Join our Statement | We call on world leaders at #COP28 to harness the potential of #SDRs to help achieve climate goals and get back on track towards the #SDGs.

On Nov 28, 2023

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As multiple crises exacerbate the financing needs of developing countries, we write to leaders gathering in COP28 to ask that they agree to the full deployment of new and existing Special Drawing Rights to help low- and middle-income countries meet the Paris Climate Agreement and Sustainable Development Goal agendas.

The climate crisis is already here, hitting the planet hard and imposing the heaviest toll on those more exposed to vulnerabilities and inequalities in the Global South. While debt servicing already exceeds climate spending in 9 out of 10 developing countries, 72% of climate finance is provided to them through additional loans.

Special Drawing Rights (SDRs) are an international reserve asset that the IMF can issue to complement the official reserves of its member countries. SDRs are not loans, they are not debt, and they do not have to be repaid to the IMF. Holders incur only an annual interest rate if they reduce SDR holdings vis-à-vis their cumulative SDR allocation by exchanging them for hard currency. They also do not cost anything to issue.

The last USD 650 bn SDR allocation, in August 2021, was in response to a global health crisis. This life-saving measure was one of the single most important actions taken to support developing countries in the face of a global pandemic. Countries used their new SDRs to repay IMF debts, bolster foreign reserves, and pay for critical imports such as vaccines and personal protective equipment. By the IMF’s own recent assessment, this issuance “continues to benefit the global economy.” Notably, the IMF also finds that “governments generally pursued responsible policies” with their SDRs, and the issuance “does not appear to have been a material contributor to increased global inflation.” However, a significant number of the IMF’s low- and middle-income countries reported that the 2021 allocation was not sufficient to meet their financing needs.

Developed countries received more than $400 billion from this SDR allocation, but low-income countries received on average double the allocation in relation to the size of their economies. Southern countries used more SDRs, in particular Africa and Latin America, exposing that while the distribution is regressive, the use has been progressive. The subsequent rechannelling efforts and commitments of the SDRs not used by developed countries are ongoing, but still involve only a fraction of their SDR holdings. Moreover, rechanneling has been slow and proceeds through debt- and conditionality-creating methods.

The 2021 SDRs allocation reflects that this is an important alternative source of liquidity, to strengthen international reserves, as a budget support and to repay external debt. In light of increasingly frequent geopolitical and climate shocks, and financial instability, ensuring more buffers is crucial for supporting long-term climate strategies. Moreover, they can serve as a source of capital to finance climate and development objectives, e.g. capital expenditure imports for sustainable renewables. These policies contribute to generating an opportunity for countries to face crises in favour of the people and the planet.

There is an ecological debt that developed countries have with the Global South. The climate crisis is our present and immediate action is needed from the global financial community.

In the face of a severe climate crisis that will only get irreversibly, catastrophically worse without urgent and immediate action, we call on the world leaders at COP28 to realise the potential of new and existing SDRs to help achieve national climate goals and get back on track with the SDGs. SDRs can provide this contribution through, for instance:

A new issuance of SDRs for immediate global relief, and regular, periodic SDR issuances for climate investments;
Targeted allocations that distribute SDRs more effectively toward all low- and middle-income countries;
Reforms to broaden SDR rechanneling mechanisms while minimising debt and conditions attached to their use.

We ask you to consider these actions while ensuring that they are additional to ODA and the commitments of developed countries to jointly mobilise USD 100 billion in climate finance.

Prepared by:

– Latindadd

– Global Call to Action Against Poverty (GCAP)

– MenaFem Movement for Economic, Development and Ecological Justice (MenaFem)

– Global Policy Forum Europe

– WEED – World Economy, Ecology & Development

– Bretton Woods Project

– Jubilee USA Network

– Center for Economic and Policy Research (CEPR)

– Recourse

– European Network on Debt and Development, Eurodad

– ActionAid International

Signatory organisations:

