Climate Home News quotes Eric LeCompte on the impact of a $650 billion IMF SDR allocation on low- and middle-income, climate-vulnerable countries. Read an excerpt below, and click here for the full story.
Rare IMF relief offers a hope of green recovery to debt-laden nations
By Chloé Farand
As the International Monetary Fund is poised to inject $650 billion into the global economy, indebted low and middle-income countries are exploring ways to leverage the relief into green investments. In recent months, the plea of vulnerable nations for financial support has risen to the top of the international agenda. Revenues from the commodity trade and tourism collapsed in 2020, leaving many nations struggling to meet their basic needs, let alone invest in sustainable development. Cash-strapped governments in Africa, Latin America and the Caribbean do not have the luxury of borrowing cheaply to finance a green recovery from the coronavirus pandemic.
More than half of developing countries are estimated to be in debt distress, with interest payments accounting for at least a quarter of governments’ tax revenues in 2020 and raising to 40% in some countries, according to Jubilee USA Network. “The most consequential climate decision made in the next few months to five years will be made by the IMF, the G7, the G20 and the US Treasury as part of global pandemic response policies,” Eric LeCompte, executive director of Jubilee USA Network, told Climate Home News.
A debt repayment suspension initiative by the G20 has brought some relief but excludes middle-income countries, such as small island states, that have been hit hard by the pandemic and climate impacts.
Read the full story here.