IMFC

Civil society organizations warned the IMF what frontloaded fiscal adjustment would mean in practice: large spending cuts imposed all at once, leaving ordinary people to pay the price. It is the same failed shock therapy that devastated countries and communities in the past. And it risks further damaging an IMF already struggling for legitimacy. The warnings were swept aside, even though many Directors echoed civil society’s concerns.

The International Monetary and Financial Committee (IMFC) gave its approval today to set up a new IMF-administered Resilience and Sustainability Trust (RST) that will allow wealthy nations to channel some of their Special Drawing Rights (SDRs) to more vulnerable countries. In response, Nadia Daar, Head of Oxfam International’s Washington DC Office, said: “While it is positive that the RST will be accessible to a wide range of countries, including vulnerable middle-income countries hit hard by the COVID-19 pandemic, it is vital that the IMF deliver these funds on terms that are as close to grants as possible."