•Press Release Coronavirus Economic Crisis and Recovery International Monetary Fund US Foreign Policy World
Contact: Isaac Evans-Frantz, Action Corps, 347-756-1896, [email protected]
Washington, DC ― The lack of a significant global response to the COVID-19 pandemic in the new US legislative response package negotiated over the weekend is a “tragic missed opportunity” to get urgently needed support to low- and middle-income countries around the world working to contain the pandemic, provide medical attention to their populations, and respond to the economic shocks brought on by business closures, unemployment, increased unemployment and poverty, and related aspects of the worst global economic downturn since the Great Depression. Groups representing tens of millions of Americans had backed legislation to provide trillions in the International Monetary Fund’s Special Drawing Rights (SDRs) as a form of global stimulus to support developing countries’ capacity to respond to the pandemic.
“Legislation mandating US support for Special Drawing Rights could help stabilize the world economy, providing desperately needed help to millions of people in the world who have been driven to the brink of starvation,” said Nobel Laureate economist Joseph Stiglitz.
“It was approved twice by the House of Representatives and costs the US government nothing. I hope that the new Congress will approve it as soon as possible,” Stiglitz, who is also an advisory board member of the Center for Economic and Policy Research (CEPR), added.
Directors of numerous policy groups that are concerned with the relief from the suffering and loss of human life caused by the world recession also weighed in.
“It is unfortunate that the Trump administration Treasury Department blocked vital legislation that could save millions of lives all over the world,” CEPR Co-Director Mark Weisbrot said today. “First, they blocked this urgent and uncontroversial response to the global crisis at the IMF, and then the Trump Treasury Department stopped Congress from taking corrective action.”
Legislation was passed by the House earlier this year that would require the US Treasury to support, at the IMF, a large issuance of SDRs. SDRs are an internal currency of the IMF, but can be exchanged for hard currency for countries in need. The Congressional Budget Office has confirmed that there is no cost to the US government, either at present or in the future, of any such issuance.
A companion bill in the Senate, S. 4139, co-led by Senators Durbin, Sanders, Reed, Cardin, and Merkley, also supported the issuance of at least two trillion SDRs. It was introduced in July. Congressional negotiators worked to include support for trillions in SDRs in the new COVID response package, but this was opposed by the Treasury Department.
“The relief package includes some important provisions for the American people, but does not match the scale of the global crisis,” Isaac Evans-Frantz, director of Action Corps, the humanitarian advocacy organization, said. “We are beyond disappointed. UNICEF reports COVID is leading to the starvation of 10,000 additional children every month. There’s something we can do about it — for free — but we need leadership. The incoming administration should support the legislation that the House has twice passed to allow international funding for a global economic recovery that will not cost US taxpayers a penny. This passed the House as part of the HEROES Act 2.0; it is time to make it happen.”
“The global pandemic presents a pressing moral challenge to the world. It is imperative that the US government respond and at the least not stand in the way of supporting the globe’s most vulnerable in their hour of need,” Jean Stokan, Justice Coordinator for Sisters of Mercy of the Americas, said. “SDRs are a simple way that these people can be supported, and at no cost to US taxpayers. It is crucial that the next Congress and the next administration make this a top priority.”
“SDRs will save millions of lives and begin to heal our ailing world,” Dr. Pauline Muchina, Education and Advocacy Coordinator for the American Friends Services Committee, and chair of the Advocacy Network for Africa COVID-19 Working Group, said. “We need them to help developing countries to mitigate the economic impact, buy vaccines, protect frontline workers, and save lives at no cost to the US taxpayers. We have a moral obligation to help each other overcome this pandemic. No country is safe until we are all safe because of our shared humanity, security, and future.”
Caucuses comprising a huge swath of House Democrats had urged the Democratic leadership to press for the SDRs’ inclusion in the final stretch of negotiations. Last month, the leaders of the Congressional Progressive Caucus (CPC), the Congressional Black Caucus (CBC), the Congressional Hispanic Caucus (CHC), and the Congressional Asian Pacific American Caucus (CAPAC) sent a letter to Speaker Pelosi urging her to prioritize this legislation. Democratic leadership in both chambers also supported the legislation.
“The global pandemic challenges us in so many ways, physically, financially, and most importantly morally. Our US government, acting on our behalf, can respond by supporting our sisters and brothers around the globe who are most vulnerable among us,” Sister Diane Koorie, RSM, in Oklahoma City said.
More than 110 organizations, including some of the largest humanitarian groups in the US, as well as religious denominations, are calling for a large SDR allocation. So, too, has the International Chamber of Commerce; UN Secretary-General António Guterres; former UK prime minister Gordon Brown and numerous other former heads of state, economy ministers, and other government officials around the world; and prominent economists such as Larry Summers, and former Goldman Sachs chief economist Jim O’Neill; as well as IMF Managing Director Kristalina Georgieva herself.