IMF plans $1bn fund raising for poor countries

The International Monetary Fund says it has launched a fund-raising exercise that will enable the Catastrophe Containment and Relief Trust to provide about $1bn for the current COVID-19 pandemic.

The Managing Director, IMF, Kristalina Georgieva, in a statement, called upon the Fund’s economically stronger member countries to help replenish the CCRT, which had only $200m available for the world’s poorest countries.

It stated that the United Kingdom had responded with a pledge for £150m ($183m).

Other donors, including Japan and China, were also coming forward with important contributions.

It stated, “The IMF’s revamped Catastrophe Containment and Relief Trust can now provide rapid debt service relief on IMF debt obligations to more of our poorest and most vulnerable members.

“This will help them to channel more of their scarce financial resources to their vital emergency medical and other relief efforts,”

“Furthermore, we are calling on donor countries to replenish the Trust’s resources to help boost our ability to provide additional debt service relief to our poorest member countries.”

In direct response to the COVID-19 crisis the IMF executive board said it had adopted some immediate enhancements to its Catastrophe Containment and Relief Trust to enable the Fund to provide debt service relief for its poorest and most vulnerable members.

In a statement, it said the CCRT enabled the IMF to deliver grants for debt relief benefitting eligible low-income countries in the wake of catastrophic natural disasters and major, fast-spreading public health emergencies.

The COVID-19 outbreak and the associated global economic turmoil created a critical need to support the Fund’s membership, including exceptional balance of payments support for the poorest members especially impacted by the pandemic.

It stated, “Well-targeted support will allow these countries to prioritise medical spending and health-related as well as other immediate needs in the challenging economic environment, characterised by sharp declines in income, lost revenue and higher expenses.

“In that context, the IMF Executive Board has approved changes to the CCRT that expand the qualification criteria to better cover the circumstances created by a global pandemic and to focus on delivering support for the most immediate needs.

“Specifically, the decision will allow all member countries with per capita income below the World Bank’s operational threshold for concessional support to qualify for debt service relief for up to two years.

“This would apply when a life-threatening global pandemic is inflicting severe economic disruption across the Fund’s membership and is creating balance of payments needs on such a scale to warrant a concerted international effort to support the poorest and most vulnerable countries.