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G20 pledged $850B for IMF in London |
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Thursday, 30 July 2009 |
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DECLARATION ON DELIVERING RESOURCES THROUGH THE
INTERNATIONAL FINANCIAL INSTITUTIONS LONDON, 2 APRIL 2009
We, the leaders of the Group of Twenty, are committed to ensuring that
capital continues to flow to emerging market and developing countries to
protect their economies and support world growth. To this end, we have
agreed to increase very substantially the resources available through the
international financial institutions and to ensure that the institutions
have the facilities needed to address the crisis in a coordinated and
comprehensive manner.
We have agreed to make available an additional $850 billion of resources
through the IMF and the multilateral development banks to support growth in
emerging market and developing countries by helping to finance
counter-cyclical spending, bank recapitalisation, infrastructure, trade
finance, balance of payments support, debt rollover, and social support.
For the IMF, we have agreed to support:
as an immediate measure, bilateral financing from members of $250 billion;
in the near term, incorporate the immediate financing from members into an
expanded and more flexible New Arrangements to Borrow, which will include
other G20 countries, and be increased by up to $500 billion. We aim to make
substantial progress by the Spring meetings;
consideration of market borrowing by the IMF to be used if necessary in
conjunction with other sources of financing, to raise resources to the level
needed to meet demands; and,
a doubling of the IMF¹s concessional lending capacity for low income
countries and a doubling of access limits, within the Debt Sustainability
Framework (DSF). We have committed, consistent with the new income
model, that additional resources from agreed sales of IMF gold will be used,
together with surplus income, to provide $6 billion additional concessional
and flexible finance for the poorest countries over the next two to three
years.
We call on the IMF to come forward with concrete proposals at the Spring
Meetings.
In addition to these steps, we have also agreed to support a general
allocation of SDRs equivalent to $250 billion to increase global
liquidity, $100 billion of
which will go directly to emerging market and developing countries. We
agreed to ratify
urgently the fourth amendment to the IMF¹s articles.
We agreed to accelerate the next quota review to be completed by January
2011 to ensure the IMF¹s finances are on a sustainable footing
commensurate with the
needs of the international monetary system.
For the Multilateral Development Banks (MDBs), we have agreed to support:
a substantial increase in lending of $100 billion including to low income
countries, to a total of around $300 billion over the next three years;
full and exceptional use of MDB balance sheets, to create further capacity
for lending to meet crisis needs;
a 200 per cent general capital increase at the Asian Development Bank and
reviews of the need for capital increases at the Inter-American Development
Bank, the African Development Bank and the European Bank for
Reconstruction and Development;
actions by the MDBs to leverage private capital more effectively,
including through the use of guarantees, bond insurance and bridging
finance; and
the new IFC Global Trade Liquidity Pool which should provide up to $50
billion of trade liquidity support over the next three years, with
significant co- financing from the private sector (as part of the global
effort to ensure
the availability of at least $250 billion of trade finance over the next two
years). In order to reach this objective, we agreed to provide $3-4
billion in
voluntary bilateral contributions to the IFC Pool. We also welcomed the
steps taken by
other MDBs to increase support for trade finance, and medium and long-term
project finance through our export credit and investment agencies.
We have also agreed to ensure that the international financial institutions
have the facilities they need to address the current crisis and meet the
needs of
emerging markets and developing countries. To this end:
we welcome the IMF¹s new Flexible Credit Line (FCL), for eligible
countries, as part of its reformed and more flexible lending and
conditionality
framework. This will help to address stigma concerns while safeguarding IMF
resources. We look forward to rapid take-up of the FCL and support Mexico¹s
decision to seek an FCL arrangement;
the IMF should take steps to ensure that its surveillance and lending
facilities address effectively the underlying causes of countries¹
balance of payments
financing needs, particularly the withdrawal of external capital flows to
the banking and corporate sectors;
we will support, through voluntary bilateral contributions, the World Bank
Vulnerability Framework, including the Infrastructure Crisis Facility and
the Rapid Social Response Fund;
individual country limits on World Bank lending should be increased, as
appropriate, to enable large countries to access required levels of finance
and so support stability and recovery in their regions;
low income IDA countries with sustainable debt positions and sound
policies should be given temporary access to non-concessional IBRD
lending to
compensate for the loss of access to capital markets, and IDA resources
should be frontloaded, using the existing flexibility in the DSF.
We agreed that these resources and facilities should enhance the capacity of
the international financial institutions to address the crisis.
Cooperation and
coordination between the IFIs should be strengthened to increase their
effectiveness.
Emerging and developing economies, including the poorest, should have
greater voice and
representation.
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