## IMF Managing Director Kristalina Georgieva’s Statement at the Paris Peace Forum on Increasing Support for Vulnerable Countries via SDR Rechanneling

_IMF News, November 11, 2021_

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**Canonical URL:** [IMF Managing Director Kristalina Georgieva’s Statement at the Paris Peace Forum on Increasing Support for Vulnerable Countries via SDR Rechanneling](https://www.imf.org/en/news/articles/2021/11/11/pr21330-imf-md-statement-at-the-paris-peace-forum)

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## Bibliographic details
- Published: November 11, 2021

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### Overview
- The world economy is recovering and is expected to achieve 5.9% growth this year.
- For low-income developing countries, growth is projected to be 3%.
- The statement highlights a dangerous divergence driven by severe inequality in access to vaccines and in available policy space for vulnerable countries.
- The recent Special Drawing Rights (SDRs) allocation is presented as an important tool to address liquidity and reserve needs in financially constrained nations.

### Key statistics and findings
- New SDR allocation: $650 billion.
- Allocation breakdown:
  - $275 billion went to emerging markets and developing economies.
  - $21 billion went to the poorest countries.
  - Africa received about $31 billion.
- Growth projections:
  - Global: 5.9% growth this year.
  - Low-income developing countries: 3% growth this year.

### Policy proposals and instruments
- Rechanneling of SDRs:
  - Voluntary on-lending or rechanneling from countries with strong external positions to more vulnerable countries is advocated.
  - The G20 global ambition: rechannel $100 billion of the SDR allocation from richer to poorer countries.
- Existing and proposed IMF instruments:
  - PRGT (Poverty Reduction and Growth Trust): an instrument to which SDRs can be rechanneled to boost zero-interest lending to low-income countries.
  - RST (Resilience and Sustainability Trust): a proposed, longer-term instrument with low interest rates to provide funding to low-income countries, vulnerable middle-income countries, and fragile island economies.
    - Aspiration for the RST: start with about $30 billion, building it up to $50 billion and beyond.
- Technical assistance:
  - The IMF offers to provide technical advice to multilateral development banks exploring other viable options for rechanneling.

### Implementation timeline and targets
- RST design and implementation goals:
  - Aim to have RST design in place by Spring Meetings 2022.
  - Aim for implementation by the IMF Annual Meetings in the same year.

### Rationale and framing
- SDRs improve a country’s reserve position and create liquidity without adding to debt.
- Due to IMF shareholding and quota arrangements, countries most in need received a relatively small part of the overall allocation, motivating rechanneling.
- Moral and self-interest argument:
  - It is morally right to help everyone in need.
  - It is also in everybody’s self-interest—“No-one is safe until everyone is safe.”
  - This applies to fighting the pandemic and to fighting climate change.
- RST purpose:
  - Support policies for a transformation to a low-carbon and climate-resilient economy.

### Summary conclusions
- The new SDR allocation, combined with further rechanneling from countries with strong reserve positions to more vulnerable countries, is presented as an example of enlightened self-interest.
- Collective action and cooperation are emphasized as necessary to win the global crisis.

*Source: IMF Managing Director Kristalina Georgieva’s Statement at the Paris Peace Forum, November 11, 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)
- [Special Drawing Rights (SDRs) -- A Factsheet](https://www.imf.org/en/about/factsheets/sheets/2023/special-drawing-rights-sdr)
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- [PRESS CENTER](http://presscenter.imf.org/)
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_Source: https://www.imf.org/en/news/articles/2021/11/11/pr21330-imf-md-statement-at-the-paris-peace-forum_