ICC Secretary General John W.H. Denton AO has issued a statement following news that the G7 will back proposals to provide financial support to help poorer nations recovery from pandemic impact.
“I am delighted to see G7 finance ministers heed the longstanding call from global business and workers in committing today to make new financial support available to emerging economies. Fresh liquidity is urgently needed to ensure all governments have the necessary resources to get the spread of Covid-19 under control – as well as providing direct financial support to hard-pressed businesses and families. Kudos to the British Chancellor, Rishi Sunak, for spearheading this important breakthrough.
It is vital that this now translates to an allocation of new IMF Special Drawing Rights commensurate with the scale of the challenges facing the real economy in many emerging markets. To take just one example: surveys of our network last year consistently showed that over 50% of SMEs in developing countries feared bankruptcy in 2021 absent of fresh financial support. Data such as this should be the basis for calculating a new global stimulus plan – not theoretical reserve or liquidity needs.
A US$1 trillion allocation of SDRs – coupled with any measures to allow advanced economies to transfer their holding to countries in need – is the very least that world business expects from G20 finance ministers at their virtual meeting next month. Staying at home to stop the spread shouldn’t be an excuse for not going big on the stimulus that the real economy so urgently needs.”