IMF’s ambiguous arguments are evident when it comes to providing financial aid. The millionaire allocations generated by the international bodies appear today to be destined for the coffers of powerful countries instead of benefiting emerging countries.
This has been demonstrated by various reports on the subject, especially with regards to the International Monetary Fund (IMF).
It’s about selective allocations of resources that can affect rather than protect the economies from the impacts of Covid-19.
When analysing the resources given by the Fund to its member countries, the discourse clashes with reality, analysts point out.
The IMF claims that it will help the most vulnerable and it was reported that the IMF distributed around $650 billion between its 190 member countries. Such financial influx is desperately needed especially during this pandemic, with a significant collapse of the world economy.
However, when it came down to sharing, the winners turned out to be the big powers that already have enough resources to get out of this health problem.
The IMF welcomed that the Special Drawing Rights (SDR) came into force. These initials can be translated into an exchange rate equivalent to $1.42, or the aforementioned $650 billion.
Their argument is that the allocation will benefit all the members to address the long-term need for reserves, build confidence and foster the resilience and stability of global economy.
Specifically, it will help the most vulnerable countries that struggle to cope with the impact of the health crisis, at least so it appears in the delivery documents. The overall allocation of SDR was made to the members of the body taking part in the Special Drawing Rights Department (currently all 190 members) in proportion to their existing quota in the Fund, and this is where the key is.
In this sense, the possible good news was overshadowed when governments checked the real situation.
Niger, African nation ranking last in the world in terms of the human development index, obtained $179 million, whereas Norway, located on the first step of the indicator, received $5.110 billion.
The members of the Group of 7 (G-7, wealthiest countries) got 43.3% of the IMF’s share (they received $282 billion from the $650 billion, 22 times Niger’s Gross National Product (GNP)).
The largest share went to the United States, with around $113 billion, equivalent to almost 18% of the total and 40% of what was assigned to G-7. (PL)