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Nueva Arquitectura Financiera Todos

Civil society calls for new IMF Special Drawing Rights allocation at COP28, with fairer distribution to countries in need

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DUBAI — At COP28, 144 civil society organizations, academics and experts are calling for world leaders to make IMF Special Drawing Rights a core tenet of the response to the climate crisis. A new letter launched today urges:

  • A new $650 billion issuance of SDRs for immediate global relief, and regular, periodic SDR issuances to support climate investments; 
  • The creation of targeted future allocations that distribute SDRs more effectively toward all low- and middle-income countries; 
  • Reforms to broaden SDR rechanneling mechanisms while minimizing debt and conditions attached to their use.

A growing number of developing countries are spending more on debt service than on climate and social spending, combined. Loss and damage from climate change is already costing climate vulnerable countries nearly $200 billion per year. Despite the G20’s commitment to rechannel $100 billion in SDRs in October 2021, as of October 2023 just $702 million of these funds had actually reached vulnerable countries.

The letter notes the need for a new $650 billion issuance of Special Drawing Rights to help meet urgent and climbing financing needs for developing countries in ways that won’t create additional debt burdens and undue policy conditionality.

At this time of crisis, the letter calls for action on SDRs to go much further than that. How Special Drawing Rights work and how they are distributed is decided according to an unequal global financial architecture. The Vulnerable Twenty (V20) group of countries notes that 68 climate-vulnerable members, while accounting for “21.7% of the global population and 44.7% of IMF programs, have only 5.3% of IMF votes. This unbalanced system harms V20 countries in the allocation of Special Drawing Rights (SDRs).”

The fact that the allocation of SDRs is pegged to the IMF’s quota system means that they are distributed first to those who need them least.

This quota system, rooted in colonial legacies, also determines that those same countries hold the largest voice in IMF decision-making. In a few days’ time, it is expected that the IMF’s Governors will again conclude a general review of quotas without realignment of IMF quota shares.Given the failure of the IMF’s quota review to give a greater voice to climate vulnerable countries, we must call for more ambition at COP28. We can – and must – decide now to change the rules to create an international reserve currency system that works for people and the planet.

Quotes:

“Our countries are already living the climate crisis impacts despite not being the main actors responsible for the CO2 emissions. It is not fair to increase our debt levels to tackle the climate crisis. We need access to additional and no-debt-creating financing through Special Drawing Rights allocations, to finance the climate agenda.” – Patricia Miranda, Latindadd

“Considering the failures and inefficiencies of the current climate finance architecture and the urgency to act now, SDRs could be a new instrument to provide fast and non-debt creating funding for the climate agenda; we call negotiators and authorities gathered at COP28 to consider this option, specially in the framework on the definition of a new climate finance goal for 2025 onwards”. – Carola Mejía, Latindadd

“As we address the climate crisis, the call for a $650 billion issuance of Special Drawing Rights highlights the need for a more equitable global financial system. It’s crucial to rethink distribution mechanisms to ensure all nations, particularly vulnerable ones, receive adequate support. Reforming the IMF’s governance and quota system is essential for a fair and effective response. To survive the global crisis, the global economic system has to start to respond to the nations in need, not to the wealth interests, to guarantee a sustainable future” – Shereen Talaat, MenaFem Movement for Economic, Development and Ecological Justice

“At a time when international negotiations are failing to provide even the minimal climate finance required urgently in most of the world, issuing more of the IMF’s SDRs is a relatively easy and low-cost option, with no downsides.” – Prof. Jayati Ghosh, University of Massachusetts Amherst

“Current SDR rechanneling mechanisms like the IMF’s Resilience and Sustainability Trust (RST) include climate policy conditionalities that transfer the costs to the most vulnerable. According to the RST operational guidance note, countries that implement natural resource pricing and the creation of water markets will receive more money. We need a new issuance of SDRs, and conditionality-free rechanneling.” – Federico Sibaja, Recourse

“Developing countries need fiscal space to tackle crises like climate change. Another issuance of SDRs is urgently needed to provide liquidity without increasing external debt. But this must be accompanied by major reforms to make the economic system centered on care for people and the planet.” – Niranjali Amerasinghe, ActionAid USA

