U.S. Treasury Secretary Janet Yellen announced on Friday that she will be working at the G20 summit in India to garner support for increasing lending resources for the International Monetary Fund (IMF) and the World Bank. The aim is to assist member countries in dealing with various global challenges, including the establishment of new IMF quota resources.
During a news conference in New Delhi, Yellen stated that she will be seeking G20 support for an “equi-proportional” increase in IMF quota funds paid by member countries. This increase would enhance IMF lending resources without immediately altering its shareholding structure.
On the previous day, Treasury Under Secretary Jay Shambaugh mentioned in Washington that an IMF quota increase, while keeping voting power unchanged, would provide financial relief to countries experiencing economic stress. Meanwhile, more time could be allotted to determine a new shareholding formula that gives greater representation to dynamic emerging market economies like India, China, and Brazil.
Yellen further revealed that the United States has requested permission from the U.S. Congress to lend $21 billion to IMF trust funds, including one for the world’s poorest countries, which are in dire need of additional resources.
Yellen commended the progress made by the World Bank and other multilateral development banks over the past year in expanding lending resources and addressing global crises such as climate change and pandemics. She mentioned that near-term balance sheet changes being considered could unlock an additional $200 billion over the next decade. Furthermore, medium-term steps recommended by a G20 capital adequacy review, such as the utilization of callable capital, could contribute to additional resources for lending.
Yellen stressed the importance of debt relief for poorer countries, a topic she consistently emphasizes at international meetings, especially those attended by major bilateral lender China. She expressed support for efforts to provide predictable and timely debt relief through initiatives like the G20’s Common Framework for Debt Treatment, acknowledging that progress in this area has been slow.
In addition, Yellen stated that she will work towards strengthening international support for Ukraine at the G20 summit. She believes it is critical to continue providing economic assistance to Ukraine, including through the IMF’s $15.5 billion loan program and the European Union’s proposed 50 billion-euro support package.
Yellen concluded by calling for support for the G20’s Global Agriculture and Food Security program and the UN’s International Fund for Agricultural Development in response to Russia’s withdrawal from a Black Sea grain deal, which has led to food insecurity.
Overall, Yellen’s focus at the G20 summit includes increasing lending resources for the IMF and the World Bank, advocating for debt relief for poorer countries, supporting Ukraine, and addressing food insecurity issues.