Durbin, Colleagues Introduce Legislation To Support Global Financial Institutions Amid COVID-19 Pandemic
WASHINGTON – U.S. Senate Democratic Whip Dick Durbin (D-IL), along with Senators Bernie Sanders (I-VT), Jack Reed (D-RI), Ben Cardin (D-MD), and Jeff Merkley (D-OR), today introduced the Support for Global Financial Institution Pandemic Response Act. The legislation directs representatives from the United States to multilateral development banks, such as the World Bank and International Monetary Fund (IMF), to help developing countries as they fight COVID-19, ensuring financial support for a robust international response to the global public health pandemic.
The global COVID-19 pandemic is expected to severely impact the economies and wellbeing of developing countries. The IMF expects at least 170 nations – rich and poor – to experience economic decline this year, and experts predict recessions, and spiking poverty, hunger, and joblessness across the globe. The situation facing dozens of poorer countries is all the more dire as they don’t have the same capacity to borrow money at low rates or print their own. And now, many countries face the prospect of defaulting on debts as their economies stall.
The Support for Global Financial Institution Pandemic Response Act urges the Treasury Department to use its vote at the IMF to free up considerably more Special Drawing Rights (SDR) for member nations. Special Drawing Rights are supplementary foreign exchange reserve assets defined and maintained by the International Monetary Fund. An increased SDR allocation is a low cost, strategic way for the international community to extend a financial umbrella to poorer nations.
“To date, the world has lost more than 500,000 people worldwide to COVID-19 and brought global economies to a halt. Mitigating the impacts of this global public health and economic emergency will require a robust and coordinated international response,” Durbin said. “Bold initiatives, such as the Support for Global Financial Institution Pandemic Response Act, helps ensure that developing countries can access the financial assistance they need in order to weather the storm of this pandemic.”
“What this crisis shows us is that we have got to act as a global community—we truly are all in this together. That means protecting the most vulnerable amongst us,” said Sanders. “In the face of a horrific pandemic and a worldwide recession, we cannot allow poor countries to forego the health and economic wellbeing of their people as they try to pay off unsustainable debts. We cannot allow these countries to be deprived of the resources they need to purchase food, medicine, protective gear, and medical equipment. I am proud to join Senator Durbin in advancing this legislation to have the IMF provide robust financial support to the developing world at no cost to American taxpayers. This is the very least we can do to prevent an unimaginable increase in poverty, hunger, and disease that threatens hundreds of millions of people.”
“This virus knows no boundaries and neither does its economic consequences. If the U.S. doesn’t lead a coordinated international response through the IMF and other aid efforts, we’re going to see more destruction and more instability and neither of those is the kind of news we need right now,” said Reed.
Last month, Durbin, Sanders, and more than 300 lawmakers worldwide urged the IMF and World Bank to cancel the debt of the poorest countries in response to the coronavirus pandemic, and to boost funding to avert a global economic meltdown.
U.S. Representatives Jesús “Chuy” García (D-IL-04), Jan Schakowsky (D-IL-09), and Mark Takano (D-CA-41) introduced companion legislation in the House earlier this year.
Bill text is available here.
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