11.11.11, Belgium
350.org, Global
AbibiNsroma Foundation, Ghana
Action Corps, USA
Alternative Law Collective (ALC), Pakistan
American Friends Service Committee, USA
Asociación Generaciones de Paz (ASDEPAZ), El Salvador
Baltimore Nonviolence Center, USA
BARAC UK, United Kingdom
Budget Advocacy Network, Sierra Leone
CAFOD,UK
Caribbean Policy Development Centre, Caribbean
Center for Economic and Social Rights (CESR), United States
Centre for Environment, Human Rights & Development Forum – CEHRDF, Bangladesh
Centre for Citizens Conserving Environment & Management (CECIC), Uganda
Centro de Documentación en Derechos Humanos “Segundo Montes Mozo S.J.” (CSMM), Ecuador
Christian Aid, United Kingdom
Civil Society SDGs Campaign GCAP, Zambia
Climate Action Network International, Global
Climate Action Network Latin America (CANLA) Latin America and the Caribbean
Climate and Community Project, USA
CNCD-11.11.11, Belgium
Coalición de Tendencia Clasista (CTC-VZLA), Venezuela
Congregation of Our Lady of Charity of the Good Shepherd, U.S. Provinces, United States
Consejo de Jóvenes de Oaxaca, México
Consejo Nacional de Planeación – Sector Afrodescendiente, Colombia
Consejo Regional Indígena del Cauca CRIC, Colombia
Contribution à l’Education de Base, Niger
Debt Justice UK
Development Finance International, United Kingdom
Disability Peoples Forumuganda, Uganda
Ecology Africa Foundation, South Africa
EDER (Environnement, Développement et Énergies Renouvelables), Guinée
Ekumenická akademie (Ecumenical Academy), Czech Republic
erlassjahr.de, Germany
Equidad de Género: Ciudadanía, Trabajo y Familia, México
Euro-Mediterranean Economists Association, Spain
Fast For the Climate, International
FENTAT SUNAT, Perú
Fomento de la Vida- FOVIDA, Perú
Foro Social de Deuda Externa y Desarrollo de Honduras, Honduras
Foundation for Integrative AIDS Research (FIAR), United States
Fundación Ambiente y Recursos Naturales (FARN), Argentina
Fundación para el Desarrollo de Centroamérica (FUDECEN), El Salvador
Friends of the Earth, US
Gatef organization, Egypt
Gender Action, Global
Gestos / CSO WG for the 2030 Agenda, Brazil
Global Consultrant, SC México
Green Economy Coalition, UK
GRUPO NACIONAL DE PRESUPUESTO PUBLICO, PERU
Good Health Community Programmes, Kenya
GTEICOM, El Salvador
Health Advocacy International, USA
Heinrich Boell Foundation Washington, United States
Himalayan Peace Foundation, Nepal
Initiative for Social and Economic Rights (ISER), Uganda
Institut Panos, Haïti
Institute of the Blessed Virgin Mary – Loreto Generalate, Global
INSTITUTO PARA EL DESARROLLO Y LA PAZ AMAZONICA, PERU
Instituto Popular de Capacitación IPC, Colombia
International Federation of Social Workers, Switzerland
International Women’s Rights Action Watch Asia Pacific, Malaysia
Justice et Paix France, France
Kamukunji Paralegal Trust (KAPLET), Republic of Kenya
La Raíz – Pensamiento Crítico, Ecuador
MADRE, USA
Missionary Oblates, USA
National Advocacy Center of the Sisters of the Good Shepherd, United States
National Campaign for Sustainable Development Nepal, Nepal
NETWORK Lobby for Catholic Social Justice, USA
NGO ASRAD, MALI
Northwest Coalition for Responsible Investment, USA
Organisation Constellée pour le Développement Économique et Social de la Commune des Gonaives (OCDESCG), Haïti
Oxfam, Global
Partners In Health, International
Peoples Federation for National Peace and Development (PEFENAP), Malawi
Pakistan Kissan Rabita Committee, Pakistan
Plataforma Boliviana Frente al Cambio Climático, Bolivia
Polylat – Sovereign Debt Project Ecuador, France
Projekta, Suriname
Red Nacional de Promoción de la Mujer, Perú
RENICC, Nicaragua
Rural Area Development Programme (RADP), Nepal
Scotland’s International Development Alliance, Scotland
Sisters of Mercy of the Americas Justice Team, U.S.A.
Stichting Projekta, Suriname
The NGO Caribbean Development Foundation, Trinidad & Tobago
The Society for Children Orphaned By AIDS Inc. (SOCOBA), United States
Third World Network (global), Malaysia
WEDO, USA
Wemos, The Netherlands
Women Empowerment Against Poverty of Nepal (WEAPoN), Nepal
Women Engage for a Common Future – WECF, Netherlands/Germany/France
Yas, Iraq
وسط رؤية Amid Vision, Tunisie

Signatory academics and specialists:

Jayati Ghosh, University of Masachusetts Amherst, USAIndia/US
Andrés Arauz, Ex Director General, Banco Central del Ecuador, Ecuador
Francisco Cantamutto, IIESS UNS-CONICET, Argentina
Brian Jose Welch, Jamaica
Martín Varese, CEPR, Ecuador
Ramón Uboñe Gaba Caiga, NAWE, Ecuador
Ronaldo Alfonso Bustos García, Colombia
Rodolfo Mendoza Reaño, Centro de Políticas Públicas y Derechos Humanos Perú Equidad, Perú
Veronica Insausti Castro, Nuestramérica.TV, Perú
Misael Darío Izaguirre Núñez, Honduras
Ariel Abad Nina Chuquimia, Banco Central de Bolivia, Bolivia
José Aldhrint Vega Velásquez, Ecuador
Amalia Carolina López de Hernández, Alianza Nacional Contra la Privatizacion del Agua, El Salvador
Laure Gnassou, France
Mario Enrique La Riva Málaga, Nueva República, Perú
Nora Sagastume, Honduras
María Peralta Berrios, Fomento de la Vida- FOVIDA, Perú
Lucilene Morandi, Fluminense Federal University UFF, Brazil
A. Haroon Akram-Lodhi, Trent University, Canada
Manuel F. Montes,Society for International Development, Philippines