The new Chair of the International Monetary and Financial Committee (IMFC) issued a statement recognizing that Russia’s war against Ukraine has massive humanitarian consequences and detrimental repercussions for the global economy in Washington, DC on Thursday.
The IMFC called for a speedy resolution through diplomatic channels, including “political dialogue, negotiations, mediation and other peaceful means.”
“The statement shows that there has been a constructive and intense dialog at the IMFC as there is an agreement on all elements related to the important work of the institutions. All IMFC members welcome the Managing Director’s Global Policy Agenda. There was not only consensus on the work of the institution, but also on the critical policies that members will need to take, and I should add that there was a very close engagement and dialog amongst all countries on the substantive work of the institution and its policies. If there has been a time for multilateralism, it is now. And against this truly challenging background, we need the international community to come together, stand strong, and demonstrate our full commitment to cooperation,” said Nadia Calviño in a virtual press briefing co-chaired by IMF’s Managing Director Kristalina Georgieva held in Washington, DC.
A new IMF tool created to service members needing longer maturity for longer term transformation, in particular climate change and pandemics, received significant financial backing. Twelve countries stepped forward to support the Resilience and Sustainability Trust (RST). Now the RST has about $40 billion in commitments which can be credibly moved towards the implementation of the trust’s goals.
“We do face a war in Europe. It is creating all the impacts, including making it possible to have a communique with everybody signing in on it. But the overwhelming majority of the membership sees this crisis as proof that we have to cooperate, compare notes on policies, find ways in which we can act in solidarity and this is why I find it remarkable that we got nearly around $40 billion in commitments the first time we openly ask for support for Resilience and sustainability trust because it is walking this talk, it is a demonstration that we need each other,” said Georgieva.
Georgieva announced yesterday (Wednesday, April 20) in her press briefing on the Global Policy Agenda that the IMF has been engaged very closely with the Ukrainian Ministry of Finance on the estimates they have provided of what would be necessary to retain the functioning of the Ukrainian economy over the next three months. The Ukrainian financial authorities came up with the number of $5 billion a month.
“Five billion is the estimate of Ministry of Finance and more broadly the financial authorities of Ukraine for what is their monthly financial gap for the next couple of months. Our staff has worked on verifying, ascertaining, whether this amount broadly is the right, the right order of magnitude, and they confirm that indeed for the observable future, for the next couple of months, this is an amount that would be necessary to provide for Ukraine’s performing its functions in terms of paying salaries, pensions, paying for social services, for the displaced population and of course, the costs that are coming up on top of the normal payments related to the war,” said Georgieva.
The IMF provided Ukraine with $1.4 billion in emergency financing that is now in the Special Drawing Rights account of Ukraine. The IMF also is starting preliminary discussions for a full-fledged program for Ukraine once the conditions in the country allow it.
Calviño concluded her remarks by emphasizing the role of the IMF in reinforcing existing instruments for financial support to middle-income and vulnerable countries.
“I would like to emphasize that there was a unanimous call on the International Monetary Fund to press ahead and to reinforce existing instruments for financial support in particular to most vulnerable countries. Not only also middle-income countries are going to be accessing some of the newly created instruments. And there was also a unanimous commitment to reinforce the common framework to making it operational and to try to have a clear concrete calendar, clear deliverables, thanks to the strong engagement of some key players,” said Calviño.
