Channeling Special Drawing Rights through MDBs: how to make it (finally) work

Event Type
Online Roundtable

Location / Date
Online, 24.09.2024

IDOS (Germany), ACET (Ghana), The BRICS Policy Center (Brazil), IDDRI (France), and SIIS (China)

As part of the series of events connected to the OECD’s Multilateral Development Finance week, a consortium of five think tanks, IDOS (Germany), ACET (Ghana), the BRICS Policy Center (Brazil), IDDRI (France), and SIIS (China), organized an online roundtable on “Channeling Special Drawing Rights through MDBs: how to make it (finally) work”.
 
In light of the G20's pledge to channel USD 100 billion of the IMF's recent allocation of Special Drawing Rights (SDRs) in 2021 to low-income and vulnerable countries, there is a growing call for more effective utilization of these SDRs through multilateral development banks (MDBs). The African Development Bank (AfDB) and the Inter-American Development Bank (IDB) have put forth a proposal for a mechanism structured as a hybrid capital instrument, complemented by a liquidity support agreement (LSA). This approach would treat the SDRs as equity on MDBs' balance sheets, thereby enabling MDBs to mobilize three to four times the value of the SDRs lent. Moreover, the IMF board has approved the use of SDRs to acquire hybrid capital issued by MDBs, subject to certain conditions. Nevertheless, the level of participation in the LSA remains relatively low, and the legal restrictions in the Eurozone significantly reduce the pool of potential contributors.
 
The online roundtable discussed the potential of this mechanism to enhance the financial capabilities of MDBs. Most importantly, it addressed the remaining technical and political challenges that impede the realization of the full potential of channeling SDRs through MDBs, as well as potential solutions to remove these challenges.

Agenda

15:00 – 15:10 Opening remarks

• Pilar Garrido, Director, Development Co-operation Directorate, OECD  

15:10 – 15:20 Setting the Stage: Presentation of the forthcoming IDOS Policy Brief „Channeling Special Drawing Rights through MDBs: Overcoming Remaining Obstacles”

• Yabibal Walle, German Institute of Development and Sustainability (IDOS)

15:20 – 16:25 Panel Discussion: “Channeling Special Drawing Rights through MDBs”
Moderator: Serah Makka, Africa Executive Director for the ONE Campaign 

15:20 – 15:45 Interventions by each of the panelists

• Ms Andrea Rieck, Head of Division IMF, International Financial Architecture, German Federal Ministry of Finance
• Mr William Roos, Assistant Secretary for Multilateral, Development and Trade Affairs, French Treasury
• Ms Hassatou Diop N'Sele, Vice President for and Chief Financial Officer (CFO), African Development Bank Group 
• Mr. Paulo Esteves, General Coordinator of the BRICS Policy Center, Brazil
• Mr. Rob Floyd, Director, Innovation and Digital Policy, African Centre for Economic Transformation, Ghana

15:45 – 16:05 Questions by the moderator to the panelists

16:05 – 16:25 Q&A based on questions/comments from participants

16:25 – 16:30 Concluding Remarks 
 

Hinweis

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