MOGC and partner organizations continue to push for debt relief for impoverished countries from the IMF and G20 during the COVID-19 crisis.This article was published in the March-April 2021 issue of NewsNotes.
The Maryknoll Office for Global Concerns and more than 215 organizations that are part of the Jubilee USA Network sent a letter to the G20 and IMF to issue $3 trillion in global reserves, known as Special Drawing Rights (SDRs). Spanning the globe, the signers argue that SDRs will help countries suffering from the coronavirus crisis and, "send a strong signal of renewed multilateral coordination..."
"For many countries, access to Special Drawing Rights is the only way to afford urgent coronavirus spending needs while avoiding a debt crisis," said Aldo Caliari, Senior Director of Policy and Campaigns of Jubilee USA Network, one of the letter drafters and leaders of the initiative.
On Feb. 26, G20 finance ministers met on the global coronavirus crisis response and called on the International Monetary Fund for a proposal on a general allocation of SDRs. The IMF responded immediately, stating that it would propose ways to improve the transparency and accountability of their use at their Spring Meetings in April – a move to address concerns raised by the United States.
“A new and significant allocation of SDRs would bring liquidity that countries urgently need and help stabilize their economies,” explained Patricia Miranda, Advocacy Coordinator of the Latin American network LATINDADD, another drafter of the letter.
Days before the G20 meeting, the U.S. Conference of Catholic Bishops and Jubilee USA Network sent a letter to President Biden also urging SDRs action. The letter encouraged the U.S. to lead on a range of global pandemic response efforts, including increasing development funds and expanding debt relief. The letter sent to Biden also raised the need to put in place measures to prevent another economic crisis from happening.
The Maryknoll Office for Global Concerns also joined a statement with a similar message to G20 nations, ahead of the G20 Finance Ministers meeting scheduled to be held on Feb. 26. Written by members of CIDSE, the Brussels-based network of Catholic social justice organizations, the letter calls for debt cancellation and financial support to the poorest countries impacted by COVID-19.
“As well as the tragic loss of life,” the CIDSE statement reads, “COVID-19 has stretched healthcare systems in many poor countries beyond breaking point, left millions of people without jobs and livelihoods, and decimated economies. It has exacerbated existing inequalities; whereby more powerful countries can use their position and power to secure access to vaccines and support their own economic recovery. It has compounded the challenges for many countries that were struggling with the impacts of climate change.
“The immediate priority for all countries is to save lives and support livelihoods, and debt cancellation is the quickest way to finance this. In the long-term, permanent debt restructuring and new finance is needed to rebuild societies and economies that put the needs of the poorest and most vulnerable people first, care for our common home, and tackle the climate crisis.
“We need to act in global solidarity as one human family, moving from a myopic focus of what is politically, financially and technically feasible, to concentrate on what is necessary to save lives and protect our planet for current and future generations.
“As Catholic Social Justice organizations we therefore call on G20 Finance Ministers to respond to the urgency of the current crisis with global cooperation, solidarity and leadership that is needed:
1. To support a new and significant issuance of $3 trillion Special Drawing Rights (SDRs) by the IMF, that will enable all countries to respond to the current COVID-19 crisis and support a just, sustainable recovery.
2. To extend the debt moratorium through the DSSI (Debt Service Suspension Initiative) for longer (at least 4 years) and to more countries, including those climate vulnerable countries who were already struggling to respond to added pressures of climate change.
3. To ensure that private creditors – who are currently continuing to take debt payments from countries who are struggling to respond to the needs of their citizens – are compelled to participate in all debt restructuring and debt relief.
4. To support a permanent debt workout mechanism to deliver timely, comprehensive, and fair debt restructuring to all countries with a high and unsustainable debt burden, without conditionality.”
Faith in action: Visit https://globalcovidresponse.org/ to learn more and to tell Congress to direct the U.S. Treasury to support IMF issuance of SDRs.
Cover photo credit: Friends of the Earth International – Creative Commons – CC-BY-NC-ND-2.0