Office Director, Bureau of International Organization Affairs
U.S. Department of State
April 14, 2021
Thank you, Mr. Mazarei and panelists, for today’s interesting discussion.
The United States believes the Debt Service Suspension Initiative has and continues to provide emergency liquidity relief, but a more structural and tailored approach will be necessary for countries that need additional assistance, including possible debt reduction.
In response, the G20 and Paris Club have developed and endorsed a Common Framework for Debt Treatments beyond the DSSI. The Common Framework will allow low-income countries to benefit from a more efficient, transparent, and responsive approach to seeking debt treatment.
The United States also supports exploring a $650 billion Special Drawing Rights allocation to give a much-needed boost to global reserves including low-income countries.
It will be critical that any such allocation come alongside efforts to enhance transparency and accountability around SDRs, which will give the public insight into how authorities use SDRs and help to ensure they are used to restore economic stability.
IMF members should also work in parallel to explore ways for major economies to channel SDRs to amplify support for low-income countries, for example by lending SDRs to the IMF’s Poverty Reduction and Growth Trust.
We need to help lessen the economic pain in low-income countries during a protracted recovery period and use this opportunity – as we are doing in the United States – to facilitate structural transformations to more inclusive and sustainable economies.
Embedded in recovery efforts, we have an interest in pursuing sustainable and inclusive growth and strengthened long-term resilience. Our response will not be successful if we end up just where we were before.