Underlining the need for emergency measures to address debt distress in many developing countries, Pakistan’s acting ambassador to the United Nations Aamir Khan called for “re-channeling at least $250bn of unutilised SDRs to developing countries in need of liquidity”.
In Rome, Director General of the UN Food and Agriculture Organisation (FAO) Qu Dongyu warned at an international meeting that “food insecurity and high prices can become a trigger for instability”.
The SDR (special drawing right) is an international reserve asset created by the International Monetary Fund (IMF) to supplement the official reserves of its member countries. Developing economies are much more dependent on SDRs than developed economies.
In August, a $650bn SDR fund was created to benefit all countries, but about two-thirds of it went to developed economies. The balance falls woefully short of developing countries’ financial needs.
“The access to liquidity must be complemented by other immediate measures, including by fulfillment of the longstanding commitments,” Ambassador Khan said. He also called for the distribution of $100 billion in annual climate finance by developed countries.
At the 2009 UN climate summit in Copenhagen, rich nations had pledged to channel $100bn a year to developing countries by 2020 to help them adapt to climate change. The promise was never fully implemented.
In Rome, the FAO chief urged developed nations to “keep the global food trade system open and ensure that agri-food exports are not restricted or taxed”.