The International Monetary Fund (IMF) will have a critical role to play in the recovery from the economic, health, and climate crises. Its immediate role is to give countries the financial support they need to survive the upcoming and current crisis and minimize the short-term economic impact of the slowdown in global economic activity. As the immediate crisis subsides, the IMF will help countries establish the macroeconomic policies needed for a sustainable and equitable economic recovery and provide needed financial support. The IMF’s role is outsized in developing countries, where needs are likely to be greatest and the capacity to use their own fiscal and monetary tools will be limited. In addition, the IMF’s allocation of Special Drawing Rights arouses new challenges that must be addressed.
CGD’s work will focus on the institutional reforms needed to make the IMF effective in the current crisis, including options for expanding its financing envelope for developing countries, and how its policy advice, financial assistance, and capacity building efforts can be best targeted to a climate-friendly, sustainable, and resilient recovery.