Congressman French Hill (AR-02) issued the following statement today after G7 leaders expressed interest in redirecting $100 billion in newly allocated International Monetary Fund (IMF) Special Drawing Rights (SDRs) to developing countries.
“After meeting with Secretary Yellen last month and urging her to focus SDRs towards the poorest countries, I am pleased that she has agreed to work with the Group of Seven to target SDRs to developing countries in need of relief as we turn the corner of the pandemic, but the G7 must go further. I have long argued that targeting lower income countries through the IMF is critical to a global recovery from COVID-19.
“However, redirecting $100 billion in SDRs amounts to just 15% of the $650 billion in the IMF’s proposed general allocation. This just underscores that a general allocation was the wrong tool to fight the pandemic and could end up as a windfall for countries that need it least. We need a concentrated effort on the poor, not a giveaway for advanced economies.
“Under the G7 plan, China, Russia, and terrorist regimes like Iran and Syria could also receive billions through SDRs. Secretary Yellen’s work to recycle SDRs is a step in the right direction, but America must work with our G7 allies to ensure proper oversight and transparency. It’s imperative the G7’s communique explicitly prohibit bad practices like allowing low-income countries to use these funds to pay debts to China as part of the Belt and Road Initiative. The G7 should also ensure that state sponsors of terrorism and rogue regimes aren’t able to exchange their SDRs for hard currency.”
Original source can be found here.
