Finance Ministers and United Nations Discuss COVID Crisis Solutions

The majority of developing countries face deepening crises, IMF head Kristalina Georgieva told a global meeting of Finance Ministers. Georgieva spoke during, "Financing the 2030 Agenda for Sustainable Development in the Era of COVID-19 and Beyond." The coronavirus crisis meeting was convened by the UN Secretary General and Finance Ministers of Canada and Jamaica.

"The economic and health impacts for poor people around the world are worsening," stated Jubilee USA Executive Director Eric LeCompte. LeCompte participated in the multi-month COVID-19 response process that created options for Finance Ministers to confront the crisis. "Unless we move forward additional aid and relief, too many countries could wrestle with lost decades of development."

Mahmoud Mohieldin, the UN Secretary General's Special Envoy on Financing the 2030 Agenda, explained during the meeting that while some advanced economies spend the equivalent of 10% of their economic output on pandemic response programs, poor countries cannot even reach 1% of spending.

Georgieva announced the deployment of global reserve funds or Special Drawing Rights. Roughly, $176 billion of these monies are currently held by wealthy countries and could be donated to poor countries.

“We welcome the IMF announcement to disburse billions of dollars of Special Drawing Rights to confront this crisis. As we count the impacts of this crisis in the trillions, G20 Finance Ministers should agree to issue trillions more in global reserve funds," said LeCompte.

The World Bank and several Finance Ministers joined the IMF in a call to extend a 2020 coronavirus debt relief initiative into 2021 to support the 73 poorest countries. World leaders also argued that private banks and creditors should stop collecting poor country debts.

"The bare minimum that world leaders must do now is extend debt payment suspensions for poor countries into next year," noted LeCompte. "Further actions are also critical to protect vulnerable communities and to help all of us emerge with resilience from this crisis. The private sector must be compelled to offer debt relief, more developing countries need aid and some countries need to see their debts permanently reduced."

Several high-level participants urged the need to address revenue losses of countries because of tax evasion, corruption and other illicit financial flows.

Heads of State meet during the UN General Assembly on September 29th to consider the crisis proposals discussed at the Finance Ministers meeting. In October and November, the G20, IMF and World Bank hold additional decision-making meetings.