The International Monetary Fund (IMF) has announced plans to allocate $650 billion worth of reserve funds to support a global economic recovery from COVID-19. Distributed in the form of reserve assets called Special Drawing Rights (SDRs), this financing source could help countries purchase COVID-19 vaccines, invest in an equitable economic recovery, and access lifesaving health care treatments.

The problem is that the current process of distributing SDRs benefits wealthy nations the most, making it possible for low- and lower middle-income countries to slide further into poverty if funds are not distributed equitably.

To correct this inequity, world leaders and humanitarians have called on governments to donate dollars and doses to help the world’s poorest countries combat the pandemic, including by funding COVAX — the vaccine pillar of the ACT-Accelerator — and supporting the temporary suspension of COVID-19 vaccine intellectual property rights to unleash global vaccine production. SDRs will be another crucial lifeline to ensure equitable access.

Through the IMF’s process of allocating SDR holdings, G20 nations, which already have ample financial resources and borrowing space to support their economic recoveries, will receive 68% of the new SDRs, or $442.8 billion.

That’s why G20 finance ministers should commit to collectively on-lend at least half of their new SDR allocation to support the economic recovery in low- and lower middle-income countries this year.

To ensure these allocations are distributed effectively and equitably, Global Citizen has compiled a list of criteria that nations should follow when directing their SDR holdings.

Here are five key principles for effective SDR reallocation.

  1. Prioritize the global fight against COVID-19.
  2. Support an inclusive and green recovery.
  3. Distribute SDR holdings in an efficient and timely manner.
  4. Ensure that SDR on-lending mechanisms are concessional and in addition to existing aid commitments.
  5.  Include lower middle-income countries when considering SDR reallocations.

Read the full article about financing for equitable COVID-19 recovery by Jaxx Artz at Global Citizen.