“Special Drawing Rights – while not a silver bullet – can play an important role in confronting the current polycrisis. As the UN Secretary General has noted, the way in which SDRs allocations work could be reformed to make them more needs-based, and less dependent on the political whims of the IMF’s executive board. What is lacking is political will from the IMF’s wealthiest shareholder countries to consider a fresh $650 billion SDRs allocation, or to pursue reforms that would make SDRs fit for purpose to tackle 21st century challenges.” – Jon Sward, Bretton Woods Project

Signatory organisations:

  • Red Latinoamericana por Justicia Económica y Social, Latindadd
  • Global Call to Action Against Poverty (GCAP)
  • MenaFem Movement for Economic, Development and Ecological Justice (MenaFem)
  • Global Policy Forum Europe
  • WEED – World Economy, Ecology & Development
  • Bretton Woods Project
  • Jubilee USA Network
  • Center for Economic and Policy Research (CEPR)
  • Recourse
  • European Network on Debt and Development, Eurodad
  • ActionAid International
  • 11.11.11, Belgium
  • 350.org, Global
  • AbibiNsroma Foundation , Ghana
  • Action Corps, USA
  • Alianza Por la Igualdad de América Latina y el Caribe, Alianza Regional América Latina
  • Alternative Law Collective (ALC), Pakistan
  • American Friends Service Committee, USA
  • Argentina 1.5, Argentina
  • Asociación Generaciones de Paz (ASDEPAZ), El Salvador
  • Baltimore Nonviolence Center, USA
  • Bank Climate Advocates, USA
  • BARAC UK, United Kingdom
  • BNSK ( A grassroot level women migrant workers Association), Bangladesh
  • Bristol Airport is Big Enough (BABE), United Kingdom
  • Budget Advocacy Network, Sierra Leone
  • CAFOD, UK
  • Caribbean Policy Development Centre, Caribbean
  • CCFD-Terre Solidaire, France
  • Center for Economic and Social Rights (CESR), United States
  • Centre for Citizens Conserving Environment & Management (CECIC), Uganda
  • Centre for Environment, Human Rights & Development Forum – CRHRDF, Bangladesh
  • Centro de Documentación en Derechos Humanos “Segundo Montes Mozo S.J.” (CSMM), Ecuador
  • Christian Aid, United Kingdom
  • Civil Society SDGs Campaign GCAP, Zambia
  • Climate Action Network International, Global
  • Climate Action Network Latin America (CANLA), Latin America and the Caribbean.
  • Climate and Community Project, USA
  • Coalición de Tendencia Clasista (CTC-VZLA), Venezuela
  • Congregation of Our Lady of Charity of the Good Shepherd, U.S. Provinces, United States
  • Consejo de Jóvenes de Oaxaca, México
  • Consejo Nacional de Planeación – Sector Afrodescendiente, Colombia
  • Consejo Regional Indígena del Cauca (CRIC), Colombia
  • Contribution à l’Education de Base, Niger
  • Debt Justice UK, United Kingdom
  • Development Finance International, United Kingdom
  • Disability Peoples Forum, Uganda
  • Ecology Africa Foundation,South Africa
  • EDER (Environnement, Développement et Énergies Renouvelables), Guinée
  • Ekumenická akademie (Ecumenical Academy), Czech Republic
  • Equidad de Género: Ciudadanía, Trabajo y Familia, Mexico
  • erlassjahr.de, Germany
  • Euro-Mediterranean Economists Association, Spain
  • Fast For the Climate, International
  • FENTAT SUNAT, Perú
  • Financial Justice Ireland, Ireland
  • Fomento de la Vida – FOVIDA, Perú
  • Foro Social de Deuda Externa y Desarrollo de Honduras
  • Foundation for Integrative AIDS Research (FIAR), United States
  • Friends of the Earth US, US
  • Fundación Ambiente y Recursos Naturales (FARN), Argentina
  • Fundación para el Desarrollo de Centroamérica (FUDECEN), El Salvador
  • Gatef organization, Egypt
  • Gender Action, Global
  • Gestos, Brazil
  • Gestos / CSO WG for the 2030 Agenda, Brazil
  • Global Consultrant SC, México
  • Good Health Community Programmes, Kenya
  • Green Economy Coalition, UK
  • Grupo Nacional de Presupuesto Público, Perú
  • GTEICOM, El Salvador
  • Health Advocacy International, USA
  • Heinrich Boell Foundation Washington, United States
  • Himalayan Peace Foundation, Nepal
  • IDPA, Perú
  • Initiative for Social and Economic Rights (ISER), Uganda
  • Institut Panos, Haïti
  • Institute of the Blessed Virgin Mary – Loreto Generalate, Global
  • Instituto Centroamericano de Estudios Fiscales (Icefi), Centroamérica
  • Instituto para el Desarrollo y la Paz Amazónica, Perú
  • Instituto Popular de Capacitación IPC, Colombia
  • International Federation of Social Workers, Switzerland
  • International Women’s Rights Action Watch Asia Pacific, Malaysia
  • Justice et Paix France, France
  • Kamukunji Paralegal Trust (KAPLET), Republic of Kenya
  • La Raíz – Pensamiento Crítico,     Ecuador
  • MADRE, USA
  • Missionary Oblates, USA
  • National Advocacy Center of the Sisters of the Good Shepherd, United States
  • National Campaign for Sustainable Development, Nepal
  • NETWORK Lobby for Catholic Social Justice, USA
  • NGO ASRAD, MALI
  • NGO Forum on ADB, Asia/Regional
  • Northwest Coalition for Responsible Investment, USA
  • Organisation Constellée pour le Développement Économique et Social de la Commune des Gonaives (OCDESCG), Haïti
  • Oxfam, Global
  • PacificwinPacific, Australia
  • Pakistan Kissan Rabita Committee, Pakistan
  • Partners In Health, International
  • Peoples Federation for National Peace and Development (PEFENAP), Malawi
  • Plataforma Boliviana Frente al Cambio Climático, Bolivia
  • Plateforme Française Dette et Développement, France
  • Polylat – Sovereign Debt Project, Ecuador-France
  • Projekta, Suriname
  • Red Nacional de Promoción de la Mujer, Perú
  • RENICC, Nicaragua
  • Rural Area Development Programme (RADP), Nepal
  • Scotland’s International Development Alliance, Scotland
  • SCIAF, Scotland
  • Sisters of Mercy of the Americas Justice Team, U.S.A.
  • Sojourners, USA
  • Suramericana Visión, Argentina
  • The NGO Caribbean Development Foundation, Trinidad & Tobago
  • The Society for Children Orphaned By AIDS Inc. (SOCOBA), United States
  • Third World Network (global), Malaysia
  • WEDO, USA
  • Wemos, The Netherlands
  • Women Empowerment Against Poverty of Nepal (WEAPoN), Nepal
  • Women Engage for a Common Future – WECF, Netherlands/Germany/France
  • Yas, Iraq
  • وسط رؤية Amid Vision, Tunisie

