•Press Release COVID-19 Economic Crisis and Recovery Globalization and Trade IMF US Foreign Policy World
Contact: Isaac Evans-Frantz, Action Corps, 347-756-1896, national[at]actioncorps.org
Ben Levenson, Justice Is Global, 973-879-5142, b.levenson[at]peoplesaction.org
Washington, DC ― Dozens of international humanitarian, development, health, labor, faith-based, and policy organizations are urging President-Elect Joseph Biden to act swiftly on a global response to the COVID-19 pandemic, in particular by directing the US Treasury Department to support an allocation of two trillion Special Drawing Rights (SDRs) by the International Monetary Fund. The Trump Treasury Department has blocked any special issuance of SDRs, despite the move being supported by the vast majority of the 189 member countries of the IMF, including the United States’ closest allies. The allocation would make available much-needed resources to many countries as they attempt to control the pandemic and related, life-and-death economic challenges, but Biden has vowed to bolster US leadership in the global fight against the pandemic.
Organizations signing the letter include the AFL-CIO, the International Brotherhood of Teamsters, Global Citizen, the American Friends Service Committee, Amnesty International USA, Bread for the World, the Iowa Farmers Union, Jobs With Justice, NETWORK Lobby for Catholic Social Justice, Oxfam America, Partners in Health, T’ruah: The Rabbinic Call for Human Rights, and the United Methodist Church – General Board of Church and Society, and dozens of others.
Legislation to provide “at least two trillion” in SDRs passed the House of Representatives twice in 2020. SDRs are an internal currency of the IMF, but can be exchanged for hard currency by 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.
“More nations have faced recession under COVID-19 in the past year than at any other recorded time since 1870,” the letter states. “The UN World Food Program projected that 265 million people in low- and middle-income countries would face acute hunger by the end of 2020.”
This is nearly double the amount of people facing acute hunger from the previous year, and could lead to the death of millions of children from malnutrition-related diseases; many could be saved if the world economy recovers faster.
The two trillion SDR issuance approved by the US House of Representatives would aid this recovery and also provide resources for poor countries to import more food and life-saving medicines.
The letter also notes that the two trillion SDR issuance “will provide a much-needed boost to the U.S. economy.” This is because, according to data from the US Department of Commerce, and estimates from USTR, the US lost about 2 million jobs from falling exports. This is not a result of problems in the US economy, but the decline in world economic growth. Thus, the recovery of the world economy that SDR issuance would hasten would create many jobs here in the US.
“During this time of crisis, SDRs are critical to maintaining financial support to countries facing economic crisis so they can invest in jobs, social protection, and public health needs,” Cathy Feingold, Director of the International Department at the AFL-CIO, said. “An SDR allocation will ensure that countries can rebuild post-pandemic in a way that prioritizes the well being of workers and their communities.”
“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.”
“As the pandemic continues to wreak havoc in Latin America, South Asia and Africa, we need a global response to the global economic crisis. A major allocation of Special Drawing Rights by the IMF is a critical complement to more debt relief and more aid,” Didier Jacobs, Senior Policy Advisor, Oxfam America, said.
“Fiscal crises in developing countries threaten an even more severe global economic collapse than we have seen so far this year, which would then cause further unemployment and suffering for millions of American workers,” said Tobita Chow, the Director of Justice Is Global, a project of People’s Action / People’s Action Institute. “To support the well-being of billions of people in developing countries with SDRs and debt relief is to protect the American people as well. To do otherwise is not only cruel and racist but also self-destructive.”
“A new issuance of SDRs, which won’t cost taxpayers anything, will give struggling low-income countries the fiscal space they need to be able to fully respond to this pandemic and its far-reaching and unprecedented impacts on hunger, education, and economic stability,” said Michael Sheldrick, the Chief Policy Officer for Global Citizen. “Nine months into this crisis, it’s well past time for world leaders to support a new issue of IMF Special Drawing Rights to assist poorer nations that need the financial help urgently.”
“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.”