## Financing for Development in the Era of COVID-19 and Beyond Initiative

_IMF News, March 29, 2021_

## Source details

**Canonical URL:** [Financing for Development in the Era of COVID-19 and Beyond Initiative](https://www.imf.org/en/news/articles/2021/03/29/sp032921-md-international-debt-architecture-and-liquidity)

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## Bibliographic details
- Published: March 29, 2021

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### Overview and key message
- Remarks by IMF Managing Director Kristalina Georgieva at the Meeting of Heads of State and Government on the International Debt Architecture and Liquidity, March 29, 2021.
- Quote: "Helping vulnerable countries calls for a comprehensive approach. This includes actions on concessional finance, global reserves & debt, so countries can support their people."
- Central assertion: The global economy is on a path to recovery, but many developing countries are dangerously falling behind, requiring both domestic reforms and substantial international assistance.

### Global economic outlook and distributional risks
- The global economic outlook is improving—credited to vaccine efforts and unprecedented government and international action.
- Divergence in recovery: Emerging and developing countries are at risk of languishing with weaker growth.
- Relative to pre-crisis projections and excluding China, this group is projected by 2022 to have cumulative per capita income losses as high as 20 percent versus 11 percent in advanced economies.

### Comprehensive approach to support vulnerable countries
- Domestic policy measures recommended:
  - Improve revenue collection.
  - Improve spending efficiency.
  - Improve the business environment.
- International support recommended:
  - Grants.
  - Concessional lending.
- IMF commitment: "We will do our part through concessional lending."

### Special Drawing Rights (SDRs)
- Advanced consideration of a new SDR allocation of US$650 billion to address the long-term global need for reserve assets.
- Next steps: A formal SDR proposal will be presented in June, including measures to enhance transparency and accountability.
- Expected effects of a new SDR allocation:
  - Provide a substantial direct liquidity boost for all IMF members without adding to debt burdens.
  - Free up resources for countries under pressure to support people and businesses.
- Parallel efforts: Exploring options for members with strong financial positions to reallocate SDRs to support vulnerable countries.

### Debt actions, DSSI, and the Common Framework
- Debt Service Suspension Initiative (DSSI):
  - Provided around US$5.7 billion in relief to eligible countries in 2020.
  - Was extended to June 2021.
  - IMF strongly supports a further extension until the end of 2021, which is currently under consideration by G20 members.
- Limitations: The DSSI is not a solution to unsustainable debt.
- Priority actions on debt:
  - Strengthen the international framework for sovereign debt resolution.
  - Improve debt transparency.
  - Develop new ideas to secure broad creditor participation.
- Common Framework implementation:
  - Making the Common Framework for debt treatments work is paramount.
  - Current requests: three requests—Chad, Ethiopia and Zambia.
  - Emphasis on delivering on these requests and ensuring participation by all creditors—official and private—to build confidence and prevent delays.

### IMF support and closing
- Throughout the crisis, the IMF scaled up support for its members to ease the recession and intends to continue supporting the recovery.
- Closing line: "Thank you"

*Source: Financing for Development in the Era of COVID-19 and Beyond Initiative — Remarks by IMF Managing Director Kristalina Georgieva, March 29, 2021.*

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## References

- [https://www.imf.org/en/about/senior-officials/bios/kristalina-georgieva](https://www.imf.org/en/about/senior-officials/bios/kristalina-georgieva)
- [PRESS CENTER](http://presscenter.imf.org/)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2021/03/29/sp032921-md-international-debt-architecture-and-liquidity_