Signatory academics and specialists

  • Jayati Ghosh, University of Masachusetts Amherst, USAIndia/US
  • Andrés Arauz, Ex Director General, Banco Central del Ecuador, Ecuador
  • Kevin Gallagher, Global Development Policy Center
  • Francisco Cantamutto, IIESS UNS-CONICET, Argentina
  • Brian Jose Welch, Jamaica
  • Martín Varese, CEPR, Ecuador
  • Ramón Uboñe Gaba Caiga, NAWE, Ecuador
  • Ronaldo Alfonso Bustos García, Colombia
  • Rodolfo Mendoza Reaño, Centro de Políticas Públicas y Derechos Humanos Perú Equidad, Perú
  • Veronica Insausti Castro, Nuestramérica.TV, Perú
  • Misael Darío Izaguirre Núñez, Honduras
  • Ariel Abad Nina Chuquimia, Banco Central de Bolivia, Bolivia
  • José Aldhrint Vega Velásquez, Ecuador
  • Amalia Carolina López de Hernández, Alianza Nacional Contra la Privatizacion del Agua, El Salvador
  • Laure Gnassou, France
  • Mario Enrique La Riva Málaga, Nueva República, Perú
  • Nora Sagastume, Honduras
  • María Peralta Berrios, Fomento de la Vida- FOVIDA, Perú
  • Lucilene Morandi, Fluminense Federal University UFF, Brazil
  • A. Haroon Akram-Lodhi, Trent University, Canada
  • Manuel F. Montes,Society for International Development, Philippines
  • Moisés Roberto Escobar Flores, El Salvador
  • Pablo A. de la Vega M., Ecuador