Tracking the movements of IMF special drawing rights (SDRs) can be confusing and challenging. In an effort to increase transparency around SDR transactions, the IMF released its Annual Update on SDR Trading Operations. Most of the report focuses on Voluntary Trade Arrangements, a backbone of the SDR system. In this post, let’s take a look at two questions: What are Voluntary Trade Agreements, and why do they matter for allocating and rechannelling SDRs?
CGD Policy Blogs
Zainab Usman of the Carnegie Endowment for International Peace and Olumide Abimbola of the Africa Policy Research Institute join Gyude to discuss the implications of the European Green Deal for Africa, the outcomes of COP26, and the impacts of the climate crisis on pandemic recovery.
Lawmakers on Capitol Hill extended a lifeline to US global response efforts with the provision of supplemental funding. Early on, sums dedicated to the overseas fight were modest, but last year's end-of-year spending package included $4 billion for Gavi, the Vaccine Alliance—to support the multilateral vaccine procurement platform COVAX. And the spring 2021 reconciliation package, known as the American Rescue Plan, included close to $11 billion for international pandemic response.
On October 8, CGD held an event with the governments of Germany & Norway that asked: how can the World Bank better respond to global challenges like pandemic and climate risks? Explore high-level takeaways from some of the participants.
The World Bank’s International Development Association (IDA), the largest single source of concessional financing for development in lower-income countries, is under-utilized in the world’s fight against pandemics, and can deploy its resources and expertise to play a much more significant role in the COVID-19 response and beyond as part of its upcoming replenishment, known as IDA20.
With the recent allocation of special drawing rights (SDRs)—a reserve asset issued by the IMF—to help countries weather the economic effects of the pandemic, the international discussion has shifted to ways to rechannel a portion of the SDRs that were allocated to high-income economies. The focus has been on the IMF itself as the channel for getting these resources from advanced countries to vulnerable low- and middle-income countries.
Anyone who follows the media on development finance will not be surprised if the corridor talk at the upcoming Annual Meetings of the World Bank and International Monetary Fund (IMF) is affected by the recent World Bank decision to discontinue the Doing Business Index. These discussions will invariably include the implications for data management and integrity at the Bank as well as spillovers questions regarding the leadership at both institutions.
Governing New Pandemic Preparedness Financing – What’s Needed for Credibility, Legitimacy, and Effectiveness
Regardless of the institutional home and scope, there are four essential attributes to build into the financial intermediary fund (FIF)’s design, drawing on lessons learned from existing global funding entities and the broader global governance community. While these elements are intuitive in theory, they require deliberate design and commitment to ensure that they are integrated effectively into the ultimate FIF.
Through its European Investment Advisory Hub, the European Union (EU) has built solid experience in project preparation within its own borders by connecting project promoters and intermediaries with advisory partners who work directly together to help projects reach the financing stage. Building on this approach, we propose the establishment of an Accelerator Hub, which would provide targeted support to identify, prepare, and develop investment projects in Africa.
To help developing countries meet their financing needs, the multilateral development bank (MDB) system needs to get much bigger. Key to a bigger MDB system is a more financially efficient one.