The rich must share

The director of the International Monetary Fund of Kristalin Georgiev writes in Foreign Affairs about what changes need to be made to the work of the fund in view of the threat of growing deglobalization:

“The International Monetary Fund plays a key role in the international economy. This is the only organization that has the right granted to it on behalf of 190 members to conduct a regular and detailed analysis of the state of the economies of these countries. The IMF is a pillar of macroeconomic and financial stability, a source of basic recommendations in the field of economic policy and the creditor of the last instance that is ready to help states cope with the crisis and instability. In a world that is extremely vulnerable to shocks and fragmentation, universal membership in the fund and control on its part are a very important asset.

However, the IMF is just one of the players in the world economy, and one of many similar important international financial institutions. In order to keep up with the dynamics of changes in the deoglobalizing world, the financial model of the fund and activity must receive a new development impetus. An important step in this direction will be the completion of the sixteenth general review of quotas in the fund. The volume of the IMF quotas - the financial contribution made by each member - is the main element of the financial structure of the fund, within the framework of which all the resources of the organization are accumulated. Each member of the IMF is assigned a certain size of the quota in proportion to its position in the world economy, and the fund regularly reviews its volume of quotas to make sure that they could adequately help the organization members to cope with shocks. Growth in the volume of quotas would provide more permanent resources at the disposal of the organization so that the fund can support developing countries and economies, as well as reduce the dependence of these countries on temporary credit lines. It is especially important that the members of the fund be able to agree and finish the overall review of the quota by December 2023.

The most economically prosperous members of the IMF must make targeted efforts in order to urgently replenish the reserves of the trust fund on the purpose of reducing poverty and promoting economic growth. This trust, which is managed by the IMF, provided about 30 billion dollars of an interest -free loan to 56 poor countries since the beginning of the pandemic, which was four times more in the history of the existence of a trust. Such funding is critical so that the IMF can continue to satisfy the demand from the poorest countries. And in order to solve the problem of economic risks that appear as a result of the influence of factors such as climatic changes and pandemia, the richest members of the IMF should also redirect part of their special borrowing rights (a reserve asset of the fund, which is granted to all MVF members) to more vulnerable countries through the recently created stability fund. ”