Gallagher Writes on IMF and COVID-19 for Brookings Blog
Kevin Gallagher, Professor of Global Development Policy at the Frederick S. Pardee School of Global Studies and Director of the Global Development Policy (GDP) Center, along with colleagues José Ocampo (director of the Economic and Political Development Concentration at Columbia University) and Dr Ulrich Volz (reader in Economics at University of London) published a second OpEd arguing that the International Monetary Fund (IMF) should use Special Drawing Rights (SDRs) as a tool for attacking a COVID-19 financial fallout.
Published in the Brookings Blog on March 26, 2020, and titled, “IMF Special Drawing Rights: A Key Tool for Attacking a COVID-19 Financial Fallout in Developing Countries” followed an earlier OpEd by the authors published in the Financial Times on March 20, 2020. In this, longer, piece the authors elaborate their proposal and also respond to some of the commentaries that the earlier article generated from other experts.
We refute the notion that the IMF’s current firepower of $1 trillion—parts of which are already committed—will be enough to support its membership through this crisis. We hope to be proven wrong, but we are facing a global crisis of unprecedented proportions. Eighty countries have already approached the IMF for support, and this number is likely to rise as the crisis deepens. The international community needs to extend support so that public responses to the health crisis are not imperiled by financial crises.
COVID-19 does not discriminate between rich and poor countries, and until the virus is eradicated it will imperil the health of the world’s people and the global economy alike. This is a time for bold thinking and action. All solutions have trade-offs and limitations, but we hold that a large SDR allocation is part of the solution.
The full piece may be read here.
Kevin Gallagher is a professor of global development policy at Boston University’s Frederick S. Pardee School of Global Studies, where he directs the Global Development Policy Center. He is author or co-author of six books, including most recently, The China Triangle: Latin America’s China Boom and the Fate of the Washington Consensus. Read more here.