Good leader -- and I agree with most the suggestions (IMF lending into arrears/ revisiting the SDR allocation).
But I might go a bit further -- the IMF after all isn't using most of its balance sheet right now
ft.com/content/ddfe66…
But I might go a bit further -- the IMF after all isn't using most of its balance sheet right now
ft.com/content/ddfe66…
IMF lending of course doesn't solve debt problems (tho b/c of its preferred position, the IMF can lend into situations of uncertainty). But the IMF certainly could do a lot more to address EM financing needs -- lending has increased by only $25b (through end May) 
The IMF itself forecasts that -- including all the RFIs (Rapid Financing Instruments) in the pipeline and the increase in the FCLs (Flexible Credit Line) it will only be using a quarter of its balance sheet ($250b or $1 trillion) ...
That means 3/4s of the IMF's resources aren't currently on track to be put to any use ...
Now perhaps the emerging world is already so indebted that it cannot borrow more, and the IMF's resources cannot be used. But if that's the case, a lot more debt restructurings are needed
Now perhaps the emerging world is already so indebted that it cannot borrow more, and the IMF's resources cannot be used. But if that's the case, a lot more debt restructurings are needed
And if you look at its details, the debt service suspension initiative isn't going to provide impressive sums either --
The WB's data shows that $5.3b of the $11.5b in flow relief goes to just two countries (Pakistan & Angola), leaving $6b for the rest
worldbank.org/en/topic/debt/…
The WB's data shows that $5.3b of the $11.5b in flow relief goes to just two countries (Pakistan & Angola), leaving $6b for the rest
worldbank.org/en/topic/debt/…
That seems a small number relative to any estimate of the likely need --
and in fact it is far less than the $20b these countries would get from a $500b SDR allocation (which was criticized for being poorly targetted)
piie.com/blogs/realtime…
and in fact it is far less than the $20b these countries would get from a $500b SDR allocation (which was criticized for being poorly targetted)
piie.com/blogs/realtime…
So my view here is simple --
The Fund's RFIs (~ $100b in new lending max) and the G-20 Debt Service Suspension Initiative ($11.5b, with $5.3b going to two countries) don't constitute a sufficient global financial response to the current shock.
The Fund's RFIs (~ $100b in new lending max) and the G-20 Debt Service Suspension Initiative ($11.5b, with $5.3b going to two countries) don't constitute a sufficient global financial response to the current shock.
