocation of IMF Special Drawing Rights (SDRs) in the amount of US$3 trillion. We believe that an allocation of this size is required to address the real needs in a decisive and sustainable way. In 2009, the international community responded to a crisis of much smaller scope and proportions with an allocation of US$250 billion in Special Drawing Rights. This initiative had a significant role in restoring market confidence and supporting global recovery. Last year, even before the scale of this crisis was clear, IMF estimates placed emerging economies’ financing needs at US$2.5 trillion.