Act with urgency to reform the international monetary system
US Federal Reserve chairman). Fairness should also apply to the distribution of Special Drawing Rights (SDR), this embryo of a global currency that the IMF may issue under certain conditions.
The last SDR allocation of an equivalent of $650 billion was decided in 2021 after the covid crisis, and, like the preceding ones, it was done in proportion to the quotas, which meant disproportionate shares for countries that need them the least. As a positive measure, the IMF recently invited rich countries to give a fraction of their SDRs to the poorest ones through IMF Trust Funds.
We would suggest a change in the system, earmarking around 20% of future allocations for the poorest countries. More fairness is also called for in IMF surveillance of its members, which currently exerts itself mostly on countries that need its financing, while others in a situation of external payments surplus, or whose global influence is systemic, often ignore its recommendations.
This monitoring should focus particularly on countries’ external reserves, which, in some cases, greatly exceed reasonable levels, thereby sterilizing a significant fraction of global savings invested in short-term instruments and reducing our collective ability to finance indispensable long-term investments, such as for the ecological transition. Mandate: The IMF’s mandate should explicitly include effective surveillance of capital flows, which, in a highly financialized world, has much greater influence on exchange rates and countries’ macroeconomic situations than fluctuations in current account balances.
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