140 organisations worldwide ask IMF to issue $650 bn to help poor nations

About 140 organizations worldwide asked the International Monetary Fund to issue at least $650 billion more in reserves to help its member nations grapple with “multiple historic, overlapping, and generally worsening crises.”

Allocating more IMF reserve assets known as special drawing rights, or SDRs, “would immediately make hundreds of billions of dollars available to nearly all low- and middle-income IMF member countries without debt or conditions and only requires political will on the part of the fund’s board” the organizations said in a letter to the IMF’s board of governors and its executive board Thursday.

Pressure is mounting on the IMF to act as the world’s most financially fragile countries, from Argentina to Ukraine, have burned through the extra IMF reserves they got last year, raising calls for a fresh injection to help them weather higher interest rates, food and fuel costs. In July, key Democratic congressional allies urged President Joe Biden’s administration to support a new injection of resources for countries at the IMF to help them deal with the fallout from Russia’s invasion of Ukraine. 

With 345 million people facing acute food insecurity -- more than double the number in 2019 -- and rising interest rates making it more expensive for nations to pay back their dollar-denominated debt as the greenback strengthens, mass anger is triggering instability in many countries and has even led to the ouster of leaders in nations such as Sri Lanka.

Signatories to the Thursday letter include the International Chamber of Commerce and the AFL-CIO, the largest US labor federation. The Center for Economic and Policy Research, a Washington-based progressive think tank, distributed the letter by email.

“The enormity of these overlapping crises may be unprecedented in human history,” the organizations said. As important as the $650 billion of SDRs issued in 2021 were, “they failed to match the scale of the needs of developing countries even then; and the situation is significantly worse now.”