The bloc called for increased channeling of Special Drawing Rights (SDR) from donor countries to needy countries
The G-24 on Tuesday called for a variety of steps to increase the financing available to developing countries of the world amid tight external financing conditions, inflationary pressures, and high debt levels.
The international group of 24 nations, whose finance ministers and central bank governors met in Washington on Tuesday, noted that the global economic landscape has improved but remains uncertain, with many countries affected by declining access to finance.
The IMF had earlier on Tuesday said global headline inflation is expected to fall from an annual average of 6.8 per cent in 2023 to 5.9 per cent in 2024 and 4.5 per cent in 2025, with advanced economies returning to their inflation targets sooner than emerging market and developing economies.
In its intervention, the G-24 asked for reform of IMF short-term financing instruments; increased concessional financing to low-income countries; downward review of IMF’s charges and surcharges; and increased channeling of Special Drawing Rights (SDR) from donor countries to needy countries.
The SDR is an international reserve asset created by the IMF to supplement the official reserves of its member countries. Although the SDR is not a currency, its value is based on a basket of five currencies—the US dollar, the euro, the Chinese renminbi, the Japanese yen, and the British pound sterling.
The G-24 countries were of the view that their recommendations would provide additional financing for members to “mitigate shocks and invest in climate action and sustainable development.”
Reforms
G-24 members raised concerns about the equi-proportional increase of the IMF’s quota and reiterated their call for a quota realignment that would bolster the voice and representation of Emerging Market and Developing Economies (EMDEs).
Amplifying their voices in terms of representation, they lent their support to the call for the appointment of a fifth Deputy Managing Director at the IMF to represent EMDEs, who now account for a larger share of the world economy.
While welcoming the World Bank reform programme, members noted that they look forward to a bigger, better, and more efficient bank while calling for more concessional lending, especially for global public goods, and for a just energy transition.
Members also look forward to an increased representation and voice of developing countries during the forthcoming 2025 shareholder review of the World Bank.
Last December, the Institute of International Finance said global debt had already hit a record $307 trillion in 2023.
G-24 members, on their part, expressed concern about high and increasing public debt levels, with many developing countries carrying unsustainable debt burdens. Although members welcome progress on the G-20 Common Framework, they called for the design of “a comprehensive and responsible approach that has concrete impactful measures to support countries in reducing high debt levels and debt service costs.”
Members also welcomed the United Nations Secretary- General’s Inclusive and Effective Tax Reform agenda and called for a multilateral consensus to drive enduring progress on the initiative as it would foster a more just and balanced international tax system.
On global trade, members called on the Bretton Woods Institutions to lend their support to reforms of the multilateral trade system because the rising trend in protectionist policies, especially from the largest economies, has had adverse repercussions on multilateralism and economic growth.
