This week’s G20 Finance Ministers and Central Bank Governors’ meeting take place as warning signs are flashing red. Economic woes are deepening and shocks are overwhelming countries throughout the world.
Those with the least capacity to weather shocks are feeling this most acutely: they are trading off heating for eating or struggling through yet another hunger crisis.
Yet, leadership and a coherent response plan are missing in action.
We have the tools to respond and mitigate the worst of these overlapping crises, while laying a path for deeper recovery and renewal. Ahead of the G20 Leaders’ Summit in November, call on Canada to:
- Continue helping the G20 reach the global ambition to channel $100 billion in Special Drawing Rights towards developing countries.
Close to $60 billion has been pledged nearly a year on since the G20 collectively committed to recycle $100 billion SDRs.
Canada was one of the first countries to pledge sharing 20% of its newly granted SDRs, and we are extremely thankful for this commitment. However, to make sure that the full potential of SDRs is reached, we think Canada should:
a. Follow the example of France by increasing our sharing pledge beyond the initial 20%. A doubling of this initial commitment to 40% would demonstrate real leadership from Canada and help unlock more ambition from other countries.
b. Commit to channel SDRs beyond IMF vehicles, particularly through prescribed holders such as the African Development Bank which has put forward a promising proposal on how they could leverage SDRs to improve their lending capacity.
- Push the G20 to release a roadmap to unlock new lending from multilateral development banks.
Modernizing MDBs’ conservative approach to capital adequacy alone could unleash $500 billion to $1 trillion in new lending capacity with virtually no financial risk. G20 governments should deliver an ambitious, specific, accountable and time-bound roadmap for implementation of the G20 expert panel’s recommendations on capital adequacy frameworks reform. We hope that you can support these much-needed reforms so that Canada’s funding of MDBs can go as far as possible in addressing the critical challenges the world faces today.
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