MercoPress. South Atlantic News Agency

US bishops call on Biden to sponsor a boost of IMF resources to support poor countries

“The US government is vital to ensuring the world emerges from this pandemic with greater resilience,” the groups wrote

The United States Conference of Catholic Bishops and an alliance of faith groups urged President Joe Biden on Tuesday to back a big boost in the International Monetary Fund's (IMF) emergency reserve funds to help poor countries devastated by the coronavirus pandemic.

In a letter to Mr Biden, the governing body of the church said the United States should take urgent action to help the poorest countries on humanitarian grounds, but also to shore up its own economic interests and bolster trade with the developing world.

“The US government is vital to ensuring the world emerges from this pandemic with greater resilience,” the groups wrote, citing a World Bank estimate that the pandemic would push as many as 150 million people into extreme poverty this year.

Mr Biden is only the second Roman Catholic to be elected USpresident, but his support for reproductive rights has led to strained ties with the conservative conference of bishops.

In the letter, the bishops and Jubilee USA Network said the Biden administration should “lead the world” in a new issuance of the IMF's own currency, or Special Drawing Rights, just as it did during the global financial crisis of 2008-2009.

The Biden administration has not said whether it will reverse the Trump administration's position blocking a new issuance. US support is critical for any boost in reserves since it is the IMF's largest shareholder.

Italy, current head of the G-20 major economies, says it is renewing its push for a US$500 billion issuance - a move akin to a central bank printing money.

The bishops and Jubilee said they welcomed emerging consensus around US$500 billion in new SDRs, but a bigger package was needed to address the huge financial needs triggered by the pandemic and years of escalating debts in poor countries. They urged Biden to work with Congress and the IMF to issue SDRs worth US$3 trillion, of which US$1 trillion would be available to developing countries.