Leaders of the Progressive Caucus, CBC, CHC, and CAPAC Urge Speaker Pelosi to Prioritize IMF Special Drawing Rights for Developing Nations in Remaining Year-End Legislation

Nov 24, 2020 Issues: Economic Development

Washington, D.C. – This week, the leaders of the Congressional Progressive Caucus (CPC), the Congressional Black Caucus (CBC), the Congressional Hispanic Caucus (CHC), and the Congressional Asian Pacific American Caucus (CAPAC) sent a letter to Speaker Pelosi on the urgent need for the issuance of at least $2 trillion in Special Drawing Rights (SDRs) by the International Monetary Fund (IMF) to provide direct economic support to the developing world. The letter urged Speaker Pelosi to support these provisions in any year-end legislation expected to be enacted into law, including a domestic COVID relief package, year-end Appropriations deal or the conference report for the annual National Defense Authorization Act.

“More countries are experiencing economic recessions than ever recorded since 1870. There is no telling when the pandemic that is driving this unprecedented world recession will be over. These grim circumstances mean that millions of people could die, not only from COVID-19 itself, but from the pandemic’s impact on the world economy—and most of these lives could be saved,” the letter from CPC Co-Chairs Congresswoman Pramila Jayapal (WA-07) and Congressman Mark Pocan (WI-02), CBC Chair Congressmember Karen Bass (CA-37), CHC Chair Congressman Joaquin Castro (TX-20), and CAPAC Chair Congresswoman Judy Chu (CA-27) notes. “SDRs and debt relief will not only prevent needless poverty, hunger, death, and disease abroad, but strengthen our economy at home, creating jobs by increasing demand for America’s agriculture industry and U.S. exporters. SDRs would allow private businesses in developing countries to quickly acquire U.S. dollars in order to buy U.S. exports.”

“SDRs, the IMF’s internal currency, would be distributed for free to low-income countries, which would then be available to be exchanged for hard currency such as U.S. dollars. This would help many countries avoid balance-of-payments crises, debt crises, and critical shortages of imports, such as food, medicine, and medical equipment,” continues the letter. “In countries already suffering from economic downturns, it would help them—and the world economy—recover more quickly. House Democrats’ support for this issuance is consistent with what the Fund’s leadership has itself proposed, and with the wishes of nearly all of the IMF’s 189 member countries.”

In addition to the broad support from the House Democratic Caucus and IMF member countries, the issuance of SDRs is broadly supported by NGOs and advocacy organizations dedicated to civil society and international economic development.

“As the pandemic continues to wreak havoc in Latin America, South Asia and Africa, we need a global response to the global economic crisis,” said Didier Jacobs, the Senior Policy Advisor for Oxfam America. “A major allocation of Special Drawing Rights by the IMF is a critical complement to more debt relief and more aid.”

“The unanimous support from the Democratic Party for the Special Drawing Rights legislation, which would enable trillions of dollars in relief from the International Monetary Fund, creates a unique opportunity,” noted Sarah Margon, the Foreign Policy Director for the Open Society Policy Center. “If passed, this measure would not only benefit millions of people around the world who have been impacted by COVID and the economic crisis, but would do so without costing Americans a dime.”

"A major allocation of IMF Special Drawing Rights can jump start the global economy and help save millions of lives, without costing US taxpayers anything,” said Alex Main, the Director of International Policy for the Center for Economic and Policy Research. “It’s heartening to see such strong Congressional support for this measure at a time when it is so critically needed, not just for developing countries but for the U.S. economy, which stands to benefit from an SDR-fueled surge in global demand."

“We applaud the leadership of Chairs Jayapal, Pocan, Castro, Bass, and Chu for bringing together the diverse Democratic caucuses around this initiative to save millions of lives abroad and strengthen the economy here at home, recognizing that this opportunity to provide costless global pandemic relief is a racial-justice imperative,” said David Segal, the Executive Director of Demand Progress. “We urge House Democrats to insist on the inclusion of SDRs in any bill that will be enacted by the end of the year to protect the world's poor from unimaginable suffering.”

“I am delighted to see this letter to Speaker Pelosi,” noted Mark Harrison, the Peace with Justice Program Director for the United Methodist General Board of Church and Society. “IMF debt relief and emergency financial resources are an innovative and noncontroversial solution. This will help countries prevent the spread of COVID and resulting hunger ? without costing U.S. taxpayers a single penny.”

“While the G20 have been able to stimulate their economies during this unprecedented crisis, poor countries don’t have this possibility,” said Michael Sheldrick, the Chief Policy Officer for Global Citizen. “Many of them are crushed by debt on top of dealing with COVID. Now is the time for a new issue of IMF special drawing rights to assist poorer nations respond to the crisis.“

“Fiscal crises in developing countries threaten an even more severe global economic collapse than we have seen so far this year, which would then cause further unemployment and suffering for millions of American workers,” said Tobita Chow, the Director of Justice Is Global, a project of People's Action / People's Action Institute. “To support the wellbeing of billions of people in developing countries with SDRs and debt relief is to protect the American people as well. To do otherwise is not only cruel and racist but also self-destructive.”

“This coronavirus pandemic has caused a global health and economic crisis that is affecting millions of people around the word,” added Hassan El-Tayyab, Legislative Manager for Middle East Policy, Friends Committee on National Legislation. “Through the IMF, the U.S. has the power to assist with the coordinated international response and provide countries the economic and humanitarian relief they need to survive this pandemic. It's critical Congress and the Administration support calling for the issuance of special drawing rights in the FY2021 National Defense Authorization Act.”

“The U.S. Congress must show compassion and help save lives globally at $0 cost to the U.S. taxpayers. The issuance of special drawing rights at the IMF will help countries globally to protect their people from COVID-19, hunger, and economic devastation,” said Dr. Pauline Muchina, Policy, Education and Advocacy Coordinator for Africa, American Friends Service Committee. “Like many globally, African countries need these resources to survive COVID-19 and its economic downturn. It is our moral obligation to show compassion and save lives.”

“Now more than ever, debt means death. Maryknoll missioners see this in poor countries like Kenya and Ecuador where governments spend more on servicing debt than on health care. As the coronavirus hits, people fear unemployment and hunger as much as getting sick. If we don’t do what we can to shore up the global economy, we could see millions of people around the world destitute and dying,” said Susan Gunn, the Director of the Maryknoll Office for Global Concerns. “We will all suffer because our economies are connected and this virus knows no borders. The House legislation, and its companion in the Senate, the Support for Global Financial Institution Pandemic Response Act, recognize these facts and that Special Drawing Rights were created for this kind of emergency. Just as the United States supported the IMF allocating SDRs in the financial crisis in 2009, it should support it now.”

The full letter to Speaker Pelosi is available here.