Home Business Why IMF Help for Poor Nations Will Benefit Rich Ones

Why IMF Help for Poor Nations Will Benefit Rich Ones

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It’s the fastest way to get resources to countries that need them, even if the lion’s share goes to richer countries. IMF loans, by contrast, take time to negotiate, and some nations in need might be reluctant to seek them for fear of creating a negative perception with investors. Also, lower-income countries are the ones most likely to convert their SDRs into other currencies to meet balance of payments and fiscal needs. Still, African finance ministers declared that the planned distribution of SDRs “would barely be adequate to meet the continent’s financing needs,” and they urged the IMF to consider ways to reallocate SDRs specifically to low-income and middle-income countries. IMF Managing Director Kristalina Georgieva has vowed “to identify viable options for voluntary channeling of SDRs from wealthier to poorer and more vulnerable member countries.”

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