At the 2022 International Monetary Fund (IMF) - World Bank Group Annual Meetings, IMF Managing Director, Kristalina Georgieva, discussed the Resilience and Sustainability Trust (RST)—a promising initiative by the IMF aimed at addressing the vulnerability of poorer countries to the ever-growing uncertainties of the world.
IMF’s RESILIENCE AND SUSTAINABILITY TRUST
The IMF’s RST helps low-income and vulnerable middle-income countries build resilience to external shocks and ensure sustainable growth by providing longer-term, affordable financing to address longer-term challenges, including climate change and pandemic preparedness. It aims to secure funds from advanced economies and provide help where it is most needed, leading to stability in terms of a longer-term balance of payments among the poorer nations. It also complements the IMF’s existing lending toolkits, including the General Resources Account (GRA), which is a pool of funds from members’ paid capital, and the Poverty Reduction and Growth Trust (PRGT), which is known as the main vehicle for providing concessional loans to low-income countries.
COOPERATION FOR RESILIENCE
The RST will help maintain longer-term economic and financial stability while catalyzing other public and private financing. The IMF previously promised to get this program running by the 2022 IMF - World Bank Annual Meetings, which it has successfully done so, with the trust beginning operations at the beginning of October. In the first round of funding, Australia, Canada, China, Germany, Japan, and Spain, collectively contributed a total of 20 billion USD, and seven more countries have pledged to contribute to this fund by 2023, with many more in discussion. So far, three countries have enrolled as borrowers, including Barbados, Costa Rica, and Rwanda, and they are set to discuss their initial requests with the Executive Board in the coming months. As around three-quarters of the IMF’s membership comprises low and middle-income countries, the IMF aims to involve as many of them as possible in this program.
This trust illustrates an example of a fruitful collaboration among many parties and an optimistic reminder that when nations are willing to work together, there is hope for a better and more resilient future.
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