The allocation of Special Drawing Rights (SDRs) during the COVID-19 pandemic has generated considerable interest in using SDRs as a tool for development and climate finance. This policy brief argues that the monetary logic that underpins SDRs justifies regular allocations of at least $200 billion a year, and more than doubling the share of low-and middle-income countries. Once allocated, governments can use SDRs in multiple ways, including to fund some development or climate projects. The brief also discusses reforms to deepen the SDR system in the interest of all countries.
Authors
- Collections
- Policy papers & campaign reports
- Published in
- Kenya
- pages
- 25
Files
Table of Contents
- Contents 3
- SUMMARY 4
- 1 Introduction 5
- 2 Using SDRs for development and the climate transition 7
- Holding SDRs 8
- Exchanging SDRs for hard currency 9
- Spending SDRs on development and climate projects 9
- Paying down debt 11
- 3 Allocating SDRs regularly 12
- 4 Increasing the global south’s share of SDRs 14
- Increasing low- and middle-income countries’ share of IMF quotas 14
- Decoupling SDRs from IMF quotas 14
- Rechannelling high-income countries’ SDRs to low-income countries through multilateral development banks 15
- 5 Deepening the SDR system 18
- 6 Policy recommendations 20
- Notes 22
