WASHINGTON – Finance officials of the world’s major economies on Wednesday agreed on a proposal to boost the resources of the International Monetary Fund by $650 billion as a way to provide more support to vulnerable countries struggling to deal with a global pandemic.
The Group of 20 major industrial countries issued a joint statement that also announced the approval of a final six-month moratorium on debt payments by 73 of the world’s poorest countries.
The proposal to increase the IMF's resources received a boost earlier this year when it got the backing of the Biden administration. The resources are known as IMF Special Drawing Rights and create an asset that countries can use to bolster their own reserves.
The proposal still needs approval from the IMF’s board and then contributions from member countries.
The debt-payment deal extends the moratorium begun last year until the end of this year. But international aid groups expressed unhappiness that the G-20 is saying the extension will be the final one to be offered.
“We’ve seen progress on debt relief and aid, but we still need to solve multiple challenges so countries can get through this crisis,” said Eric LeCompte, executive director of Jubilee USA Network. “It is unlikely that the breathing space indebted countries get with this extension will be enough.”
The G-20 group also lent support to a Biden administration drive to establish a global minimum tax rate for corporations, saying it hoped to achieve a consensus in the group by the middle of this year.
U.S. Treasury Secretary Janet Yellen had urged countries to adopt a minimum corporate tax in a speech on Monday, saying it was needed to stop a “30-year race to the bottom” in which countries had slashed corporate tax rates to attract multi-national businesses.