•Press Release Economic Crisis and Recovery Globalization and Trade IMF World
With World Facing One of Worst Economic Forecasts in Decades, Congress Members Urge IMF Assistance
For Immediate Release: October 4, 2023
Contact: Isaac Evans-Frantz, 802-490-7814, [email protected]
Washington, DC — Fifty-nine US senators and representatives are urging the Biden administration to support a new major allocation of Special Drawing Rights (SDRs) from the International Monetary Fund (IMF) as a no-cost way to quickly support countries around the world enduring the combined external debt, food, climate, and other crises contributing to one of the worst global economic situations in decades.
In a bicameral letter to President Biden and Treasury Secretary Yellen, the lawmakers urge the US to support a new allocation of at least $650 billion worth of SDRs, citing what the IMF itself has described as the worst five-year forecast for the global economy in three decades. The IMF previously issued $650 billion worth of SDRs in August 2021 in response to the global COVID pandemic and related economic shocks.
The letter is co-led by Senator Elizabeth Warren and Representatives Jesús “Chuy” García, Donald Norcross (chairman of the Congressional Labor Caucus), Joyce Beatty (ranking Democrat on the Financial Services subcommittee on international financial institutions), and Pramila Jayapal (chair of the Congressional Progressive Caucus). Other signers among the 59 include Senator Ron Wyden, who chairs the Senate Finance Committee, and Representatives Nydia Velazquez, Stephen Lynch, Steven Horsford, Sylvia Garcia, Al Green, Ayanna Pressley, Rashida Tlaib, Juan Vargas, and Nikema Williams, who all sit on the House Financial Services Committee.
SDRs are international reserve assets issued by the IMF. IMF member countries can use their SDRs to pay debts, bolster foreign reserves, or fund critical purchases like vaccines and food supplies by exchanging their SDRs for hard currency. In times of crisis, the IMF can issue more SDRs to its members, providing immediate global relief at virtually zero cost.
While in 2021 the global economy was suffering the impact of the COVID pandemic and related supply chain disruptions and other shocks, the lawmakers cite recent warnings from the IMF and other institutions showing that the global economy is faring even worse today: “The IMF recently issued its worst 5-year forecast for the global economy in three decades. In July, the Fund projected that the world economy will grow by just 3 percent this year and in 2024. World trade growth is expected to decline and to remain well below the average of the past 20 years.”
The lawmakers note that a major new SDR disbursement would benefit US workers by boosting exports to countries that otherwise will have diminished ability to import goods from the US. Labor unions, including the AFL-CIO, are among the many civil society groups also calling for a new major SDR issuance.
“The labor movement strongly supports the call for a new allocation of SDRs, which represent a transformative measure needed to avoid future shocks and job loss related to climate, health, debt, and digitalization, among other challenges,” Catherine Feingold, AFL-CIO international director, said.
“A new SDR issuance is a critical measure to provide rapid relief to countries hit by the global debt crisis, alongside intersecting social and economic crises, which severely reduce spending for health and social services,” Cate Oswald, principal chief program officer at Partners In Health, said. “In health centers and hospitals around the world, health care workers — including Partners In Health staff — bear witness to the tragic embodiment of these crises: ill health, unnecessary suffering, and preventable deaths. That’s why we call on President Biden to support a new issuance of SDRs.”
“The US economy lost about 2 million export-related jobs in 2020 due to the loss of demand from the rest of the world, during the world recession. So this new issuance, like the last one, could save many US jobs going forward, at the same time that it saves lives throughout the world,” Center for Economic and Policy Research Co-Director Mark Weisbrot said.
“As a Catholic Christian, I hear the call of faith to put persons first who are the poorest among us. A broad range of Catholic organizations and others have called for a new release of Special Drawing Rights. The 2021 release of Special Drawing Rights likely saved hundreds of thousands of lives. Let’s do it again! President Biden can act and ensure that these funds are unlocked,” Sister Diane Koorie, of the Sisters of Mercy of the Americas, said.
“In this letter, a record number of US lawmakers are calling for the release of Special Drawing Rights for global crisis relief, recognizing that our prosperity in the US is linked to the well-being of people around the world. Organizations representing tens of millions of Americans support this letter,” Isaac Evans-Frantz, Action Corps executive director, said.
“Foreign Policy for America is proud to join with congressional leaders and this extraordinary coalition in calling on the administration to support a new allocation of Special Drawing Rights at the IMF,” said Andrew Albertson, Foreign Policy for America’s executive director. “Supporting this allocation is both the right thing to do and the smart thing to do. At no cost to American taxpayers, it will strengthen the resilience of debt-burdened, climate-vulnerable developing countries confronting multiple global crises; expand trade and investment opportunities for American businesses; and fortify our partnerships around the world by demonstrating US responsiveness to developing countries’ needs at a time of growing global competition.”
Numerous countries around the world have also recently called for a new SDR allocation of the same size, or greater, than in 2021. The African Union included a call for such an allocation in their Nairobi Declaration concluding their summit last month, and over 50 civil society groups in the Caribbean recently urged Biden and Yellen to support a new issuance. Colombian president Gustavo Petro called for a new major allocation in his speech at the UN General Assembly last month.
Organizations endorsing the letter include: the AFL-CIO; Action Corps; ActionAid USA; Advocacy Network for Africa; Africa Faith and Justice Network; American Friends Service Committee; Association of Concerned Africa Scholars (USA); Center for American Progress; Center for Economic and Policy Research; Demand Progress; Foreign Policy for America; Friends of the Earth US; Justice Is Global; National Advocacy Center of the Sisters of the Good Shepherd; NETWORK Lobby for Catholic Social Justice; Oxfam America; Partners in Health; Peace Action New York State; Public Citizen; Sisters of Mercy – Justice Team; and United Church of Christ, Justice and Local Church Ministries (UCC).
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